Free Order on Motion for Leave to File - District Court of Arizona - Arizona

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

) ) ) ) Plaintiff, ) ) vs. ) ) Peter Thimmesch and Cynthia ) Thimmesch, husband and wife; ) Michael O'Donnell and Marsha ) O'Donnell, husband and wife; ) et al., ) ) Defendants. ) ___________________________________)

Biltmore Associates, as Trustee for the Visitalk Creditors' Trust,

CV-02-2405-PHX (HRH)

O R D E R Motion to Amend Plaintiff moves for leave to file a second amended complaint expanding its claims against defendant Snell & Wilmer.1 The motion is opposed. Oral argument has not been requested and is not deemed necessary. As provided in Rule 15(a), Federal Rules of Civil

Procedure, leave to amend is to be "freely given when justice so requires." Factors which may cause a court to refuse leave to

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amend were long ago identified by the United States Supreme Court in Foman v. Davis, 371 U.S. 178 (1962). Absent such considerations as undue delay, undue prejudice to the opposing party, or futility, "the leave sought should, as the rules require, be 'freely given.'" Id. at 182 (quoting Rule 15(a)). Snell & Wilmer contends that the foregoing factors all mitigate against a second amendment in this case. not see it that way. Undue Delay This case was initiated in 2002. complaints defendants. assert a multiplicity of claims Plaintiff's prior against multiple The court does

The case is an extremely complex one.

Complex cases

are often slow to develop; and the bases for the refinement and/or expansion of pleadings not infrequently fail to become manifest until substantial discovery has been undertaken. That has occurred here. While it is true that hints of the circumstances upon which

plaintiff now relies began developing some months before the motion to amend was filed, it was certainly not unreasonable (especially in light of Rule 11 considerations) for plaintiff to undertake further inquiries before proceeding with the motion to amend. Plaintiff did not unduly delay bringing the motion to amend. Undue Prejudice Snell & Wilmer's arguments under this heading are

completely unpersuasive.

The probability that this amendment will

generate some further discovery on both sides does not qualify as prejudice to anyone. It is true that the proposed second amended - 2 -

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complaint injects a new set of issues into the case; but, contrary to what Snell & Wilmer implies, there is no dramatic expansion of this case. Snell & Wilmer has not shown that its ability to defend

against the new claim which plaintiff would assert has in any way been compromised because the claim would be asserted now rather than when plaintiff became aware of the first hints that there might have been something other than a pure attorney-client

relationship between Snell & Wilmer and Visitalk. Futility The bulk of Snell & Wilmer's discussion appears directed at the question of whether or not an amendment would in this instance be futile. Snell & Wilmer wrongly suggests that

plaintiff's second amended complaint contains no allegation of insider conduct. states: Plaintiff's proposed Count XXVII, paragraph 325,

"[t]he transfers were made within one year prior to the

date of the filing of the petition and [Snell & Wilmer] was an insider on the date of such transfers."2 Now is not the time for the court to parse the technical sufficiency of plaintiff's proposed Count XXVII, nor is it the time for the court to evaluate the merits of that claim. "'[A] proposed amendment is futile only if no set of facts can be proved under the amendment to the pleadings that would constitute a valid and sufficient claim or defense.'" Sweaney v. Ada County, Idaho,

119 F.3d 1385, 1393 (9th Cir. 1997), (quoting Miller v. RykoffProposed Second Amended Complaint at 52, Ex. 1, Motion for Leave to File Second Amended Complaint, Clerk's Docket No. 276. - 3 2

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Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988).

The deposition

testimony that plaintiff has put before the court clearly suggests that a Snell & Wilmer attorney had something more than an attorneyclient relationship with Visitalk. Whether the evidence is

sufficient to constitute Snell & Wilmer an insider under applicable bankruptcy law is a question for another day. In light of what is

before the court, it cannot be said that plaintiff's pursuit of Snell & Wilmer for preference payments is futile. The motion for leave to file a second amended complaint3 is granted. The proposed second amended complaint shall be filed.

DATED at Anchorage, Alaska, this 28th day of November, 2005.

/s/ H. Russel Holland United States District Judge

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