United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON DEFENDANTS' MOTION FOR
LEAVE TO FILE SECOND AMENDED COUNTERCLAIMS
Dennis Saylor, IV United States District Judge
an action for breach of contract. Plaintiff Forward Financing
LLC alleges that defendants Maxx Powersport LLC and Robert
Landis, the sole member of Maxx Powersport, breached a
“Future Receipt Sales Agreement” (the
“Agreement”) executed by the parties on October
5, 2016, and attached to the complaint as Exhibit A.
their answer, defendants assert counterclaims on behalf of
themselves and a potential class of similarly situated
merchants who had signed similar agreements with Forward
Financing. Defendants allege that the Agreement is not a
sales agreement, but in fact a usurious loan that is
Powersport seeks leave to file second amended counterclaims.
Because this litigation is in its early stages and leave to
amend should be freely given, defendant's motion will be
Financing LLC filed a complaint on May 2, 2017, against Maxx
Powersport LLC and Robert Landis alleging breach of contract.
On August 9, Maxx Powersport filed an answer and two
class-action counterclaims: one for violation of Mass. Gen.
Laws ch. 93A, §§ 2 and 11 (unfair trade practices),
and one for violation of Mass. Gen. Laws ch. 271, § 49
(criminal usury). On August 28, before Forward Financing
answered the counterclaims, Maxx Powersport filed amended
counterclaims. The amended counterclaims asserted the same
two causes of action but specified the alleged classes and
their commonality more precisely.
September 18, Forward Financing filed a motion to dismiss the
counterclaims. Maxx Powersport filed an opposition on October
10, and Forward Financing filed a reply on October 17. The
Court held a hearing on October 19 and took the matter under
November 3, Maxx Powersport filed the present motion for
leave to file second amended counterclaims. The proposed
amendment does not add any new counts, but rather alleges a
substantial number of new facts, alleged to have been
recently discovered by counsel and related to the arguments
advanced by the parties in the motion-to-dismiss papers.
Standard of Review
of the Federal Rules of Civil Procedure addresses amendments
to pleadings. Under Rule 15(a), a party may amend a
“pleading” without leave of court in certain
relatively narrow circumstances. “In all other cases, a
party may amend its pleadings only with the opposing
party's written consent or the court's leave. The
court should freely give leave when justice so
requires.” Fed.R.Civ.P. 15(a)(2). “In the absence
of any apparent or declared reason-such as undue delay, bad
faith or dilatory motive on the part of the movant, repeated
failure to cure deficiencies by amendments previously
allowed, undue prejudice to the opposing party by virtue of
allowance of the amendment, futility of amendment, etc.-the
leave sought should, as the rules require, be ‘freely
given.'” Foman v. Davis, 371 U.S. 178, 182
(1962). In determining whether to grant a motion to amend,
the court must examine the totality of the circumstances and
“exercise its informed discretion in constructing a
balance of pertinent considerations.” Palmer v.
Champion Mortg., 465 F.3d 24, 30-31 (1st Cir. 2006).
request leave to amend to include (1) factual allegations
from several non-confidential depositions of witnesses in an
action involving similar issues, which were taken in late
September and received by defendants' counsel in early
October; and (2) factual allegations from e-mails provided to
defendants' counsel from Maxx Powersport. Defendants
argue that these facts “further establish that the form
of the transaction is a sham, and that, in economic reality,
the transaction is a loan.” Def. Mot. for Leave to
Amend at 1.
opposes the motion for leave to amend on the grounds that it
is futile and would cause undue delay.