Indian Harbor Insurance Company v. Sarant International Commodities, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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INDIAN HARBOR INSURANCE COMPANY,

as subrogee of B&G Foods, Inc.,

Plaintiff,

-against-

MEMORANDUM

AND ORDER

SARANT INTERNATIONAL COMMODITIES,

CV 16-0025 (AKT)

INC., CELSAN ITHALAT IHRACAT VE

TICARET LIMITED SIRKETI, and

SHANDONG RICHFIELD FOODSTUFFS

INDUSTRY CO., LTD.,

Defendants.

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A. KATHLEEN TOMLINSON, Magistrate Judge:

I. PRELIMINARY STATEMENT

Plaintiff, Indian Harbor Insurance Company (“Indian Harbor” or “Plaintiff”), as subrogee

of B&G Foods, Inc. (“B&G”), commenced this action against Defendants Sarant International

Commodities, Inc. (“Sarant”), Celsan Ithalat Ihracat Ve Ticaret Limited Sirketi (“Celsan”), and

Shandong Richfield Foodstuffs Industry Co., Ltd. (“Shandong”) (collectively, “Defendants”)

alleging claims based on strict liability for product defect and negligence. See generally

Amended Complaint (“Am. Compl.”) [DE 16]. Plaintiff alleges that Defendants manufactured,

distributed, and/or supplied spices to B&G which contained prohibited allergens, namely,

peanuts and almonds. Id.

Presently before the Court is Plaintiff’s motion for leave to file a second amended

complaint, pursuant to Rule 15(a) of the Federal Rules of Civil Procedure. See Plaintiff’s

Memorandum of Law in Support of Motion to Amend (“Pl.’s Mem.”) [DE 48]; Plaintiff’s Reply

Memorandum of Law in Support of Motion to Amend (“Pl.’s Reply”) [DE 50]. Specifically,

Plaintiff seeks to add claims for breach of express and implied warranties against the Defendants,

in addition to a claim for breach of contract solely against Defendant Sarant. Id. Defendant

Sarant opposes the motion on the grounds that the amendments are futile. See Defendant’s

Memorandum in Opposition to Plaintiff’s Motion to Amend (“Def.’s Opp’n”) [DE 49].

For the reasons which follow, Plaintiff’s motion for leave to file a second amended

complaint is GRANTED. Plaintiff is directed to file its second amended complaint within 14

days of the entry of this Memorandum and Order.

II. RELEVANT BACKGROUND1

B&G, a New Jersey corporation, manufactures, distributes, and sells food products. Am.

Compl. ¶ 3. Defendant Sarant, a New York corporation, imports and distributes wholesale

spices. Id. ¶¶ 4, 9. Defendants Celsan and Shandong are foreign corporations which

manufacture, supply, distribute, and import wholesale spices. Id. ¶¶ 5-6, 24-25, 39-40.

According to Plaintiff, at some undefined point in time, Defendants manufactured, supplied,

imported, and/or distributed defective garlic power and ground cumin to B&G which contained

prohibited allergens, namely, peanuts and almonds. Id. ¶¶ 1, 12, 27, 32, 40, 47. Plaintiff alleges

that Defendants owed B&G a duty of care to provide spices free of allergens. Id. ¶¶ 11, 26, 34,

42, 49. As a result of Defendants actions, B&G incurred expenses in excess of $5,000,000 to

recall packaged food products, which presumably incorporated the defective spices, from

numerous retailers. Id. ¶¶ 1, 13, 28, 35, 43, 48, 50. Pursuant to an insurance policy B&G

obtained with Indian Harbor, B&G was reimbursed for the losses sustained from the recall. Id.

1 Error! Main Document Only.The Court’s summary of the relevant facts is taken

from the Amended Complaint, and for purposes of this motion only. The summary does not

constitute findings of fact. Rather, the Court assumes these facts to be true for purposes of

deciding the motion.

