Brown v. Seabrooks

FIONR T THHEE U WNEITSETEDR SNTA DTIESTS RDIICSTT ROIFC TV ICROGUINRITA

HARRISONBURG DIVISION

ROBERT LEE BROWN, JR., )

) Case No. 5:20-cv-00010

v. )

)

MILLER SEABROOKS, et al., )

) By: Michael F. Urbanski

Defendant. ) Chief United States District Judge

MEMORANDUM OPINION

This matter is before the court on defendant Robert Lee Brown, Jr.’s (“Brown”)

motion to dismiss or strike the counterclaim included in plaintiff Miller Seabrooks’

(“Seabrooks”) amended complaint. ECF No. 27. Brown claims that the counterclaims were

compulsory under Federal Rule of Civil Procedure (“Rule”) 13(a)1 and therefore must have

been brought with the original answer. Brown further argues that under Rule 15,2 a party may

1 Rule 13. Counterclaim and Crossclaim:

(a) Compulsory Counterclaim.

(1) In General. A pleading must state as a counterclaim any claim that—at the time of its service—the

pleader has against an opposing party if the claim:

(A) arises out of the transaction or occurrence that is the subject matter of the opposing party’s

claim; and

(B) does not require adding another party over whom the court cannot acquire jurisdiction.

(2) Exceptions. The pleader need not state the claim if:

(A) when the action was commenced, the claim was the subject of another pending action; or

(B) the opposing party sued on its claim by attachment or other process that did not establish

personal jurisdiction over the pleader on that claim, and the pleader does not assert any counterclaim

under this rule.

Fed. R. Civ. P. 13.

2 Rule 15. Amended and Supplemental Pleadings:

(a) Amendments Before Trial.

(1) Amending as a Matter of Course. A party may amend its pleading once as a matter of course within:

(A) 21 days after serving it, or

(B) if the pleading is one to which a responsive pleading is required, 21 days after service of a

responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is

earlier.

(2) Other Amendments. In all other cases, a party may amend its pleading only with the opposing

party’s written consent or the court’s leave. The court should freely give leave when justice so requires.

(3) Time to Respond. Unless the court orders otherwise, any required response to an amended pleading

must be made within the time remaining to respond to the original pleading or within 14 days after service

not amend the answer to include counterclaims without written consent of the opposing party

or leave of the court, which Brown states Seabrooks has not obtained. Seabrooks opposed the

motion, requesting leave to amend the complaint to include the counterclaims and arguing

that, due to Seabrooks’ relationship with his insurer, he was unable to bring the counterclaims

as part of the answer. ECF No. 30. Brown replied, ECF No. 31, and the court heard argument

on October 28, 2020.

This case, Brown v. Seabrooks, et al., No. 5:20-cv-10 (W.D. Va. Feb. 13, 2020)

(hereafter “Brown”) has been consolidated with a related case, Seabrooks v. Brown, No. 5:20-

cv-39 (W.D. Va. June 29, 2020) (“Seabrooks”), in which Seabrooks sought to bring the same

claims against Brown as he attempts to bring as counterclaims in this case. In Seabrooks,

Brown filed a similar motion to dismiss the complaint for failure to allege the compulsory

counterclaims in his answer in Brown. For the reasons set forth herein, the court has entered

an order that DISMISSES without prejudice the related case, Seabrooks, and DENIES the

motion to dismiss in the instant case, Brown. The court GRANTS Seabrooks leave to amend

his answer to include the counterclaims.

I.

This case arises out of a multivehicle accident which occurred on or about July 26, 2018

on Interstate 81 in Rockingham County, Virginia. Compl., ECF No. 1 at 2. The parties agree

that they were both driving on I-81 at the time, with Brown driving in the left lane and

Seabrooks driving in the right lane. Compare id., with Am. Answer and Countercl., ECF No.

25 at 4.

The parties disagree as to the cause of the collision. Brown contends that Seabrooks

negligently merged from the right lane to the left lane, forcing Brown off the road and causing

the accident. ECF No. 1 at 1–2. Brown claims that when he attempted to recover his path, his

vehicle “jack-knifed,” colliding with Seabrooks’ vehicle, rolling onto the driver’s side off the

interstate and into the median. Id. Brown alleges that Seabrooks negligently failed to keep his

vehicle under control, failed to use ordinary care in operating his vehicle, improperly changed

lanes, and failed to maintain his lane of travel. Id. at 2. Brown claims he suffered “serious and

permanent injuries and disfigurement and suffered a loss of wages” due to the accident. Id.

