United States District Court, E.D. Oklahoma
DAVID RIDLEY OIL, LLC, an Oklahoma Limited Liability Company, Plaintiff,
SILVER CREEK OIL & GAS, LLC, a Delaware Limited Liability Company, Defendant.
OPINION AND ORDER
H. Payne, United States District Judge.
the Court is Defendant David Ridley Oil's opposed Motion
to File Amended Counterclaim (Doc. No. 36). Defendant seeks
to add a counterclaim related to water hauling costs incurred
shortly after the fracking that is the subject of
Plaintiff's claim. For the reasons explained below,
Defendant's Motion is DENIED.
originally filed suit on April 19, 2016, and Defendant filed
its Answer on June 15, 2016. Plaintiff's Complaint
alleges that, beginning on or about May 4, 2014, Defendant
negligently fracked its well, resulting in invasion of
Plaintiff's neighboring wells. The Complaint further
alleges that, “For several months after the fracking
occurred, Defendant continually and routinely removed its
water and fracking fluid from Plaintiff's saltwater
holding tanks and paid to dispose of it.” (Doc. No. 3,
¶ 15). Defendant's Answer (Doc. No. 16) raises
several affirmative defenses but no counterclaims. The
deadline to amend pleadings passed on September 19, 2016.
Discovery on Plaintiff's six claims-negligence, nuisance,
trespass, invasion of correlative rights, unjust enrichment,
and punitive damages-has been proceeding for approximately
one year and is set to close on September 5, 2017, in less
than three months. Trial is set for November 1, 2017.
Defendant filed this motion on May 25, 2017, approximately
six weeks before dispositive motions were due.
seeks to add its counterclaim pursuant to Federal Rule of
Civil Procedure 13(a)(1), which requires a pleading to 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. Defendant argues that, since the
filing of the pleadings in this case, it has learned that it
was not required to haul the allegedly excess water from the
frack for Plaintiff. Therefore, Defendant seeks to add a
counterclaim for compensation from Plaintiff for the cost it
incurred on Plaintiff's behalf. (See Doc. No.
36-1 (Defendant's Proposed Counterclaim)). Plaintiff
opposes Defendant's proposed amendment (Doc. No. 39).
amendment to add a counterclaim under Rule 13 is subject to
Rule 15, which governs amendments to pleadings generally.
See Advisory Committee Notes to 2009 Amendment to
Fed.R.Civ.P. 13; Fed.R.Civ.P. 15. Under Rule 15(a),
“[e]xcept when an amendment is pleaded ‘as a
matter of course, ' as defined by the rule, ‘a
party may amend its pleading only with the opposing
party's written consent or the court's
leave.'” Bylin v. Billings, 568 F.3d 1224,
1229 (10th Cir. 2009) (quoting Fed.R.Civ.P. 15(a)).
“The rule instructs courts to ‘freely give leave
when justice so requires.'” Id. (quoting
Fed.R.Civ.P. 15(a)(2)). The Rule's purpose “is to
provide litigants the maximum opportunity for each claim to
be decided on its merits rather than on procedural
niceties.” Minter v. Prime Equip. Co, 451 F.3d
1196, 1204 (10th Cir. 2006) (quotation omitted). Therefore,
“[r]efusing leave to amend is generally only justified
upon a showing of undue delay, undue prejudice to the
opposing party, bad faith or dilatory motive, failure to cure
deficiencies by amendments previously allowed, or futility of
amendment.” Frank v. U.S. West, Inc., 3 F.3d
1357, 1365 (10th Cir. 1993) (citation omitted). Untimeliness
alone may be a sufficient ground to deny leave to amend,
“especially when the party filing the motion has no
adequate explanation for the delay.” Id. at
1365-66. Further, “[w]here the party seeking amendment
knows or should have known of the facts upon which the
proposed amendment is based but fails to include them in the
original complaint, the motion to amend is subject to
denial.” Id. at 1366. The decision whether a
party may file a supplemented pleading to assert a
counterclaim out of time rests within the discretion of the
trial court. See Gillihan v. Shillinger, 872 F.2d
935, 941 (10th Cir. 1989), overruled on other grounds by
Clark v. Wilson, 625 F.3d 686, 691 (10th Cir. 2010).
argues the proposed amendment should be denied, because it is
futile and would unduly prejudice Plaintiff. After
consideration of the arguments, the Court concludes
Defendant's proposed amendment would be subject to
dismissal and therefore futile. The Court further concludes
Defendant has engaged in undue delay in attempting to raise
court properly may deny a motion for leave to amend as futile
when the proposed amended complaint would be subject to
dismissal for any reason.” Bauchman for Bauchman v.