¶¶ 14, 29, 36, 44, 51. According to Indian Harbor, it is “subrogated … to all of B&G’s rights,

remedies, and causes of action as a result of the loss, including those against the defendants.” Id.

On January 4, 2016, Plaintiff commenced this action against Defendants Sarant and

Vitesse Food Ingredients, Inc. (“Vitesse”) asserting claims for strict liability for product defects

and negligence arising from damages sustained from the defective spices sold to B&G. See

Complaint (“Compl.”) [DE 1]. On February 1, 2017, the original Complaint was dismissed

against Defendant Vitesse by stipulation. See DE 11-12. The next day, Defendant Sarant filed a

third-party complaint against Celsan and Shandong setting forth claims for negligence,

contribution, and/or indemnification. See generally Third-Party Complaint (“Third-Party

Compl.”) [DE 13]. Plaintiff and Defendant Sarant stipulated to the filing of an Amended

Complaint on March 1, 2017. See DE 17. Although not expressly addressed in the stipulation,

the parties proposed an amended caption which recognized Celsan and Shandong as defendants,

but not third-party defendants, which implicitly withdrew the third-party complaint filed by

Defendant Sarant. Id. That same day, Plaintiff filed an Amended Complaint adding Celsan and

Shandong as defendants and asserting claims for strict liability and negligence against the added

defendants. See generally Am. Compl.

On April 14, 2017, Defendant Sarant filed an Answer with Cross-Claims against

Defendants/Cross-Claimants Celsan and Shandong for contribution and/or indemnification. See

Answer with Cross-Claims (“Answer”) [DE 22]. To date, service of the Amended Complaint

and Answer with Cross-Claims does not appear to have been effectuated on the

Defendants/Cross-Claimants Celsan and Shandong.

The parties consented to the jurisdiction of a United States Magistrate Judge for all

purposes on June 23, 2017. See DE 34. Judge Brown was the assigned Magistrate Judge at that

time. After the parties received several extensions of the deadlines to complete discovery and

file dispositive motions, Judge Brown set the final deadline to complete discovery at July 1,

2018. See May 24, 2018 Electronic Order. At a status conference held on August 15, 2018,

counsel reported that discovery was ongoing. See August 15, 2018 Electronic Order. The

parties were directed to submit a status report by November 15, 2018. Id. On that date, the

parties advised that discovery had been completed and they requested a settlement conference.

See DE 40. Judge Brown held a settlement conference on July 3, 2019 which was then

continued to October 7, 2019. See July 3, 2019 Electronic Order; October 7, 2019 Electronic

Order.

When the parties were unable to settle the action during the October 7, 2019 continued

conference, Judge Brown inquired whether any additional discovery was needed or if the parties

were prepared to set a briefing schedule for dispositive motions. After a dispute arose among

Plaintiff’s counsel and Defendant Sarant’s counsel as to whether the Amended Complaint

sufficiently pleaded a breach of contract claim, Plaintiff’s counsel requested leave to file a

second amended complaint to include such a claim. Defendant Sarant’s counsel thereafter

informed Judge Brown that additional discovery may be needed if Plaintiff’s anticipated motion

to amend were granted. Judge Brown advised all counsel to be prepared to file a briefing

schedule for any anticipated summary judgment motions shortly after the motion was resolved.

A briefing schedule was then set in place for Plaintiff’s motion for leave to file a second

amended complaint. See July 3, 2019 Electronic Order.

The instant motion was filed on December 16, 2019. See Pl.’s Mem.; Def.’s Opp’n; Pl.’s

Reply. Plaintiff attached a proposed second amended complaint (“SAC”) to the motion which

seeks to add claims for breach of express and implied warranties against the Defendants, in

addition to a claim for breach of contract solely against Defendant Sarant. See Proposed Second

Amended Complaint (“SAC”) [DE 48-3]. On January 17, 2020, the case was reassigned to this

Court for all purposes.

