United States District Court, D. Maryland
K. Bredar Chief Judge.
a subrogation matter arising from a residential fire.
Plaintiff AIG Property Casualty Company insured the residence
and, pursuant to the terms of its insurance policy, paid the
estate of the insured homeowners over $19 million for real
and personal property damage. Following investigations into
the fire, AIG sued Defendant Eaton Corporation in Anne
Arundel County Circuit Court. Eaton removed the case to this
Court. At present, AIG moves for leave to amend the
complaint, and Eaton opposes the amendment. The motions have
been fully briefed, and no. hearing is required. See
Local Rule 105.6 (D. Md. 2018). For the reasons set forth
below, the Court will deny AIG's motion for leave to
amend the complaint.
fire occurred in the early hours of January 19, 2015. (Am.
Compl. ¶ 10, ECF No. 25-1.) It spread rapidly,
destroying the house and, tragically, killing its six
occupants-the two homeowners and four of their grandchildren.
(Id.) This case is limited to payments for the
combined federal and local investigation found that the fire
started near a Christmas tree. (Id. ¶ 11.)
Approximately twenty private entities, including AIG,
continued investigating the fire. (AIG Status Report, ECF No.
18.) The private investigation included two additional weeks
of excavation at the end of which AIG asserted that the cause
of the fire was a specific, defective product. (Id.)
On January 10, 2018, AIG sued Eaton for strict liability,
alleging that "the fire started at a relocatable power
tap ('RPT') which was used to power the lights of the
Christmas tree." (Compl. ¶ 11, ECF No. 1-2.) In
that initial complaint, AIG alleged that Eaton manufactured
and sold the RPT. (Id. ¶ 12.) Because Eaton
contended that it neither manufactured nor sold the RPT,
(see AIG Status Report), this Court granted the
parties' consent motion to engage in a period of limited
discovery to resolve the "product identification
issue." (Consent Mot., ECF No. 19; Order, ECF No. 20.)
result of AIG's discovery findings, AIG seeks to change
the product that is the basis of the strict liability claim.
AIG now alleges that "the fire started at a plug for
what [AIG] originally believed was a relocatable power
tap" but what investigation revealed was "a
polarized super plug ('PSP') model 2600." (Am.
Compl. ¶ 11-12.) The "plug," newly referenced
in the proposed amended complaint, is a small metal plug
blade bearing an "Eagle" logo. (Mot. to Amend Mem.
at 2, ECF No. 25-3.) AIG alleges that the PSP was
manufactured and sold by Eaton's predecessor, Eagle
Electric Manufacturing. (Am. Compl. ¶ 13.) In essence,
AIG replaces RPT with PSP throughout the proposed amended
clarity, the Court will refer to the RPT as the power strip
and the PSP as the super plug. Therefore, the initial
complaint involved the power strip claim and the proposed
amended complaint would involve the super plug claim.
moves for leave to amend. In its motion, AIG explains that,
at the time it filed suit, it believed the plug blade was
part of the power strip. After the limited discovery period,
Eaton's responses convinced AIG that the plug blade did
not belong to the power strip but, rather, to the super plug.
According to AIG, it seeks to amend to "properly
identify the product at issue." (Mot. to Amend Mem. at
3.) AIG's explanation, however, does nothing to clarify
how the plug blade caused the fire and, thus, is the
"product at issue."
to Federal Rule of Civil Procedure 15(a)(2), the Court should
"freely give" a party leave to amend its pleadings
"when justice so requires." See Jones v. Ceres
Terminal, Inc., Civ. No. JKB-14-1889, 2014 WL 5088281,
at *2 (D. Md. Oct. 8, 2014) ("Whether to permit the
Plaintiff to file an amended complaint is a question that
falls within the Court's discretion..., ").
"This directive gives effect to the federal policy in
favor of resolving cases on the merits instead of disposing
of them on technicalities." Mayfield v. Nat'l
Ass'n for Stock Car Auto. Racing, Inc., 674 F.3d
369, 379 (4th Cir. 2012). Consequently, "leave to amend
a complaint 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." Edell & Assocs., P.C. v. Law Offices of
Peter G. Angelos, 264 F.3d 424, 446 (4th Cir. 2001).
Eaton raises futility.
may deny leave to amend as futile if the proposed amended
complaint would not survive a motion to dismiss for failure
to state a claim. United States ex rel. Wilson v. Kellogg
Brown & Root, Inc., 525 F.3d 370, 376 (4th Cir.
2008); see Ross v. Cecil Cty. Dep't of Soc.
Servs., Civ. No. WDQ-11-181, 2012 WL 346625, at *2 (D.
Md. Jan. 31, 2012) (analyzing futility under Rule 12(b)).
But, leave to amend should only be denied as futile when the
proposed amended complaint is clearly insufficient on its
face. Johnson v. Oroweat Foods Co., 785 F.2d 503,
510 (4th Cir. 1986). Eaton argues that amending would be
futile because AIG's super plug claim is (1) implausible
and (2) barred by the statute of limitation. Eaton prevails
on either ground.
Failure to State a Claim
Court turns first to plausibility. "The standard for
futility [for failure to state a claim] is the same as for a
motion to dismiss under Rule 12(b)(6)." Bilghtwell
v. Hershberger, Civ. No. DKC-11-3278, 2015 WL 5315757,
at *4-5 (D. Md. Sept. 10, 2015). These parallel standards
require a complaint-or a proposed amended complaint-to
contain "sufficient factual matter, accepted as true, to
'state a claim to relief that is plausible on its
face.'" Ashcroft v. Iqbal,556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). The Court will ...