eNotes: Liability – January 2023 – Federal

SIGNIFICANT CASE SUMMARIES

Federal Case Summary

Moravia Motorcycle, Inc. v. Allstate Ins. Co.
U.S. District Court for the Western District of Pennsylvania
No. 21-1274

Decided: October 19, 2022

Plaintiffs’ Motion for leave to amend Complaint and join additional party denied where Motion was filed beyond deadline and where Plaintiffs knew or should have known of the issue that prompted their request for leave to amend prior to the deadline.

Background

Plaintiffs filed suit in state court against Allstate to obtain insurance benefits for damage to their motor home. Allstate removed the case to federal court. Eight days after a failed mediation, and twenty-four days after the deadline set forth in the Case Management Order, Plaintiffs sought leave to file a Second Amended Complaint to assert two additional claims against Allstate, and to join the insurance agent who sold them the policy. Plaintiffs intended to assert claims against the agent for misrepresenting that the policy afforded $200,000 in coverage when, in fact, the policy limit was actually $20,000. Attached to the Original Complaint filed in state court was a copy of the policy declarations showing the $20,000 policy limit. The parties’ Rule 26(f) Report also set forth $20,000 as the amount of coverage provided by the policy.

Holding

In denying Plaintiffs’ Motion, the District Court first found that Plaintiffs did not satisfy the “good cause” standard of Rule 16(b)(4) applicable to their request to amend because they possessed a copy of the Declarations prior to the filing of their Complaint. The Court found that Plaintiffs had not shown that failure to properly review a jointly filed document excuses a party from notice and knowledge of its contents. The Court then found that Plaintiffs had failed to satisfy the requirements of Rule (20)(a)(2)(A) and (B) because they had not shown that their claims against the insurance agent arose out of the same transaction or occurrence as the claims against Allstate. Next, applying the four-factor test set forth in Hensgens v. Deere & Co., 833 F.2d 1179 (5th Cir. 1987), the Court found that though Plaintiffs were not attempting to defeat federal jurisdiction by joining a non-diverse party, their request to join the insurance agent would be denied because Plaintiffs had been dilatory in making the request and failed to show that they would be significantly injured if the insurance agent were not joined as a party. The Court also found that consideration of the equitable factors weighed in favor of a denial of the request because allowing the amendment would be prejudicial to Allstate, who had been litigating the matter in the federal court for over a year.