III. LEGAL STANDARD

Rule 15(a) of the Federal Rules of Civil Procedure provides that in cases where a party

cannot amend as a matter of course, “a party may amend its pleading only with the opposing

party’s written consent or the court’s leave.” Fed. R. Civ. P. 15(a)(2); see Lucente v. Int'l Bus.

Machs. Corp., 310 F.3d 243, 258 (2d Cir. 2002); Branum v. Clark, 927 F.2d 698, 705 (2d Cir.

1991). Whether to grant leave to amend is a decision squarely within the district court’s

discretion. Krupski v. Costa Crociere S. p. A., 560 U.S. 538, 540 (2010) (“[Rule 15(a)] gives a

district court discretion to decide whether to grant a motion to amend a pleading before trial.”);

see also Charter Commc'ns, Inc. v. Local Union No. 3, Int'l Bhd. of Elec. Workers, AFL-CIO,

338 F. Supp. 3d 242, 254 (S.D.N.Y. 2018) (“District courts ‘have broad discretion in

determining whether to grant leave to amend.’”) (quoting Gurary v. Winehouse, 235 F.3d 792,

801 (2d Cir. 2000)). A court “should freely give leave [to amend] when justice so

requires.” Fed. R. Civ. P. 15(a)(2); Holmes v. Grubman, 568 F.3d 329, 334 (2d Cir. 2009)

(quoting Fed. R. Civ. P. 15(a)(2)). “Amendments are generally favored because they tend to

facilitate a proper decision on the merits.” Rodriguez v. Ridge Pizza Inc., No. 16-CV-0254, 2018

WL 1335358, at *3-4 (E.D.N.Y. Mar. 15, 2018) (quoting MHANY Mgmt. v. Cty. of Nassau, 843

F. Supp. 2d 287, 340 (E.D.N.Y. 2012)); see also Johnson v. Landmark Hosp. LLC, No. 14-CV-

6839, 2016 WL 843286, at *2 (E.D.N.Y. Mar. 1, 2016) (quoting Blaskiewicz v. Cty. of Suffolk,

29 F. Supp. 2d 134, 137-38 (E.D.N.Y. 1998)).

A court should deny leave to amend only if there is “undue delay, bad faith or dilatory

motive on the part of the [moving party], repeated failure to cure deficiencies by amendments

previously allowed, undue prejudice to the [nonmoving party,] ... [or] futility.” Foman v.

Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962); see also Burch v. Pioneer Credit

Recovery, Inc., 551 F.3d 122, 126 (2d Cir. 2008) (citing Foman, 371 U.S. at 182); McCarthy v.

Dun & Bradstreet Corp., 482 F.3d 184, 200-201 (2d Cir. 2007). The party opposing the

amendment bears the burden of demonstrating good reason to deny the motion. Speedfit, LLC v.

Woodway USA, Inc., No. 13-CV-1276, 2015 WL 6143697, at *3 (E.D.N.Y. Oct. 19, 2015); see

also Charter Commc'ns, Inc. v. Local Union No. 3, Int'l Bhd. of Elec. Workers, AFL-CIO, 338 F.

Supp. 3d 242, 255–56 (S.D.N.Y. 2018) (“[Parties] opposing a motion to amend ... bear[ ] the

burden of establishing that an amendment would be futile.” ) (quoting Bonsey v. Kates, No. 13-

CV-2708, 2013 WL 4494678, at *8 (S.D.N.Y. Aug. 21, 2013); Joinnides v. Floral Park–

Bellerose Union Sch. Dist., No. 12-CV-5682, 2015 WL 1476422, at *9 (E.D.N.Y. Mar. 31,

2015) (“With respect to the Rule 15(a) factors, ‘[t]he party opposing the motion for leave to

amend has the burden of establishing that an amendment would be prejudicial or futile.’”)

