Weinreich v. Brooks

United States District Court

District of Massachusetts

)

Marc Weinreich, )

)

Plaintiff, )

)

v. ) Civil Action No.

) 21-10496-NMG

Cynthia Brooks, et al., )

)

Defendants. )

)

)

MEMORANDUM & ORDER

GORTON, J.

This is an action brought by Marc Weinreich (“plaintiff” or

“Weinreich”) against his former employer the Greenfield

Environmental Trust Group (“GETG” or “the company”) and the

founder, majority shareholder and president of GETG, Cynthia

Brooks (“Brooks”) (collectively with GETG, “defendants”).

Weinreich alleges that Brooks impermissibly stripped him of his

titles and responsibilities as a shareholder, officer and

director of GETG to force him out of the company. Pending

before the Court are two motions: (1) defendants’ joint motion

for partial judgment on the pleadings and (2) plaintiff’s motion

to amend the complaint.

I. Background

Weinreich alleges that he and Brooks together founded GETG

in 2000. Brooks owned 51 percent and Weinreich owned 49

percent. GETG serves as a court-designated environmental

response and custodial trustee to assist in cleaning

contaminated sites throughout the country. Weinreich claims

that he was responsible for overseeing most of the operational

and administrative duties of the company, while Brooks focused

on billing project management work.

In 2018, Brooks began a restructuring of GETG that became

final in July, 2019 (“the July Reorganization”). The July

Reorganization resulted in the removal of Weinreich as the Co-

Managing Principal of the most significant business project of

GETG and the transferal of many of his responsibilities to other

employees. Brooks explained that the restructuring came in

response to complaints of five employees that Weinreich had

created a hostile work environment. Shortly after the July

Reorganization, Brooks instructed Weinreich not to speak with

GETG employees or outside third parties and proceeded to remove

him from the company’s Board of Directors.

Weinreich protests that the July Reorganization was

intended to concentrate power and control of GETG in Brooks and

to force him out of the company. He claims that Brooks had

grown resentful that he did not work as many billable hours as

she did and that he had a partial equity stake in other

businesses in Utah. He also asserts that Brooks has withheld

information about the employee complaints and refused to

initiate an independent investigation of the allegations.

In September, 2019, Weinreich resigned as an officer of

GETG and, in November, 2019, filed a complaint against

defendants in Utah state court. In his original complaint,

Weinreich alleged: (1) shareholder oppression under Utah Code

Ann. § 16-10a-1902 against both defendants (Count I), (2) breach

of contract against the company (Count II), (3) breach of

fiduciary duty against Brooks (Count III) and (4) wrongful

discharge in violation of public policy against both defendants

(Count IV). He also asserted a breach of contract claim against

Greenfield Environmental Multistate Trust LLC (“GEMT”) but the

parties later stipulated to the dismissal of GEMT without

prejudice.

In December 2019, defendants timely removed the action to

the United States District Court for the District of Utah based

on diversity jurisdiction under 28 U.S.C. § 1332. The action

was then transferred to this Court in March, 2021 because the

Utah court concluded it did not have personal jurisdiction over

Brooks.

In April, 2021, defendants filed a joint answer in which

they denied many of the substantive allegations made in the

complaint and assert 17 affirmative defenses, including, but not

limited to: failure to state a claim, contributory negligence,

and the doctrines of unclean hands, estoppel, waiver and laches.

That same day, defendants filed a joint motion for judgment on

the pleadings on the first and fourth claims asserted in the

complaint.

In June, 2021, plaintiff opposed that motion and filed a

motion to amend the complaint, which defendants subsequently

opposed. Plaintiff’s motion to amend seeks to add 11 additional

claims under Massachusetts law and a new defendant. Discovery

in the case is ongoing.

II. Analysis

The Court will address plaintiff’s later-filed motion to

amend his complaint first because defendants’ pending motion for

judgment is contingent upon that pleading.

A party may amend his pleading by leave of the court, which

should be “freely give[n]...when justice so requires”. Fed. R.

Civ. P. 15(a)(1); Holbrook v. Boston Scientific Corp., No. 20-

10671, 2020 WL 5540544, at *1 (D. Mass. Sept. 16, 2020). Rule

15(a) gives courts broad discretion in deciding whether to allow

or deny leave to amend. U.S. ex rel. Ge v. Takeda Pharm. Co.,

737 F.3d 116, 127 (1st Cir. 2013). A court acts within that

discretion if it denies leave for reasons of, inter alia, undue

delay in filing the motion, repeated failure to cure

deficiencies, undue prejudice to the opposing party or futility

of amendment. U.S. ex rel. Gagne v. City of Worcester, 565 F.3d

40, 48 (1st Cir. 2009). The standard for allowing amendments

under Fed. R. Civ. P. 15(a) has often been described as

“liberal,” O’Connell v. Hyatt Hotels, 357 F.3d 152, 154 (1st

Cir. 2004), and a reviewing court “must consider the totality of

the circumstances” in making the determination. Nikitine v.

