M. HANNAH LAUCK, District Judge.
This matter comes before the Court on Plaintiffs Sandra G. Lewis and Wesley S. Lewis's (collectively, the "Plaintiffs") Motion to Amend the Complaint (the "Motion to Amend"), (ECF No. 32.) Defendants Jayco, Inc., Camping World RV Sales, LLC, and Camping World, Inc. (collectively, the "Defendants") responded, (ECF No. 37), and the Plaintiffs replied, (ECF No. 39). This matter is ripe for disposition. The Court dispenses with oral argument because the materials before it adequately present the facts and legal contentions and argument would not aid the decisional process. For the reasons that follow, the Court will grant the Motion to Amend.
This matter arises out of the Plaintiffs' purchase of an allegedly defective motorhome. The Plaintiffs contend that "[p]rior to purchasing the [m]otorhome, the defendants and their agents made oral and written representations to the plaintiffs indicating that the [m]otorhome had been properly inspected prior to delivery and that the [m]otorhome was free from defects." (Aug. 12, 2019 Mem. Op. 2, ECF No. 42.) After several months of hearing "a loud `clunking' noise that was produced after going over any bump on the road," the Plaintiffs took the motorhome to a mechanic for repair. (Id. 2-3.) The mechanic informed the Plaintiffs that the motorhome "was unsafe to drive." (Id. 3.)
The Plaintiffs originally filed their four-count Complaint in the Circuit Court for Albemarle County seeking: (1) recession of the contract; and alleging (2) a violation of the Virginia Consumer Protection Act, Va. Code § 59.1-196; (3) actual fraud; and, (4) a violation of the Magnuson-Moss Act, 15 U.S.C. § 2301(3). (ECF No. 1-1.) The Defendants removed the case to the United States District Court for the Western District of Virginia invoking federal question jurisdiction under 28 U.S.C. § 1331(a)
The Plaintiffs filed the Motion to Amend after participating in an agreed upon "limited discovery ... so Plaintiffs could adequately respond to Defendant Jayco, Inc's Motion to Dismiss." (Mot. Amend ¶ 3, ECF No. 32.) After completing this discovery, the Plaintiffs seek to amend their Complaint to:
(Id. ¶ 9.) The Plaintiffs also seek to remove "all references to former Defendant Jayco-VA, LLC" as the Court has dismissed that Defendant. (Id.)
The Plaintiffs assert that their amendment "incorporates the critical new facts and allegations that could only have been discovered after the initial Complaint had been filed." (Id. ¶ 10.) Many of these allegations pertain to a statement made by a Camping World employee telling Sandra Lewis that "signing the Warranty Registration Form was necessary only because it `is what registers [the Plaintiffs' motorhome] unit with Jayco' for the purposes of obtaining Defendant Jayco, Inc.'s two-year warranty." (Id. ¶ 5 (emphasis in original).) The Warranty Registration Form, however, also stated that the "signee had read and understood Defendant Jayco, Inc's Limited Warranty prior to signing the document, which included having read and understood the forum selection clause presented in the Limited Warranty." (Id. ¶ 6.) The Plaintiffs claim that the employee "did not provide any additional information regarding the importance of the Warranty Registration form and did not provide the Plaintiffs with a copy of the Limited Warranty prior to the signing of the Warranty Registration form." (Id. ¶ 8.) The Plaintiffs assert that they "would not have signed the document but for they relied on the statements of fact made by [the employee] ... that signing the Warranty Form was necessary only to activate the Limited Warranty for the motorhome." (Id. ¶ 7.) The Plaintiffs attach a copy of their Proposed Amended Complaint to the Motion to Amend.
The Defendants responded and opposed the Motion to Amend stating that the "Plaintiffs have not provided good cause under Rule 16(b) for why the Court should grant leave to amend their pleading at this juncture, and the newly asserted allegations in their Proposed Amended Complaint are futile as they fail as a matter of law under a Rule 12(b)(6) standard." (Resp. Mot. Amend. 3, ECF No. 37.) The Defendants contend that the Plaintiffs must show good cause because they filed the Motion to Amend after the time to do so as specified in the Scheduling Order had passed. Alternatively, the Defendants assert that the employee's statement to Sandra Lewis "is not false" and that it "cannot be construed as a material misrepresentation because it was and is true," thus it fails as a matter of law pursuant to Rule 12(b)(6). (Id. 8-9.)