(quoting Cummings-Fowler v. Suffolk Cmty. Coll., 282 F.R.D. 292, 296 (E.D.N.Y. 2012)).

Here, the proposed amendment is opposed solely on the grounds that it would be futile.

In assessing futility, courts must analyze “whether a proposed pleading would be able to

withstand a dispositive pretrial motion.” Themis Capital, LLC v. Democratic Republic of Congo,

No. 09-CV-1652, 2013 WL 1687198, at *6 (S.D.N.Y. Apr. 18, 2013) (citing Parker, 204 F.3d at

339); Touchtunes Music Corp. v. Rowe Int'l Corp., 847 F. Supp. 2d 606, 621 (S.D.N.Y.

2012)). “A proposed amendment would be futile when it would not survive a 12(b)(6) motion to

dismiss.” Sodhi v. Mercedes Benz Fin. Servs., USA, LLC, 957 F. Supp. 2d 252, 255 (E.D.N.Y.

2013); see also Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir. 2006) (“The Court ...

reviews proposed amendments for futility pursuant to Rule 12(b).”). Therefore, a proposed

amended complaint must “contain enough allegations of fact to state a claim for relief that is

‘plausible on its face.’” Mendez v. U.S. Nonwovens Corp., 2 F. Supp. 3d 442, 451 (E.D.N.Y.

2014) (quoting Bell Atl. Corp. v. Twombley, 550 U.S. 544, 570, 127 S. Ct. 1955 (2007)).

When a party objects to a motion to amend on futility grounds, “the moving party must

merely show that it has at least colorable grounds for relief.” Copantitla v. Fiskardo Estiatorio,

Inc., No. 09-CV-1608, 2010 WL 1327921, at *3 (S.D.N.Y. Apr. 5, 2010) (internal quotation

omitted). In deciding whether an amended pleading asserts colorable claims, a court “is required

to accept the material facts alleged in the amended [pleading] as true and draw reasonable

inferences in the [movant’s] favor.” Alkhatib v. New York Motor Group, LLC, No. 13-CV-2337,

2015 WL 3507340, at *7 (E.D.N.Y. June 3, 2015) (quoting Mendez v. U.S. Nonwovens Corp., 2

F. Supp. 3d 442, 451 (E.D.N.Y. 2014)); see also Panther Partners, Inc. v. Ikanos

Communications, Inc., 681 F.3d 114, 119 (2d Cir. 2012) (“In assessing whether the proposed

[amended] complaint states a claim, [courts] consider the proposed amendments along with the

remainder of the complaint ... accept as true all non-conclusory factual allegations therein, and

draw all reasonable inferences in plaintiff's favor to determine whether the allegations plausibly

give rise to an entitlement to relief.”). “A court is not required to make a final determination on

the merits of a proposed claim or defense, but instead, must only “satisfy itself that [the claim or

defense] is colorable and not frivolous.’” Rodriguez, 2018 WL 1335358, at *3-4 (quoting UMG

Recordings, Inc. v. Lindor, No. 05-CV-1095, 2006 WL 3335048, at *2 (E.D.N.Y. Nov. 9,

2006)). Therefore, the moving party “is not required to ‘establish a probability it would prevail

on the merits in order for the court to grant its motion to amend ... [i]nstead ... [movant] is merely

required to assert proposed amendments which are not frivolous on their face.’” UMG, 2006

WL 3335048, at *2 (quoting T & N PLC, at *2).

