HENRY J. BOROFF, Bankruptcy Judge.
Before the Court in this dischargeability action is the plaintiff's request to file an amended complaint containing additional factual allegations and new legal theories of relief. Because the deadline for filing objections to the dischargeability of particular debts passed before the proposed amended complaint was filed, the Court must determine whether the amended complaint "relates back" to the date of the original filing and, even if so, whether it would be appropriate to grant leave to amend under the circumstances of this case.
The debtor in this Chapter 7 bankruptcy case,
That original contract suit was settled through mediation, with the parties agreeing that the Upper Crust would make an initial $250,000 payment to ZVI, followed by 36 monthly payments of $11,000 each (the "Settlement Agreement"). The $250,000 payment was to come from Tobins, in settlement of yet another dispute between Tobins and the Upper Crust, the Debtor, and Higgins. According to ZVI, Tobins was obligated under the Settlement Agreement to pay the $250,000 (the "Settlement Funds") to Attorney Franklin Levy (the attorney representing the Upper Crust, the Debtor, and Higgins). Attorney Levy was to hold the Settlement Funds in escrow and ultimately turn them over to ZVI. And ZVI maintains that it would not have executed the Settlement Agreement absent representations made by the Debtor and Higgins that the $250,000 would be paid to ZVI.
On September 28, 2012, Tobins wired the sum of $250,000 to Attorney Levy's law firm (the "Firm"). But those funds were never turned over to ZVI. Instead, the funds were disbursed by the Firm to several different parties, including the Firm itself, the Debtor, the Debtor's father, Higgins, the Upper Crust CEO, and bankruptcy counsel for the Upper Crust.
On October 28, 2013, the deadline for filing a complaint objecting to the Debtor's discharge or the dischargeability of a particular debt, ZVI timely initiated the present adversary proceeding by filing a complaint (the "Original Complaint") objecting to the dischargeability of ZVI's claim against the Debtor. The Original Complaint set forth the facts summarized above — facts which ZVI alleged rendered its claim nondischargeable pursuant to § 523(a)(2) of the Bankruptcy Code on account of the Debtor's "willful misrepresentations and participation in the scheme to convert funds due ZVI."
On January 8, 2014, ZVI filed a motion requesting leave to amend the Original Complaint, although leave of Court was not then required since the motion was filed within 21 days of the Debtor's answer to the Original Complaint.
Many of the changes in the proposed amended complaint (the "Amended Complaint") are largely stylistic. Other more substantive additions, however, have drawn the Debtor's objection (the "Objection"). First, the Amended Complaint contains additional factual allegations. Specifically, the Amended Complaint refers to an affidavit of Attorney Levy and emails sent by Attorney Levy to various persons that were neither referenced in, nor attached to, the Original Complaint.
Through his Objection, the Debtor argues that it is too late for ZVI to raise these additional claims for relief, as the deadline for filing objections to dischargeability under subsections (a)(4) and (a)(6) has long since passed. ZVI, in turn, maintains that the alternative bases for relief requested in the Amended Complaint arise from the originally-plead factual allegations, and thus "relate back" to the timely-filed Original Complaint.
In a case under Chapter 7 of the Bankruptcy Code, a creditor asserting the nondischargeability of a debt under §§ 523(a)(2), (4), or (6) must timely commence an adversary proceeding seeking a declaration of nondischargeability, or the creditor's claim will be discharged. 11 U.S.C. § 523(c)(1); Fed. R. Bankr.P. 4007(c); 7001(6). The deadline for filing that complaint, set by Bankruptcy Rule 4007(c), is 60 days from the first date set for the meeting of creditors required by § 341, unless a motion to extend the time is filed before the deadline has expired (and the court grants an extension). Fed. R. Bankr.P. 4007(c). Here, the Original Complaint was timely filed, but the Amended Complaint was not.
However, while the Debtor is correct that the deadlines for objecting to a debtor's discharge or the dischargeability of a particular claim are "strictly and narrowly construed," Objection 11, Feb. 14, 2014, ECF No. 22, the Bankruptcy Rules which establish those deadlines "operate in conjunction with [Bankruptcy] Rule 7015," Flexi-Van Leasing, Inc. v. Perez (In re Perez), 173 B.R. 284, 290 (Bankr.E.D.N.Y. 1994); see also Saunders Real Estate Corp. v. Pearlman (In re Pearlman), 360 B.R. 19, 21 (Bankr.D.R.I.2006), which incorporates Federal Rule 15.