"When a plaintiff seeks to amend [his or] her complaint after the deadline for doing so set in a scheduling order, [he or] she `triggers both Fed. R. Civ. P. 15(a) governing amendments to pleadings and Fed. R. Civ. P. 16(b) governing modification to a scheduling order.'" Weisheit v. Rosenberg & Assocs., LLC, No. JKB-17-0823, 2018 WL 1942196, at *2 (D. Md. Apr. 25, 2018) (quoting Rassoull v. Maximus, Inc., 209 F.R.D. 372, 373 (D. Md. 2002)). "First the Plaintiff `must satisfy the good cause standard of Rule 16(b); if the moving party satisfies Rule 16(b), the movant then must pass the tests for amendment under [Rule] 15(a).'" Id. (quoting Elat v. Ngoubene, 993 F.Supp.2d 497, 519 (D. Md. 2014)).
Federal Rule of Civil Procedure 16(b) governs the scheduling order issued by the presiding court. See Fed. R. Civ. P. 16(b). Rule 16(b)(4) declares that "[a] schedule may be modified only for good cause and with the judge's consent." Fed. R. Civ. P. 16(b)(4). "The `primary consideration of the Rule 16(b) "good cause" standard is the diligence of the movant.'" Weisheit, 2018 WL 1942196 at *3 (quoting Rassoull, 209 F.R.D. at 374).
The Western District of Virginia entered the scheduling order prior to transferring the case here. (ECF No. 12.) In the scheduling order, the Western District of Virginia set May 24, 2019, as the deadline to complete discovery and stated that "[a]ny motion ... to amend the pleading must be filed prior to the cutoff day for discovery." (Scheduling Order 1, 3, ECF No. 12 (emphasis added).)
On May 24, 2019—the cutoff day for discovery and one day after the Scheduling Order required them to do so—the Plaintiffs filed the Motion to Amend. The Plaintiffs assert that they did not file the Motion to Amend sooner because they "sought to wait until the end of the limited discovery process before filing their amendments with the Court out of an awareness that new information could come to light that might change the prudence or content of [the] Plaintiffs' Proposed Amendments." (Reply Mot. Amend ¶ 5.) The Plaintiffs also attached an email, sent on May 23, 2019, one day prior to the close of discovery, in which they sought the Defendants' consent to file the Motion to Amend. (Reply Mot. Amend Ex. 1, ECF No. 39-1.) The Defendants "did not respond" to the Plaintiffs' email. (Reply Mot. Amend ¶ 6.)
The Plaintiffs made an appropriate choice to wait until the end of the limited discovery period to file the Motion to Amend. In doing so, Plaintiffs included in their Proposed Amended Complaint all newly discovered relevant information. Plaintiffs also notified the Defendants of their intent to file the Motion to Amend prior to the deadline set forth in the scheduling order. These actions serve the interest of judicial economy in a fair manner. For these reasons, the Plaintiffs have shown that they acted diligently in filing the Motion to Amend, and that they have established good cause for missing the amendment deadline.
In addition to satisfying Rule 16's good cause standard, Plaintiffs have also shown that they meet the requirements of Rule 15, including that amending the Complaint would not be futile.
Federal Rule of Civil Procedure 15 governs amended and supplemental pleadings. See Fed. R. Civ. P. 15. Rule 15(a)(2) allows a party to "amend its pleading only with the opposing party's written consent or the court's leave." Fed. R. Civ. P. 15(a)(2). That same Rule specifies that "[t]he court should freely give leave when justice so requires." Id. "The law is well settled `that leave to amend a pleading should be denied only when the amendment would be prejudicial to the opposing party, there has been bad faith on the part of the moving party, or the amendment would be futile.'"
The Court may find an attempt to amend a complaint futile when the proposed amended complaint fails to state a claim as required by Rule 12(b)(6). See U.S. ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370, 376 (4th Cir. 2008) ("[A] district court may deny leave if amending the complaint would be futile—that is, `if the proposed amended complaint fails to satisfy the requirements of the federal rules.'" (quoting United States ex rel. Fowler v. Caremark RX, LLC, 496 F.3d 730, 740 (7th Cir. 2009); Laber v. Harvey, 438 F.3d 404, 426, 429 (4th Cir. 2006)). However, "[u]nless a proposed amendment may clearly be seen as futile ... conjecture about the merits of the litigation should not enter into the decision whether to allow amendment." Davis v. Piper Aircraft Corp., 615 F.2d 606, 613 (4th Cir. 1980) (emphasis added).