By comparison, Rule 16(b) provides that where a court has adopted a discovery

scheduling order, that order may only “be modified for good cause and with the judge’s

consent.” Fed. R. Civ. P. 16(b)(4). The purpose of Rule 16(b) is “to offer a measure of certainty

in pretrial proceedings, ensuring that at some point both the parties and the pleadings will be

fixed.” Parker v. Columbia Pictures Indus., 204 F.3d 326, 339-40 (2d Cir. 2000) (internal

citations and quotation marks omitted) (citing Fed. R. Civ. P. 16 advisory committee's note

(1983 amendment, discussion of subsection (b)). Thus, “[w]here a scheduling order has been

entered, the lenient standard under Rule 15(a), which provides leave to amend ‘shall be freely

given,’ must be balanced against the requirement under Rule 16(b) that the Court's scheduling

order ‘shall not be modified except upon a showing of good cause.’” Grochowski v. Phoenix

Constr., 318 F.3d 80, 86 (2d Cir. 2003) (quoting FED. R. CIV. P. 15 and 16)); see also Parker,

204 F.3d at 340; Perfect Pearl Co. v. Majestic Pearl & Stone, Inc., 889 F. Supp. 2d 453, 457

(S.D.N.Y. 2012). With these principles in mind, the Court turns to the merits of the motion.

IV. DISCUSSION

A. Preliminary Issues

First, despite the advanced stage of this action, the Court notes that neither party

contends the instant motion is subject to the more demanding “good cause” standard

under Rule 16(b). Having reviewed the record, the Court has not identified any scheduling order

expressly setting a deadline by which the parties had to amend their pleadings in this action.

Moreover, when the instant motion was filed, the parties appeared to be operating without a

formal discovery deadline. Implicit in Judge Brown’s inquiry regarding the parties’ need to

conduct additional discovery at the October 7, 2019 settlement conference is the sense that

discovery was ongoing at the time. Given the absence of a scheduling order providing for a date

to amend the pleadings or the passing of any formal discovery deadline, along with the fact that

both parties’ submissions solely reference Rule 15(a), the Court will apply the more lenient

standard under Rule 15(a) in resolving the instant motion.

Second, although a proposed SAC is attached to the instant motion, Plaintiff included

here in the instant motion the bulk of the factual details supporting the claims to be added, rather

than including them in the proposed SAC. Plaintiff’s motion also attaches documentary

evidence on which the added claims are based, including an email exchange between B&G --

Plaintiff’s subrogor -- and Defendant Sarant. See QA Email and Form, Ex. D to Mot. to Amend

[48-4]. In that exchange, Defendant Sarant provided B&G with its subcontractor Celsan’s “QA

Form and Questionnaire.” Id. The “QA Form and Questionnaire” provided responses to

questions regarding, among other things, the ingredients used to manufacture the spices and the

allergen control program in place by the subcontractor. Id. “[F]ederal courts have complete

discretion to determine whether or not to accept the submission of any material beyond the

pleadings offered in conjunction with a Rule 12(b)(6) motion.” Giugliano v. F3 Capital

Partners, LLC, No. 14-CV-7240, 2015 WL 5124796 (E.D.N.Y. Sept. 1, 2015) (citation and

quotation marks omitted). In adjudicating a motion to dismiss, the Court must limit itself to facts

alleged in the complaint, which are accepted as true; to documents attached to the complaint as

exhibits or incorporated in the complaint by reference; to matters of which judicial notice may be

taken; or to documents whose terms and effect are relied upon heavily in the complaint and, thus,

are rendered “integral” to the complaint. Chambers v. Time Warner, Inc., 282 F. 3d 147, 152–53

(2d Cir. 2002); see also ASARCO LLC v. Goodwin, 756 F. 3d 191, 198 (2d Cir. 2014). To the

extent necessary, the Court will consider the documentary evidence attached to the instant

motion and proposed SAC and which appears to be integral to the proposed SAC. See E.

Materials Corp. v. Mitsubishi Plastics Composites Am., Inc., 307 F. Supp. 3d 52, 58 (E.D.N.Y.

2018) (considering the exhibits attached to the attorney declaration filed in support of motion for

leave to amend the complaint); Rozenzweig v. ClaimFox, Inc., 251 F. Supp. 3d 449, 456

(E.D.N.Y. 2017) (“[A]s it appears that the Plaintiff incorporated several exhibits in her

memorandum of law, the Court will also consider the exhibits as additional facts proposed by the

Plaintiff.”).