He seeks $1,500,000 in damages.

Alternatively, Seabrooks claims that Brown negligently merged from the left lane to the

right lane, causing cargo attached to Brown’s vehicle to come loose and cause the accident.

ECF No. 25 at 4. Seabrooks claims he suffered “serious and permanent injuries” and “has

incurred loss of earnings.” Id. at 2. He seeks $900,000 in damages. Id. at 5.

In November 2018, Seabrooks filed a complaint against Brown for negligence arising

out of the accident, which was dismissed for lack of personal jurisdiction. Seabrooks v. Brown,

Jr. et al., No. 1:18-cv-10155 (S.D.N.Y. Oct. 24, 2019), ECF No. 53.

Brown filed the instant action against Seabrooks in the Western District of Virginia on

February 13, 2020. On July 21, 2020, plaintiff Brown amended the complaint to include S&M

Moving and Storage (“S&M”), alleging that Seabrooks was an agent or employee of S&M and

driving a vehicle leased by S&M at the time of the accident. ECF No. 18. Brown claims S&M

is vicariously liable for the accident allegedly caused by Seabrooks. Id. at 2. Seabrooks filed an

answer to the amended complaint on August 4, 2020.

Separately, Seabrooks filed a lawsuit against Brown and Evans Delivery Company, Inc.

(“Evans”) for negligence on June 29, 2020 in the Western District of Virginia. Seabrooks, ECF

No. 1. Seabrooks claims that Brown was acting as an employee or agent of Evans and that he

negligently caused the accident and injury. Id. Evans concedes that Brown was working within

the scope of his employment at the time of the accident, ECF No. 5, but denies any negligence.

Brown filed a motion to dismiss on August 18, 2020, arguing that the claim is barred because

Seabrooks failed to bring it as a Rule 13(a) compulsory counterclaim in Brown. ECF No. 7.

On August 25, 2020, after Brown filed his motion to dismiss in Seabrooks, Seabrooks

filed an amended answer in Brown including for the first time a counterclaim against Brown.

Brown, ECF No. 25. Seabrooks’ counterclaim alleges that Brown infringed on his travel lane

negligently, caused the accident and injury, and owes Seabrooks $900,000 in damages. Id. at

3-4. On September 8, 2020, Brown filed a motion to dismiss or strike the counterclaim for

failure to state a claim and a motion to strike the counterclaim from the amended complaint.

ECF No. 27. He claims Seabrooks cannot bring a counterclaim now because he failed to plead

it in his original answer and because he impermissibly attempted to circumvent the rules by

filing a separate civil action. He further argues that the claims may only be revived with either

the written consent of the opposing party or leave of the court under Rule 15.

In Seabrooks, Seabrooks filed a motion to consolidate this case with this case.

Seabrooks, ECF No. 10. In his brief, counsel for Seabrooks explained that the attorney

representing Seabrooks in the original lawsuit filed by Brown was replaced, and that due to

the unique relationship between Seabrooks and his insurer, he needed to file a separate action

under which an independent investigation would be conducted for liability purposes.

Seabrooks, ECF No. 11. Magistrate Judge Joel C. Hoppe granted the order to consolidate the

cases under Rule 42, finding the two actions “pose substantially similar issues of law and fact”

and that consolidation would be “appropriate.” Seabrooks, ECF No. 21 at 3. Judge Hoppe

confirmed that consolidation did not bear on the merits of the pending motions to dismiss in

both actions. Id. at 6–7.

II.

Brown has filed a motion to dismiss the counterclaim as untimely and barred under

Rule 12(b)(6) or, in the alternative, a motion to strike the counterclaim from the amended

answer under Rule 12(f).3 The court finds a Rule 12(b)(6) analysis inappropriate since the

dispute hinges on the procedural developments in the consolidated cases rather than

substantive facts pled in the complaint. Instead, the court considers whether the motion to

strike the counterclaim should succeed under Rule 12(f) as “insufficient” or “redundant,

immaterial, impertinent, or scandalous matter,” or under Rule 15 for undue delay. Fed. R. Civ.

P. 12(f); Fed. R. Civ P. 15. The court construes Seabrooks’ filing of an amended answer and

its opposition to the motion to dismiss as a request for leave to file the counterclaim.

