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Quarterdeck Condominium Association of Apartment Owners v. Safeco Insurance

United States District Court, W.D. Washington, Seattle

July 25, 2018

QUARTERDECK CONDOMINIUM ASSOCIATION OF APARTMENT OWNERS, Plaintiff,
v.
SAFECO INSURANCE, et al., Defendants.

          ORDER

          JOHN C. COUGHENOUR, UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court on Defendant Commonwealth Insurance Company of America's (“Commonwealth”) motion for leave to file an amended answer (Dkt. No. 31). Having thoroughly considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary and hereby DENIES the motion for the reasons explained herein.

         I. BACKGROUND

         Plaintiff Quarterdeck Condominium Association of Apartment Owners (“Quarterdeck”) is a non-profit corporation that maintains the Quarterdeck Condominium Complex in Seattle. (Dkt. No. 1 at 2.) On June 30, 2017, Quarterdeck filed suit against ten insurance companies, seeking a declaratory judgment that the insurers' policies covered water damage that had allegedly occurred at the complex at some point during the past 20 years. (See generally id.)

         Quarterdeck did not issue a summons on four of the ten insurers, none of whom appeared in the lawsuit.[1] (Dkt. Nos. 2, 35 at 2.) Five of the six remaining Defendants were voluntarily dismissed from the lawsuit without prejudice.[2] (See Dkt. Nos. 14, 17, 24, 26, 29.) Only Commonwealth remains.

         Commonwealth appeared in this case on July 17, 2017. (Dkt. No. 5). On October 24, 2017, Commonwealth filed its answer, in which it asserted certain affirmative defenses (see generally Dkt. No. 20.) On November 7, 2017, the Court issued its scheduling order pursuant to Federal Rule of Civil Procedure 16 (Dkt. No. 22). The Court set March 2, 2018 as the deadline for filing pleading amendments or asserting third party claims. (Id.)

         On July 5, 2018, Commonwealth requested leave to file an amended answer in order to assert third party contribution claims against the other nine insurance companies originally named in Quarterdeck's complaint. (Dkt. No. 31 at 1-2.)

         II. DISCUSSION

         A. Legal Standard

         Under Federal Rule of Civil Procedure 15(a), a district court should freely grant leave to amend a pleading “when justice so requires.” Fed.R.Civ.P. 15(a)(2). The Ninth Circuit has made clear that Rule 15 favors pleading amendments and should be applied liberally. See Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989). However, the Rule 15 standard does not apply when a party seeks to amend its pleading after the court-ordered deadline for filing amendments has passed. Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607 (9th Cir. 1992).

         Instead, untimely motions to amend are analyzed under the “good cause” standard established by Rule 16. See Fed. R. Civ. P. 16(b)(4); Mammoth Recreations, Inc., 975 F.2d at 608. The Rule 16(b) good cause standard “primarily considers the diligence of the party seeking the amendment.” Mammoth Recreations, Inc., 975 F.2d at 609. A district court may amend its scheduling order “if it cannot reasonably be met despite the diligence of the party seeking the extension.” Id. If the moving party “was not diligent, the [good cause] inquiry should end.” Id.

         B. Commonwealth's Motion to Amend

         Commonwealth wishes to amend its answer to assert contribution claims against the nine insurers who are no longer part of the lawsuit. (Dkt. No. 31 at 3.) Commonwealth acknowledges that its motion to amend is untimely, but it asserts that there is good cause to allow the amendment. (Id. at 2.) Commonwealth appears to suggest that it could not have timely amended its answer because one of the co-defendant insurance companies was not voluntarily dismissed until nearly two months after the pleading amendment deadline had passed. (Id.) The Court disagrees.

         Commonwealth could have asserted its contribution claims against its co-defendants from the outset. The complaint put Commonwealth on notice that Quarterdeck was seeking a declaratory judgment against all of the named insurers for the alleged water damage. (See Dkt. No. 1.) In other words, Commonwealth knew all along that it could seek contribution from its co-defendants if a judgment was ultimately entered against it. As Commonwealth states in its motion “the proposed third party claims arise out of the same circumstances as alleged in the Association's original complaint.” (Dkt. No. 31 at 3.) ...


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