B. Proposed Amendments

“Under New York law, to state a claim of breach of contract, the complaint must allege:

(i) the formation of a contract between the parties; (ii) performance by the plaintiff; (iii) failure

of defendant to perform; and (iv) damages.” Wallert v. Atlan, 141 F. Supp. 3d 258, 286

(S.D.N.Y. 2015) (internal quotation marks and citations omitted); see also Harsco Corp. v.

Segui, 91 F.3d 337, 348 (2d Cir. 1996) (holding same). A complaint alleging a breach of

contract must “identify, in non-conclusory fashion, the specific terms of the contract that a

defendant has breached.” Wallert, 141 F. Supp. 3d at 286. “While these elements need not be

separately pleaded, failure to allege them will result in dismissal. Courts have generally

recognized that relatively simple allegations will suffice to plead a breach of contract claim even

post-Twombly and Iqbal.” Speedfit LLC v. Woodway USA, Inc., 53 F. Supp. 3d 561, 578

(E.D.N.Y. 2014) (internal quotation marks and citations omitted).

The proposed SAC alleges that “pursuant to agreement, Sarant agreed to furnish ground

cumin and other spices to B&G from allergens including but not limited to peanuts and tree

nuts,” that “Sarant breached its contractual obligations owed to B&G by, among other things …

supplying ground cumin or other spices to B&G that contained allergens,” and that as “a direct

and proximate result of [Sarant’s] breach of contractual obligations to B&G, plainitff’s subrogor

B&G sustained damages.” SAC ¶¶ 10-12.

Moreover, to state a claim for breach of express warranty, a plaintiff must allege: “(1) the

existence of material statement amounting to a warranty, (2) the buyer’s reliance on this

warranty as a basis for the contract with the immediate seller, (3) breach of the warranty, and (4)

injury to the buyer caused by the breach.” Cordova v. Smith & Nephew, Inc., No. 14-CV-351,

2014 WL 3749421, at *7 (E.D.N.Y. July 30, 2014) (citation omitted). A breach of implied

warranty requires a plaintiff to show “that the product was not reasonably fit for its intended

purpose.” Bertini v. Smith & Nephew, Inc., 8 F. Supp. 3d 246, 259 (E.D.N.Y. Mar. 17, 2014)

(citation omitted). “The implied warranty of merchantability is a guarantee by the seller that its

goods are fit for the intended purpose for which they are used and that they will pass in the trade

without objection.” Caronia v. Philip Morris USA, Inc., 715 F.3d 417, 433 (2d Cir. 2013)

(quoting Saratoga Spa & Bath, Inc. v. Beeche Systems Corp., 656 N.Y.S.2d 787, 789 (App. Div.

1997).

The proposed SAC alleges that “Sarant … expressly warranted to B&G that its ground

cumin and other spice products were a) unadulterated and/o otherwise free of prohibited peanuts

and tree nuts; b) manufactured in a facility that was free of prohibited peanuts and tree nuts; c) in

compliance with applicable local, state, and federal statutes …; d) tested or inspected to

determine whether or not said spices contained allergens including but not limited to peanuts and

tree nuts; and e) have met the appropriate standard of care required by a reasonable distributor,”

that “B&G relied on Sarant’s express warranties to B&G,” that these warranties were breached,

and as “a direct and proximate result of its breach of contractual obligations to B&G, plaintiff’s

subrogor B&G sustained damages.” SAC ¶¶ 22-25. The proposed SAC further alleges that

“Sarant breached its implied warranty to B&G that its products, including ground cumin and or

other spices were fit for its intended purposes,” the “ground cumin and or other spices provided

by Sarant were defective and unfit for their intended purpose,” and that as “a direct and

proximate result of its breach of contractual obligations to B&G, plaintiff’s subrogor B&G

sustained damages.” Id. ¶¶ 29-32.