W. High Sch., 132 F.3d 542, 562 (10th Cir. 1997). To
withstand dismissal, a complaint must contain enough
allegations of fact, taken as true, “to state a claim
to relief that is plausible on its face.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).
“A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged. Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (citing Twombly, 550 U.S. at 556). The
Tenth Circuit has stated that “plausibility” in
this context refers “to the scope of the allegations in
the complaint: if they are so general that they encompass a
wide swath of conduct, much of it innocent, then the
plaintiffs ‘have not nudged their claims across the
line from conceivable to plausible.'” Robbins
v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008)
(quoting Twombly, 550 U.S. at 569). The plaintiff
bears the burden to frame “a complaint with enough
factual matter (taken as true) to suggest” that he or
she is entitled to relief. Twombly, 550 U.S. at 556.
“A pleading that offers ‘labels and
conclusions' or a formulaic recitation of the elements of
a cause of action will not do.' Nor does a complaint
suffice if it tenders ‘naked assertion[s]' devoid
of further factual enhancement.'” Iqbal,
556 U.S. at 678 (quoting Twombly, 550 U.S. at 555,
Defendant's proposed counterclaim must fail because the
proposed counterclaim provides no allegations that outline
the legal basis for its counterclaim. According to the
proposed counterclaim, “Defendant agreed to pay to have
allegedly excess water from the frac hauled away for
Plaintiff” after the frac which is the subject of
Plaintiff's claim. (Doc. No. 36-1, ¶ 1). Although
Defendant's Reply brief identifies an affidavit signed by
David Ridley on August 11, 2014 (the “Ridley
Affidavit”) as the factual basis for the claim, neither
Defendant's Motion to Amend nor its Reply attempts to
explain the legal basis for filing an amended answer. It is
entirely unclear from the proposed amendment whether the
claim sounds in tort or contract. Defendant's proposed
counterclaim alleges no wrongdoing whatsoever by Plaintiff.
Instead, Defendant alleges it “agreed to pay” to
have excess water hauled away for Plaintiff and then later
learned it “was not required” to do so and seeks
compensation for those costs. (Doc. No. 36-1).
Defendant's complete failure to state the legal basis for
its claim would subject the claim to dismissal. It is
therefore futile. Because Defendant's proposed amendment
would be futile, Defendant's Motion to Amend
Counter-Claim is denied.
Defendant were to provide a legal basis for its proposed
counterclaim, the Court would still deny Defendant's
proposed counterclaim based on its undue delay in raising the
claim and the resulting prejudice to Plaintiff in delaying
the resolution of this case. In its Reply brief, Defendant
attempts to explain that it acted diligently upon discovery
of documents demonstrating it was not required to haul water
for Plaintiff. In particular, Defendant points to the Ridley
Affidavit, in which Ridley states that “by August 11,
2014, his water production was reduced to 200 barrels per
day, down from 400 barrels per day.” (Doc. No. 43, at
2). Based on this evidence, Defendant argues that
Plaintiff's claim of excess water production was either
incorrect or overstated.
states it made the request to amend “as soon as it was
practicable” after reviewing the “voluminous
number of documents” in this case. (Doc. No. 43, at 2).
However, Plaintiff counters in its Surreply brief that the
Ridley Affidavit was produced as part of discovery in this
case on August 31, 2016, nearly nine months prior to
Defendant's filing of this motion. (See Doc. No.
47-7 (Ridley Affidavit); Doc. No. 47-8 (Plaintiff's
Response to Defendant's First Set of Interrogatories and
Requests for Production of Documents)). Plaintiff further
indicates that the August 31, 2016, production of the Ridley
Affidavit was the fourth time the Ridley Affidavit
was made available to Defendant. The Ridley Affidavit was
previously produced or presented to Defendant in two causes
before the Oklahoma Corporation Commission on August 22,
2014; May 6, 2016; and August 12, 2016. (See Doc.
Nos. 47-1 to 47-6). Defendant has no explanation for the
lengthy delay. Therefore, it is apparent that Defendant did
not act diligently to pursue its claim based on evidence that
has been available to it for more than two years. Permitting
Defendant's proposed counterclaim at this late stage of
this case would require an extension of all deadlines and
delay of the trial date, which is prejudicial to Plaintiff.
reasons detailed above, Defendant's Motion to File