Rule 12(f) provides that “[t]he court may strike from a pleading an insufficient defense

or any redundant, immaterial, impertinent, or scandalous matter.” In applying such rule, “a

district court has broad discretion in deciding whether to strike matters from pleadings.”

F.D.I.C. v. Willetts, 882 F. Supp. 2d 859, 870 (E.D.N.C. 2012), recons. den. (Oct. 2, 2012)

(citing Renaissance Greeting Cards, Inc. v. Dollar Tree Stores, Inc., 227 F. App’x 239, 246

3 Rule 12. Defenses and Objections: When and How Presented; Motion for Judgment on the Pleadings;

Consolidating Motions; Waiving Defenses; Pretrial Hearing:

(f) Motion to Strike. The court may strike from a pleading an insufficient defense or any redundant,

immaterial, impertinent, or scandalous matter. The court may act:

(1) on its own; or

(2) on motion made by a party either before responding to the pleading or, if a response is not allowed,

within 21 days after being served with the pleading.

(4th Cir. 2007)). However, “Rule 12(f) motions are generally viewed with disfavor ‘because

striking a portion of a pleading is a drastic remedy and because it is often sought by the movant

simply as a dilatory tactic.’” Waste Mgmt. Holdings, Inc. v. Gilmore, 252 F.3d 316, 347 (4th

Cir. 2001) (quoting 5A Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure

§ 1380, 647 (2d ed. 1990)).

“Although Rule 12(f) provides the procedural mechanism for striking a pleading, a

central issue in this motion is [Rule] 15(a), which governs amendments to pleadings.” Virginia

Innovation Scis., Inc. v. Samsung Elecs. Co., 11 F. Supp. 3d 622, 630 (E.D. Va. 2014). Rule

15 provides that a party may amend its pleading after the time limit specified in Rule 15(a)(1)

“only with the opposing party’s written consent or the court’s leave.” Fed. R. Civ. P. 15(a)(2).

Rule 15(a)(2) further provides that “[t]he court should freely give leave when justice so

requires.” Id. The Fourth Circuit allows parties to liberally amend “in keeping with the spirit

of [Rule] 15(a).” Galustian v. Peter, 591 F.3d 724, 729 (4th Cir. 2010).

III.

The court finds Seabrooks’ counterclaims compulsory as they arose out of the same

“transaction or occurrence” as the July 26, 2020 accident. A compulsory counterclaim is a

claim that “arises out of the transaction or occurrence that is the subject matter of the

opposing party’s claim” and does not require the addition of a third party over whom the court

lacks jurisdiction. Fed. R. Civ. P. 13(a)(1). To help determine if a counterclaim is compulsory,

the Fourth Circuit considers whether (1) the counterclaim involves largely the same issues of

fact and law as the original claim, (2) res judicata would bar subsequent suit on the

counterclaim absent this rule, (3) the counterclaim would be supported or refuted by

substantially the same evidence as the original claim, and (4) there is some logical relationship

between the counterclaim and the original claim. Painter v. Harvey, 863 F.2d 329, 331 (4th

Cir. 1988) (citing Sue & Sam Mfg. Co. v. B-L-S Constr. Co., 538 F.2d 1048, 1051–53 (4th Cir.

1976)). Generally, compulsory counterclaims must be raised in the pleadings or they will be

forfeited. Fed. R. Civ. P. 13(a)(1).

Brown requests the court strike the counterclaims, arguing that Rule 15(a) does not

permit Seabrooks to bring new counterclaims, even if compulsory, when the amended

complaint does not “change the theory or scope of the case.” Id. at 4. Brown contends that

even if Rule 15(a) permits the counterclaims, the court should still strike them as untimely filed

and a dilatory tactic. ECF No. 28 at 7–8. At the hearing, Seabrooks responded that the

counterclaim was not filed alongside the answer due to contractual limitations on the

insurance-appointed representative in the matter, which allegedly cabined counsel for

Seabrooks’ responsibilities to responding to the complaint and prevented him from asserting

affirmative counterclaims on Seabrooks’ behalf. Seabrooks has retained new counsel, who

argues that he was permitted to assert new counterclaims in responding to an amended

complaint as a matter of right. ECF No. 30 at 5. Seabrooks further argues that he filed his

original answer to the amended complaint within 14 days pursuant to Rule 15(a)(3), and filed

his amended answer to the amended complaint within 21 days thereafter, pursuant to Rule

15(a)(1)(A). Therefore, he argues, his pleading was timely.

