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Stanley Filter Co., LLC v. Wingmaster Sales, LLC

United States District Court, N.D. Oklahoma

December 13, 2017

STANLEY FILTER CO., LLC, Plaintiff,
v.
WINGMASTER SALES, LLC, Defendant.

          OPINION AND ORDER

          CLAIRE V. EAGAN, UNITED STATES DISTRICT JUDGE.

         Before the Court is plaintiff Stanley Filter Co., LLC's, motion for leave to file a first amended complaint (Dkt. # 40). Plaintiff seeks leave to amend its complaint in order to “add [defendant's] principal, Richard Schlabach, on theory of personal liability for all counts.” Id. at 1.

         I. Background

         Plaintiff is a limited liability company organized and existing under the laws of Oklahoma. Dkt. # 2, at 1. Defendant is a limited liability company organized and existing under the laws of New Mexico. Dkt. # 40, at 3. Plaintiff sells “downhole sand filters and oilfield services” and owns several trademarks it utilizes in its business. Dkt. # 2, at 3-5. For the last twenty or twenty-five years, pursuant to a distributor sales agency agreement (the agreement), defendant distributed plaintiff's filtration products exclusively in the New Mexico and north Texas markets. Dkt. # 24-2, at 2.[1]During this time, defendant routinely purchased plaintiff's products. Dkt. # 26-1, at 1. Plaintiff took defendant's orders in its home office and shipped them from its warehouse, both of which were (and still are) in Tulsa, Oklahoma. Id. at 1-2. In addition, defendant's representatives met with plaintiff's representatives in Tulsa at least “two or three times, ” including when one of defendant's representatives attended a two-day seminar that plaintiff hosted. Dkt. # 24-1, at 2.

         According to plaintiff, defendant “terminated the agreement” in 2016. Dkt. # 26-1, at 2. In an earlier filing, defendant acknowledged that the parties' “business relationship” has been “terminated.” Dkt. # 28, at 5. In responding to the Court's order to produce a copy of the agreement, however, affiant Richard Schlabach-sole member of defendant-states that the “agreement . . . was never terminated.” Dkt. # 36-1, at 2. In addition, he states,

I remember an oral agreement with Jerry Dobbs, [plaintiff's] original sales manager, going back to 1990 in which I covered the four producing counties of the far Southeast corner of New Mexico and a region in West Texas North of the Midland-Odessa area.
On two occasions after Jerry Dobbs left [plaintiff] I was approached by Howard Kennedy, the sales manager who replaced him, and we agreed that my sales area would be expanded to cover all of New Mexico and Texas.

Id. at 1-2. According to John Morton, president of plaintiff, “[defendant] through its principal, Rick Schlabach, was an authorized sales distributor for [plaintiff] when I started working at [plaintiff] ¶ 1995.” Dkt. # 34-1, at 1.

         On April 6, 2017, plaintiff filed this lawsuit, alleging that defendant is promoting, advertising, distributing, selling, or offering for sale, counterfeit goods that infringe on plaintiff's trademarks. Dkt. # 2, at 6. In its complaint, plaintiff brings claims for trademark counterfeiting and infringement pursuant to the Lanham Act, 15 U.S.C. § 1051 et seq., false designation of origin and unfair competition pursuant to the Lanham Act, common law unfair competition, common law trademark infringement, breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. Id. at 8-15. Defendant was served on April 24, 2017 via personal service. Dkt. # 7; Dkt. # 8. On June 16, 2017, plaintiff filed a motion for entry of default, which the Court Clerk granted. Dkt. # 10; Dkt. # 12. On August 24, 2017, defendant moved to set aside the Court Clerk's entry of default, and the Court granted defendant's motion. Dkt. # 19; Dkt. # 22. On September 7, 2017, defendant filed a motion to dismiss plaintiff's complaint (Dkt. # 24), which the Court denied. Dkt. # 37. Pursuant to the Court's scheduling order, the discovery deadline is February 20, 2018, and dispositive motions are due by March 26, 2018. Dkt. # 30.

         Plaintiff now moves for leave to file a first amended complaint to “add [defendant's] principal, Richard Schlabach, on theory of personal liability for all counts.” Dkt. # 40, at 1. Defendant has filed a response opposing this motion. Dkt. # 44.[2]

         II. Standard of Review

         Under Fed.R.Civ.P. 15(a)(2), after the opposing party has served a responsive pleading, “a party may amend its pleadings only with the opposing party's written consent or the court's leave.” Minter v. Prime Equipment Co., 451 F.3d 1196, 1204 (10th Cir. 2006). The decision to grant leave to amend is within the discretion of the district court but, when leave is sought, it should be “freely given when justice so requires.” Bradley v. Val-Majias, 379 F.3d 892, 900-91 (10th Cir. 2004). Leave to amend may be denied if the proposed amendment would be futile and would not survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6). Jefferson County Sch. Dist. No. R-1 v. Moody's Investor's Services, Inc., 175 F.3d 848, 859 (10th Cir. 1999). Denial of a motion to amend may also be appropriate if the moving party unduly delayed in seeking leave to amend and has no adequate explanation for the delay. Minter, 451 F.3d at 1206. “In the Tenth Circuit, untimeliness alone is an adequate reason to refuse leave to amend.” Duncan v. Manager, Dept' of Safety, City and County of Denver, 397 F.3d 1300, 1315 (10th Cir. 2005).

         III. Plaintiff's Motion to Amend

         Plaintiff seeks leave to amend to “add [defendant's] principal, Richard Schlabach, on theory of personal liability for all counts.” Dkt. # 40, at 1. Plaintiff argues that the Court should grant it leave to file its proposed amended complaint because (1) defendant will suffer no prejudice, as it has “yet to file its answer, [and] discovery has not yet commenced;” (2) “the proposed amendment is not futile because [plaintiff] in its proposed Amended Complaint, pleads facts sufficient to state a claim against Schlabach individually for vicarious liability for trademark infringement;”[3] (3) “courts routinely exercise of [sic] personal jurisdiction over corporate ...


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