The Court finds that the allegations in the proposed SAC sufficiently state claims for

breach of contract and breach of express and implied warranties. Defendant Sarant does not

dispute the sufficiency of the allegations but rather contends that the amendments are futile

because a contract never existed between the parties and any warranties that may exist were

made by Celsan and not Sarant. See Def.’s Opp’n at 1-2. Pointing to the “QA Form and

Questionnaire,” Defendant Sarant contends that the form was filled out and signed by Celsan’s

representative and that Plaintiff “has not shown any documents at all whereby … Sarant

warranted that the ground cumin seeds supplied by Celsan were free of allergens such as tree

nuts and peanuts.” Id. at 2 (emphasis added).

As discussed above, the Court’s inquiry into the futility of a proposed amendment is

similar to an inquiry on a motion to dismiss pursuant to Rule 12(b)(6). See Dougherty v. Town of

N. Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 88 (2d Cir. 2002). “At the motion to dismiss

stage, a district court may dismiss a breach of contract claim only if the terms of the contract are

unambiguous.” Orchard Hill Master Fund Ltd. v. SBA Commc'ns Corp., 830 F.3d 152, 156 (2d

Cir. 2016) (citing Eternity Global Master Fund Ltd. v. Morgan Guar. Trust Co. of N.Y., 375 F.3d

168, 178 (2d Cir. 2004) (noting that “if a contract is ambiguous ..., a court has insufficient data to

dismiss a complaint for failure to state a claim”)). “Whether or not a writing is ambiguous is a

question of law to be resolved by the courts.” Orlander v. Staples, Inc., 802 F.3d 289, 294 (2d

Cir. 2015) (internal quotation marks and citations omitted). A contract is ambiguous under New

York law “if its terms could suggest more than one meaning when viewed objectively by a

reasonably intelligent person who has examined the context of the entire integrated agreement

and who is cognizant of the customs, practices, usages and terminology as generally understood

in the particular trade or business.” Chesapeake Energy Corp. v. Bank of N.Y. Mellon Tr. Co.,

N.A., 773 F.3d 110, 114 (2d Cir. 2014) (internal quotation marks and citation omitted). A

contract is unambiguous, however, if “the contract language has a definite and precise meaning

… and concerning which there is no reasonable basis for a difference of opinion.” Id.

(quoting Law Debenture Trust Co. of N.Y. v. Maverick Tube Corp., 595 F.3d 458, 466 (2d Cir.

2010)). The ambiguity of a provision is analyzed under the “normal rules of contract

interpretation: ‘words and phrases should be given their plain meaning’ and a ‘contract should be

construed so as to give full meaning and effect to all of its provisions.’” Orlander, 802 F.3d at

295 (quoting Shaw Grp. Inc. v. Triplefine Int'l Corp., 322 F.3d 115, 121 (2d Cir. 2003)).

Here, whether a contract between B&G and the Defendant Sarant existed by virtue of

their email exchange regarding the “QA Form and Questionnaire” depends on the language of

the email exchange and “QA Form and Questionnaire.” B&G’s email correspondence to

Defendant Sarant stated: “We are again in the process of updating our ingredient specs. We did

not receive any information from you last year concerning the ingredients from your Company.

We need this information for each ingredient ASAP. The forms are attached.” QA Email and

Form, Ex. D to Mot. to Amend at 1. Defendant Sarant responded: “I have been awaiting for

your overseas suppliers to complete the relevant forms. As you will notice, as importers and

distributers, we have alternative suppliers for some of the raw materials that we supply you

with.” Id. Attached to Defendant Sarant’s email response was a completed “QA Form and

Questionnaire” which lists “Celsan Ltd. Sti” as “Vendor Name” and contains representations

regarding the ingredient’s specifications and vendor’s allergen control program. Id. at 4.