To determine whether the Proposed Amended Complaint satisfies Rule 12(b)(6), the Court will determine whether it contains sufficient factual information to "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Fed. R. Civ. P. 8(a)(2) ("A pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief.") In making this determination, the Court must assume all well-pleaded factual allegations in the Complaint to be true and determine whether, viewed in the light most favorable to the plaintiff, they "plausibly give rise to an entitlement to relief." Ashcroft v. Iqbal, 556 U.S. 662, 676-79 (2009).
The Plaintiffs' proposed additional allegations plausibly meet each of the requirements of a constructive fraud cause of action. To prove constructive fraud under Virginia law, the Plaintiffs must show "by clear and convincing evidence that a false representation of a material fact was made innocently or negligently, and the injured party was damaged as a result of his reliance upon the misrepresentation." Mortarino v. Consultant Eng'g Servs., Inc., 467 S.E.2d 778, 782 (Va. 1996) (citations omitted). First, Plaintiffs' allegations plausibly plead "a false representation of a material fact." Id. Specifically, they claim that an employee of Camping World told Ms. Lewis that "the Warranty Form `was only used to register [the] new motorhome with Jayco.'"
Second, the Court will presume for the purposes of the Motion to Amend that the employee at least made the statement innocently. See Mortarino, 467 S.E.2d at 782. Finally, the Plaintiffs allege that "[b]ased on [the employee's] ... specific representation that this was the only purpose and use of the Warranty Form, and in reliance that [the employee's] ... representation of the purpose of the Warranty Form was accurate, Ms. Lewis signed the Warranty Form." (Proposed Am. Compl. ¶ 15-B.) Plaintiffs state that if they had known of the additional purposes of the Warranty Form they "would not have purchased the [m]otorhome." (Id. ¶ 40-H.) Based on these allegations, the Plaintiffs seek damages. (See id. ¶ 40-J.) These allegations plausibly show that the Plaintiffs relied on the employee's statement and suffered damages, satisfying the final prongs of the constructive fraud test. See Mortarino, 467 S.E.2d at 782.
Accepting as true all well-pleaded factual allegations, the Plaintiffs have plausibly alleged each of the elements of a constructive fraud cause of action. Because the Plaintiffs' additional allegations satisfy the Rule 12(b)(6) standard, their proposed amendments to the Complaint are not futile and the Plaintiffs meet the requirements of Rule 15.
The Court recognizes that it "should freely give leave [to amend a pleading] when justice so requires." Fed. R. Civ. P. 15(a)(2). Because the Plaintiffs have shown good cause for filing the Motion to Amend one day after the deadline to do so and that the proposed amendment would not be futile, the Court will grant the Motion to Amend. (ECF No. 32.) The Plaintiffs shall file their Amended Complaint within seven (7) days of this Order. The Defendants shall file an answer or responsive pleading to the Amended Complaint in accordance with the Federal Rules of Civil Procedure and the Local Rules for the United States District Court for the Eastern District of Virginia.
An appropriate order shall issue.
(Resp. Mot. Amend 5 (emphasis in original).) In reply, the Plaintiffs aver that although they
(Reply Mot. Amend ¶ 5.) The Plaintiffs, therefore, provide a fitting response to the Defendants' contention that the Plaintiffs should have filed the Motion to Amend prior to the deadline to do so, further supporting the good cause shown for missing the applicable deadline.
Although the Plaintiffs agree that "sophisticated business entities have no obligation to explain every term and condition in a contract to a prospective consumer," they state that they base their claim on the employee's "false statement that the Warranty Registration form
A difference clearly exists between a statement that the Warranty Registration Form only registers the motorhome with Jayco and a statement that the Warranty Registration Form registers the motorhome with Jayco. Specifically, the first statement precludes the Warranty Registration Form from serving any other purpose. The Supreme Court of Virginia has found that such a statement, made by an agent of a company to a lay consumer, can support a constructive fraud cause of action. See generally Nationwide Ins. Co. v. Patterson, 331 S.E.2d 490 (Va. 1985) (finding that an insurance agent's statement that the policy would cover "all additional expenses" rather than "all eligible expenses" could support the trial court's finding of constructive fraud). For this reason, the employee's statement that "the Warranty Form `was only used to register [the] new motorhome with Jayco,'" (Proposed Am. Compl. ¶ 15-B (emphasis in original)), can support the Plaintiff's constructive fraud cause of action.
