FINDINGS AND RECOMMENDATION

JOHN V. ACOSTA, Magistrate Judge.

Introduction

Plaintiff Premier Automation Contractors, Inc. ("Premier") brings this lawsuit against Defendant Everest National Insurance Company ("Everest"), alleging Everest refused to honor the terms of a workers' compensation insurance policy after the work-related death of a Premier employee in the State of Oregon. Before the court is Premier's Second Motion for Leave to Amend Complaint ("Motion"). (ECF No. 25.) For the following reasons, Premier's Motion should be GRANTED.

Background

This court previously set forth the facts of this case in some detail, and thus recounts only a brief summary of the factual and procedural history relevant to the instant Motion. (See Findings and Recommendation, dated October 23, 2019, ECF No. 23, at 2-4.) From November 3, 2017 to November 3, 2018, Premier's Policy (the "Policy") provided primary coverage in five states, and included a provision that enabled Premier to extend coverage to additional states if necessary, including the State of Oregon. (Notice of Removal, ECF No. 1, Ex. A ("Compl."), ¶¶ 6-10.) In mid-September 2018, Premier notified Everest's agent that it intended to send workers to Oregon, resulting in the filing of a "Certificate of Liability Insurance" with the State as proof of workers' compensation insurance coverage in Oregon. (Compl. ¶¶ 11, 12.) Following the death of a Premier employee at a job site in Oregon, Everest denied coverage had been extended under the Policy to work performed in Oregon. (Id. ¶ 13.)

On January 2, 2019, Premier filed this lawsuit against Everest in state court, seeking a declaratory judgment that Everest breached its contract with Premier and that coverage extended to Oregon during the disputed time period, or, in the alternative, coverage by estoppel. Everest timely removed the case to federal court. On April 17, 2019, Premier moved to amend its Complaint to join an indispensable party with non-diverse citizenship. (ECF No. 11.) While the motion was pending, Premier filed a second motion on July 23, 2019, requesting to indefinitely stay this case until resolution of related state administrative proceedings. (ECF No. 17.) On October 17, 2019, this court denied the stay. (ECF No. 22.) Less than a week later, on October 23, 2019, this court issued a Findings and Recommendation ("F&R") recommending denial of Premier's motion to amend because joinder would unnecessarily destroy diversity and strip the court of jurisdiction. (ECF No. 23.) On November 13, 2019, Premier filed the instant Motion, again seeking leave to amend, but for the purposes of clarifying its original claims and defenses. (Pl.'s Mot. for Leave to Amend Compl., ECF No. 25 ("Mot."), at 2.) Everest opposes the Motion. (Resp. in Opp'n to Second Mot. for Leave to File Am. Compl./Pet., ECF No. 28 ("Def.'s Opp'n").) Premier's Motion comes after the court-ordered deadline to amend the pleadings expired on August 31, 2019. (ECF No. 9.)

Legal Standard

A party seeking to amend the pleadings after the court-ordered deadline for amendment has passed must first show good cause to modify the court's scheduling order. See AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946, 952 (9th Cir. 2006); FED.R.CIV.P. 16(b)(4). The "good cause" inquiry is primarily concerned with the diligence of the party seeking modification. Schultz v. Wal-Mart Stores, Inc., 68 Fed. App'x 130, 132 (9th Cir. 2003). If an imposed deadline "cannot reasonably be met despite the diligence of the party seeking extension," modification of the scheduling order is justified. Johnson, 975 F.2d at 609 (citing Rule 16 advisory committee's notes to 1983 amendment). If good cause is shown and the scheduling order modified, the party seeking amendment must then show that amendment is proper under Rule 15(a).

Federal Rule of Civil Procedure ("Rule") 15 directs that leave to amend should be freely given "when justice so requires." FED.R.CIV.P. 15(a)(2). Rule 15 is to be applied with "extreme liberality," but a motion to amend is not automatically granted. Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990). The court may deny a motion to amend if (1) amendment would prejudice the opposing party, (2) the motion was made in bad faith, (3) it would cause undue delay, or (4) the proposed amendment is futile for lack of merit. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987). Futility alone justifies denial, but "`only if no set of facts can be proved under the amendment to the pleadings that would constitute a valid claim or defense.'" Barahona v. Union Pacific R.R. Co., 881 F.3d 1122, 1134 (9th Cir. 2018) (quoting Sweaney v. Ada Cty, 119 F.3d 1385, 1393 (9th Cir. 1997)); Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995). That is, futility is evaluated under the same standard used for a Rule 12(b)(6) motion to dismiss. Fulton v. Advantage Sales & Marketing, LLC, No. 3:11-cv-01050-MO, 2012 WL 5182805 at *2 (D. Or. Oct. 18, 2012). To survive a Rule 12(b)(6) motion to dismiss, the plaintiff is required to show that they have a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A plausible claim has "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