Whether Defendant Sarant agreed to or warranted that it would supply B&G with spices which

conformed with those representations or that it would ensure its vendor adhered to its own

representations by virtue of Defendant Sarant’s email response to B&G is unclear based on the

language of the email exchange. Because of the ambiguity of the email exchange, it would not

be appropriate to dismiss the claims for breach of contract and express and implied warranties at

this stage. Therefore, it would similarly be inappropriate to preclude the proposed amendment

based on futility.

Moreover, Defendant Sarant’s reliance on Assured Guaranteed Municipal Corp v. DB

Structured Products, Inc., 33 Misc.3d 720, 927 N.Y.S.2d 880 (Sup. Ct., NY Cty., 2011) to argue

that it cannot be held liable for Celsan’s warranties because it did not make any express

warranties itself is misplaced. In Assured Guaranteed, the defendant made an express warranty

to the plaintiff which was “coextensive” with a warranty given by a third-party defendant to the

direct defendant. Assured Guaranteed, 33 Misc. 3d at 736, 927 N.Y.S.2d at 892. The issue

before the court was not whether the plaintiff could maintain its claims for breach of contract and

express warranties against the direct defendant, but rather whether the defendant was permitted

to indemnify the third-party defendant through a third-party complaint for the claims asserted by

the plaintiff against the defendant. Id. That is not the issue before this Court at this time.

Accepting the Plaintiff’s allegations in the proposed SAC as true, and drawing all

reasonable inferences in Plaintiff’s favor, as it must, the Court finds that the Plaintiff has

satisfied the liberal pleading standard under Rule 15(a) and has adequately pleaded claims for

breach of contract and breach of express and implied warranties. As such, the Court finds that

the proposed changes to the Amended Complaint are not futile.

There was delay in seeking the amendments proposed here. However, “[m]ere delay …

absent showing of bad faith or undue prejudice, does not provide a basis for a district court to

deny the right to amend.” Fresh Del Monte Produce, Inc. v. Del Monte Foods, Inc., 304 F.R.D.

170, 174 (S.D.N.Y. 2014) (quoting State Teachers Ret. Bd. v. Fluor Corp., 654 F.2d 843, 856

(2d Cir. 1981)). Defendant Sarant has not made any showing that it would suffer undue

prejudice if Plaintiff were permitted to filed the proposed SAC. See Joinnides v. Floral Park–

Bellerose Union Sch. Dist., No. 12-CV-5682, 2015 WL 1476422, at *9 (E.D.N.Y. Mar. 31,

2015) (“With respect to the Rule 15(a) factors, ‘[t]he party opposing the motion for leave to

amend has the burden of establishing that an amendment would be prejudicial or futile.’”).

While the parties advised Judge Brown that additional discovery would be required as a result of

the amendment, “the fact that the opposing party will have to undertake additional discovery,

standing alone, does not suffice to warrant denial of a motion to amend a pleading.” Id.

(citing Christians of Cal., Inc. v. Clive Christian N.Y., LLP, No. 13-CV-0275, 2014 WL

3605526, at *5 (S.D.N.Y. July 18, 2014)).

For these reasons, the Court finds that Plaintiff’s proposed amendments are neither futile

nor would they cause prejudice to Defendant Sarant. Therefore, leave to amend under Rule

15(a) is permitted.

V. CONCLUSION

For the foregoing reasons, Plaintiff’s motion for leave to amend is GRANTED. Plaintiff

is directed to file its Second Amended Complaint within fourteen (14) days of entry of this

Order. Further, any party seeking to conduct additional discovery related to the amended claims

is directed to file a letter within fourteen (14) days of this Order stating the specific discovery

sought to be conducted and the proposed time frame for such discovery to be concluded.

SO ORDERED.

Dated: Central Islip, New York

January 15, 2021

/s/ A. Kathleen Tomlinson

A. KATHLEEN TOMLINSON

United States Magistrate Judge