"Rule 15(c) of the Federal Rules of Civil Procedure governs when an amended pleading `relates back' to the date of a timely filed original pleading and is thus itself timely even though it was filed outside an applicable statute of limitations." Krupski v. Costa Crociere S.p.A., 560 U.S. 538, 541, 130 S.Ct. 2485, 177 L.Ed.2d 48 (2010). Accordingly, if the Amended Complaint "relates back" to the Original Complaint, it too will be deemed timely filed. Rule 15(c) provides that an
"So long as the original and amended petitions state claims that are tied to a common core of operative facts, relation back will be in order." Mayle v. Felix, 545 U.S. 644, 664, 125 S.Ct. 2562, 162 L.Ed.2d 582 (2005). Here, the Amended Complaint is entirely grounded on the same set of core facts that form the basis of the Original Complaint. In both iterations of the complaint, ZVI predicates its claim for nondischargeability on the Debtor's allegedly inducing ZVI to settle its contract claims by promising to turn over the funds received from Tobins while having had no intention to do so. The additional facts and exhibits referenced in the Amended Complaint merely amplify the allegations contained in the Original, and do not attempt to ground the relief sought by ZVI in a different set of circumstances. As such, relation back of the additional factual allegations is warranted. See, e.g., Am. Asset Fin., LLC v. Feldman (In re Feldman), 506 B.R. 222, 232 (Bankr. E.D.Pa.2014); 3-15 Moore's Federal Practice — Civil § 15.19 (LEXIS 2014) ("Amendments that amplify or restate the original pleading or set forth facts with greater specificity should relate back.").
The same holds true with regard to the additional statutory bases for relief asserted in the Amended Complaint. "Relation back depends on the existence of a `common core of operative facts' uniting the original and newly asserted claims." Mayle v. Felix, 545 U.S. at 659, 125 S.Ct. 2562. Thus, an amended pleading may relate back even when it asserts new theories of recovery so long as "a sufficient factual nexus exists between the original and amended complaints such that the original pleadings give fair notice of the factual situations from which the amended pleadings arise." New Century Bank, N.A. v. Carnell (In re Carnell), 424 B.R. 401, 413 (Bankr.N.D.Ill.2010).
While the Amended Complaint clearly relates back to the Original Complaint, the question of whether leave to amend should be granted is a separate issue. Under Rule 15(a), leave of Court is required to amend a pleading (unless the opposing party consents) when the amendment
Newcare Health Corp. v. Midway Health Care Ctr. (In re Newcare Health Corp.), 274 B.R. 307, 311 (Bankr.D.Mass.2002).
Despite the Debtor's protestations to the contrary, justice clearly requires the Court to allow ZVI to amend its complaint at this juncture. The fault for any delay to date in the progress of this adversary proceeding lies not with ZVI, but with the Debtor. The Debtor requested, with ZVI's consent, extensions of time both to answer the Original Complaint and to respond to the Motion to Amend. Moreover, ZVI was entitled to amend its complaint as a matter of course when it initially filed its request to amend; leave of this Court was not then required. Were it not for the Debtor's motion to strike ZVI's unnecessary request to amend, precipitating ZVI's withdrawal of its request and subsequent filing of the amendment beyond the "matter of course" deadline, the question of whether the Court should grant leave to do so under Rule 15(a) would not have arisen. No cognizable prejudice to the Debtor would result from allowing an amendment at this juncture — the Court has yet to even conduct the pre-trial conference. ZVI has not been responsible for any undue delay, and therefore there is no cause to require a more exacting burden for amendment of its Original Complaint. Compare, e.g., Giza v. Amcap Mortgage, Inc. (In re Giza), 441 B.R. 395 (Bankr. D.Mass.2011) (where plaintiffs had all evidence available to assert those claims from the outset of the case, plaintiffs denied leave to amend complaint nearly 13 months after the complaint was originally filed in order to add multiple claims which would bring dismissed parties back into case). Accordingly, leave to amend will be granted.
For all the foregoing reasons, the Motion to Amend will be GRANTED. However, as ZVI has withdrawn one count of the Amended Complaint, see, supra fn. 11, and omitted the exhibits from the proposed Amended Complaint attached to its Motion to Amend, see, supra fn. 8, the Court will order ZVI to file within 7 days a further amended complaint eliminating the withdrawn count and including the referenced exhibits. The Debtor will be ordered to file an answer to that further amended complaint within 21 days thereafter. A pretrial conference will then be scheduled. An order in conformity with this memorandum shall issue forthwith.
11 U.S.C. § 523(a)(2).