The court finds no grounds for striking the compulsory counterclaims from the

amendment. Although the court finds that the counterclaims were untimely, and consequently

not filed as a matter of right under Rule 15(a), it also finds good cause to grant Seabrooks leave

to file the counterclaim. Virginia Innovation, 11 F. Supp. 3d at 630–32 (holding that under the

“moderate approach,” counterclaims in response to an amended complaint must reflect the

breadth of the changes in the amended complaint). The “general purpose” of the compulsory

counterclaim mandates of Rule 13(a) is “to have all related actions heard at one time”. Painter,

863 F.2d at 334. Consistent with this policy, the Fourth Circuit has held “compulsory

counterclaims should be granted freely.” Barnes Grp., Inc. v. C&C Prods., Inc., 716 F.2d 1023,

1035 n. 35 (4th Cir. 1983) (citing 3 J. Moore, MOORE’S FEDERAL PRACTICE ¶ 13.33, at

13-196 (2d ed. 1983)).

In granting Seabrooks leave to file his counterclaims, the court considers whether there

is “good cause” to depart from the court’s scheduling order in the case. Fed. R. Civ. P. 16(b)(4).

“[A]fter the deadlines provided by a scheduling order have passed, the good cause standard

must be satisfied to justify leave to amend the pleadings.” Nourison Rug Corp. v. Parvizian,

535 F.3d 295, 298 (4th Cir. 2008). “Under the ‘good cause’ standard for modifying a scheduling

order, courts focus on the movant’s diligence.” Osprey Consulting I, Inc. v. Westport Ins.

Corp., No. CV SAG-19-03092, 2020 WL 5106715, at *3 (D. Md. Aug. 31, 2020). Although

the court disagrees with Seabrooks’ assertion that the insurance company’s representative did

not have the authority to file counterclaims on his behalf, the court finds no bad faith in the

failure to file the counterclaims. Seabrooks indicated that the insurance company was wary of

filing counterclaims which might potentially give rise to a conflict of interest issue later in the

litigation. Further, denying Seabrooks leave to bring counterclaims would prevent him from

bringing those claims again under res judicata. Accordingly, the court finds good cause to

amend the scheduling order.

Next, the court evaluates the motion for leave to file the counterclaims under Rule

15(a). Although a party should move to amend a pleading as soon as the need to do so becomes

apparent, “delay alone is an insufficient reason to deny leave to amend.” Edwards v. City of

Goldsboro, 178 F.3d 231, 242 (4th Cir. 1999); Deasy v. Hill, 833 F.2d 38, 41 (4th Cir. 1987).

Denial of leave to amend 1s justified if there is delay and (1) the amendment would prejudice

the opposing party, (2) the movant has acted in bad faith, or (3) the amendment would be

futile. Laber v. Harvey, 438 F.3d 404, 426 (4th Cir. 2006) (quoting Johnson v. Oroweat Foods

785 F.2d 503, 509 (4th Cir. 1986)). There is no prejudice in permitting Seabrooks to bring

these counterclaims. First, the court notes that discovery has only just started in the case.

Second, the court recognizes that Brown knew or should have known about these potential

counterclaims given that Seabrooks denied negligence in his answer to Brown’s complaint and

filed a separate lawsuit alleging those counterclaims in this district. Further, Seabrooks filed a

lawsuit alleging the same claims in a New York district court in 2018, shortly after the accident.

Brown was on full notice of these counterclaims. Finally, there is no evidence of impermissible

forum shopping here, as both actions were originally brought in federal court. McCaulley v.

Purdue Pharma., L.P., 172 F. Supp. 2d 803, 809 (W.D. Va. 2001) (finding that counterclaims

bringing in a new defendant that destroys diversity might be filed in bad faith to force a remand

to state court). The court finds no evidence of gamesmanship in the failure to file the

counterclaims in the original answer and grants Seabrooks leave to file the counterclaim.

For the forgoing reasons, the court DENIES Brown’s motion to strike the

counterclaims and GRANTS Seabrooks leave to file his compulsory counterclaim.

It is so ORDERED.

19,

Entered: November XK 2020

Michael F. Urbanski

Chief U.S. District Judge

yee-_ 2020.11.19 17:31:31 -05'00'

Michael F. Urbanski

Chief United States District Judge