Discussion

I. Proposed Amendments

Premier's proposed amendments do not add new parties, claims or defenses. Instead, the Amended Complaint "simply restates with significantly more clarity the legal and factual issues before the court." (Mot., at 5.) In addition to setting forth the existing factual allegations with more specificity, the proposed amendments describe the relationship between Premier and Everest, and Everest's history of extending Premier's coverage to additional states based on payroll audits conducted at the end of every fiscal quarter. (Proposed Am. Compl., ECF No. 25-1 ("Am. Compl."), ¶¶ 14, 15.) The proposed amendments also include allegations that, on April 29, 2019, Everest completed a payroll audit and retroactively amended the Policy to include Oregon as a covered state during the disputed time period. (Am. Compl. ¶ 16.) This information was allegedly filed with the State of Oregon on May 3, 2019. (Id. ¶ 17.) Everest later sought to "cancel" the Policy and to remove Oregon as a covered state. (Id. ¶ 18.) Everest's attempt to withdraw changes to the Policy reflecting coverage in the State of Oregon allegedly occurred June 20, 2019, over five months after Premier filed this lawsuit.

II. Good Cause Under Rule 16

Premier's Motion was filed after the court-ordered deadline to amend the pleadings expired on August 31, 2019. Premier argues good cause exists to modify the scheduling order because its amendments are largely based on information acquired after filing its first motion to amend. (Mot., at 4.) Specifically, Premier alleges Everest voluntarily amended the Policy to provide coverage in Oregon during the disputed coverage period in May 2019, while the first motion to amend was pending before this court. Premier thus claims Everest "admitted to numerous parties that it provided insurance coverage to [Premier]," and that it is "critical" the admission be included in the Complaint. Additionally, Premier points to its diligence in seeking to timely amend its complaint.

Premier has shown good cause to amend the scheduling order. Though the critical facts it seeks to include in its Complaint occurred prior to the court-ordered deadline, Premier's previous motions, including a motion to amend, were pending before this court. Those motions were not resolved until after the deadline had expired, and Premier immediately sought to confer with Everest about amending the Complaint upon learning its previous motions were denied, and it filed the instant Motion shortly thereafter. Indeed, the F&R concerning its first motion to amend is still pending before a District Judge. Premier thus has shown the necessary diligence to meet the "good cause" standard, and modification of the scheduling order is warranted.

III. Amendment Under Rule 15

Though Premier has demonstrated good cause to modify the court's scheduling order, it must demonstrate amendment is proper under Rule 15. The court is satisfied that amendment is not sought in bad faith, will not prejudice Everest, and will not cause undue delay. Everest, however, alleges the proposed amendments are futile. Specifically, Everest challenges Premier's reliance on newly discovered information, arguing it cannot demonstrate it relied on the new information before sending workers to Oregon. (Def.'s Opp'n, at 8.) By doing so, Everest argues, Premier attempts to expand the scope of its insurance policy through estoppel, which is not permitted under Oregon law. (Id. at 6.)

Estoppel may preclude a person, "by his act or conduct, or silence when it is his duty to speak, from asserting a right to which he otherwise would have had." Day v. Advanced M&D Sales, 336 Or. 511, 518, 86 P.3d 678 (2004) (quoting Marshall v. Wilson, 175 Or. 506, 518, 154 P.2d 547 (1944)). Equitable estoppel is applicable when the following elements are met:

Day, 336 Or. at 518-19 (internal quotation marks omitted).

Contrary to Everest's assertions, Premier does not attempt to estop Everest from denying the expanded coverage allegedly added to the Policy in May 2019. Rather, the foundation of Premier's estoppel claim is the long-standing relationship between the parties and Everest's history of expanding coverage under the Policy based on quarterly audits of Premier's payroll records. Premier thus alleges it relied on Everest's past conduct, i.e., Everest's willingness to expand coverage under the Policy based on the notice provided by its quarterly audits, which was established years before Premier sent its workers to Oregon. (See Am. Compl. ¶ 10; Ex. A.) Premier therefore seeks to estop Everest from now denying that the necessary notice is provided through the payroll audits to expand coverage under the Policy. The amendments sought by Premier adequately set forth those facts, and adequately plead the elements of estoppel.

Everest also alleges the proposed Amended Complaint fails to plead damages for Premier's breach of contract claim. However, as Premier correctly points out, it seeks only a declaratory judgment, and thus allegations pertaining to damages are not necessary.

The court concludes the Amended Complaint Premier proposes presents sufficient facts to overcome a motion to dismiss, and therefore, the proposed amendments are not futile. Leave to amend thus should be freely given, and accordingly, Premier's Motion should be GRANTED.

Conclusion

For the reasons stated above, Premier's Second Motion to Amend (ECF No. 25) should be GRANTED.

Scheduling Order

The Findings and Recommendation will be referred to a district judge. Objections, if any, are due December 20, 2019. If no objections are filed, then the Findings and Recommendation will go under advisement on that date.

If objections are filed, then a response is due within 14 days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendation will go under advisement.