Subrogation Division, Inc. v. Brown

          ORDER GRANTING PLAINTIFF'S MOTION TO AMEND (DOC. 18) AND DENYING DEFENDANT'S MOTION TO DROP OR SUBSTITUTE PARTY (DOC. 20)

          DANETA WOLLMANN United States Magistrate Judge

         This is an action seeking declaratory relief which arose out of a motor vehicle accident. Plaintiff Subrogation Division, Inc. filed a Motion to Amend (Doc. 18), requesting leave to file a Second Amended Complaint adding a second defendant. Defendant Stanley Brown filed a Motion to Drop or Substitute Party (Doc. 20), requesting that he be dropped as a party to the lawsuit. United States District Court Judge Jeffrey L. Viken, Chief Judge, referred Dockets 18 and 20 to this magistrate judge for determination. (Doc. 27).

         FACTUAL BACKGROUND

         Plaintiff's Amended Complaint alleges the following facts. (Doc. 5). In May 2013, Defendant Stanley Brown rented a vehicle from Hertz in Rapid City, South Dakota. Brown entered into a rental agreement in which he chose not to purchase Hertz's liability insurance supplement; Brown was separately insured through 21st Century North America Insurance Company (“21st Century”).

         During the term of his rental, Brown was involved in a motor vehicle accident in Rapid City with a third party, Dan Claymore. 21st Century reimbursed Hertz for property damage to the rental car. Hertz's insurance carrier reimbursed Claymore for property damage to his personal vehicle. Plaintiff Subrogation Division, Inc. (“SDI”), as Hertz's assignee, sought recovery from Brown for reimbursement of the amount paid to Claymore. Brown did not reimburse SDI, leading to this lawsuit.

         DISCUSSION

         SDI seeks to file a Second Amended Complaint, which adds 21st Century as a defendant and asks the Court to determine that 21st Century is the primary insurer in this dispute. (Doc. 18). Brown requests that he be dropped from the lawsuit or, in the alternative, that 21st Century replace him as the defendant in this case. (Doc. 20).

         I. SDI's Motion to Amend

         Federal Rule of Civil Procedure 15 requires that “leave to amend a complaint ‘shall be freely given when justice so requires, ' but the granting of such a motion is left to the discretion of the district court.” Kaufmann v. Sheehan, 707 F.2d 355, 357 (8th Cir. 1983) (quoting Fed.R.Civ.P. 15(a)). “[A]bsent a good reason for denial-undue delay, bad faith or dilatory motive, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the non-moving party, or futility of amendment-leave to amend should be granted.” Thompson-El v. Jones, 876 F.2d 66, 67 (8th Cir. 1989). for amended pleadings under FRCP 16(b), ” and the motion to amend is filed past that deadline. Kozlov v. Assoc. Wholesale Grocers, Inc., 818 F.3d 380, 395 (8th Cir. 2016) (internal quotations omitted).

         Rule 15's liberal policy favoring amendments applies here. The Court's scheduling order allowed the parties until July 31, 2017, to move to join additional parties and to amend the pleadings. (Doc. 15). SDI filed its Motion to Amend on June 30, 2017. The parties subsequently filed a Joint Motion to Extend Deadlines (Doc. 28); the Court granted that motion, and vacated all discovery and motions deadlines pending resolution of Dockets 18 and 20. (Doc. 29). Therefore, the exception to Rule 15(a) articulated in Kozlov does not apply. 818 F.3d at 395.

         Additionally, no good reason for denial exists. See Thompson-El, 876 F.2d at 67. In his response, Brown does not oppose SDI's Motion to Amend, and does not allege any undue delay, bad faith, failure to cure previous deficiencies, undue prejudice, or futility. (Doc. 21 at p. 2). Rather, Brown asks for relief as stated in his Motion to Drop or Substitute Party. Because the Court finds no good reason for denial, leave to amend the complaint “shall be freely given[.]” Fed.R.Civ.P. 15(a). For these reasons, SDI's Motion to Amend (Doc. 18) is granted.

         II. Brown's Motion to Drop or Substitute Party

         In his Motion to Drop or Substitute Party under Federal Rule of Civil Procedure 21, Brown argues that the “clear purpose of this action is to coverage for property damage of a third party and not to determine any possible liability of Brown.” (Doc. 21 at p. 2). Therefore, “[l]eaving Brown as a defendant in this case would serve no useful purpose.” (Id.). Brown urges the Court to drop him as a party or, in the alternative, substitute 21st Century as the defendant in this action. (Id. at p. 3). SDI opposes Brown's motion.

         Brown brings his motion under Federal Rule of Civil Procedure 21. Rule 21, entitled Misjoinder and Nonjoinder of Parties, states: “Misjoinder of parties is not a ground for dismissing an action. On motion or on its own, the court may at any time, on just terms, add or drop a party. The court may also sever any claim against a party.” Fed.R.Civ.P. 21. “Rule 21 of the Federal Rules of Civil Procedure is the proper vehicle for dismissing parties who were improperly joined-either because they fail to satisfy any of the conditions of permissive joinder under Fed.R.Civ.P. 20(a) or because no relief is demanded from [them, ] or no claim of relief is stated against [them].” Moubry v. Kreb, 58 F.Supp.2d 1041, 1047 (D. Minn. 1999) (quoting Vakharia v. ...