Wilmington Tr. Co., 715 F.3d 388, 390 (1st Cir. 2013).

Defendants urge the Court to deny plaintiff’s motion to

amend because 20 months has elapsed between the filing of his

original complaint and the filing of the motion to amend. This

delay, according to defendants, was undue and is therefore

inherently prejudicial. They draw attention to the procedural

benchmarks that the case has already passed, including the

transfer of venue and the arbitration proceeding which dealt

with Weinreich’s stake in GETG. According to defendants, the

plaintiff’s remaining grievances can be fairly adjudicated

within the framework of his original complaint and any amendment

would be futile.

The First Circuit Court of Appeals has repeatedly

recognized that “undue delay in moving to amend, even standing

alone, may be...an adequate reason” to deny a motion for leave

to amend. United States ex rel. Hagerty v. Cyberonics, Inc., 146

F. Supp. 3d 337, 345 (D. Mass. 2015), aff'd 844 F.3d 26 (1st

Cir. 2016) (quoting In re Lombardo, 755 F.3d 1, 3 (1st Cir.

2014)). Thus, when “a considerable period of time has passed

between the filing of the complaint and the motion to amend,”

the burden is on “the movant to show some valid reason for his

neglect and delay.” Nikitine, 715 F.3d at 390 (quoting Hayes v.

New Eng. Millwork Distribs., Inc., 602 F.2d 15, 19–20 (1st Cir.

1979)). In assessing the sufficiency of such a reason, “a court

will take account of what the movant knew or should have known

and what he did or should have done” to determine whether such

alterations could have been requested earlier, perhaps even at

the original time of filing. In re Lombardo, 755 F.3d at 4

(quoting Invest Almaz v. Temple–Inland Forest Prods. Corp., 243

F.3d 57, 72 (1st Cir. 2001)).

Here, Weinreich has satisfied this minimal burden by

demonstrating that, while the delay has been considerable, it

stemmed largely from procedural interruptions and uncertainties

beyond his control. This litigation, originally filed in Utah

state court, was removed to the federal court of Utah by the

defendants, stayed for over six months while the parties engaged

in a valuation and right of first refusal process, and only then

transferred to this Court. Three months then elapsed between

that transfer and the filing of the pending motion to amend.

That activity altered the “legal landscape” of the case, and

justifies plaintiff’s motion to amend, particularly when he has

not previously had an opportunity to make the responsive

changes. Del Rosario on behalf of Burke v. Nashoba Reg'l Sch.

Dist., No. CV 19-40107-TSH, 2021 WL 4295852, at *2 (D. Mass.

Sept. 21, 2021). It is relevant to note that Weinreich

originally sought leave to amend his complaint in the District

of Utah, but the court declined to decide that motion prior to

the transfer of venue. Nikitine, 715 F.3d at 390 (“Whether the

plaintiff, by rule or court order, had a prior opportunity to

amend is one data point to be taken into account, but that

circumstance does not have a talismanic significance” (citations

omitted)).

Moreover, defendants will not suffer prejudice because this

case remains in its nascent stages.

[A]s a case progresses...the burden on a plaintiff

seeking to amend a complaint becomes more exacting.

Steir v. Girl Scouts of the USA, 383 F.3d 7, 12 (1st Cir. 2004).

In this suit, discovery is just beginning and dispositive

motions are not due for over nine months. The circumstances

here are therefore fundamentally unlike those in the cases cited

by defendants for the proposition that even a relatively minimal

delay can be considered undue, and thus inherently prejudicial,

in certain circumstances.

Defendants oppose Weinreich’s motion to amend primarily

based on the alleged undue delay. Having rejected this

argument, the Court reserves for later consideration the

substantive merits of the plaintiff’s complaint. Moreover,

because Weinreich has proposed amendments to both counts upon

which defendants seek judgment on the pleadings, the Court

declines to rule on the defendants’ pending motion before the

forthcoming amendments to the underlying complaint are filed.

ORDER

For the foregoing reasons,

1) plaintiff's motion to amend (Docket No. 87) is

ALLOWED; and

2) defendants’ motion for judgment on the pleadings

(Docket No. 76) is DENIED WITHOUT PREJUDICE.

So ordered.

/s/ Nathaniel M. Gorton

Nathaniel M. Gorton

United States District Judge

Dated December 7, 2021