United States District Court, E.D. Tennessee
A. Varlan, CHIEF UNITED STATES DISTRICT JUDGE
the Court are plaintiffs' motion for leave to amend the
complaint [Docs. 35, 36] and defendants' motions for
judgment on the pleadings [Docs. 32, 33, 48]. Defendants
responded to plaintiffs' motion [Doc. 38], and plaintiffs
responded to defendants' motions [Docs. 34, 37, 50].
Plaintiffs also filed a reply regarding their motion for
leave to amend [Doc. 39]. For the reasons explained below,
the Court will deny plaintiffs' motion for leave to amend
and grant defendants' motions for judgment on the
matter originated when defendant Anderson Lumber Company,
Inc. (“Anderson”) filed a complaint on November
21, 2012, against “Chris Kinney and Margaret Kinney,
d/b/a Kinney Custom Interiors, ” in the Circuit Court
for Blount County, Tennessee, Equity Division [Case No.
3:15-cv-324, Doc. 3 pp. 7-8]. In the complaint underlying the
state action, Anderson sought recovery of $34, 765.98 from
the Kinneys for “supplies and materials” they
allegedly purchased from Anderson [Id.].
Anderson's corporate attorney, John T. McArthur of the
firm Kizer & Black Attorneys, PLLC
(“K&B”), filed the state action [Id.
at 8]. On August 11, 2014, the state court added William
Kinney as an additional defendant to the action [Id.
December 2, 2014, the Circuit Court for Blount County issued
an order referring the case to Special Master Jason Rose
[Case No. 3:15-cv-324, Doc. 1-2 pp. 85-86]. A hearing was
held on February 13, 2015, and Special Master Rose issued a
report on April 30, 2015 [3:15-cv-324, Doc. 3 pp. 15-19]. He
determined that that the Kinneys owed Anderson $32, 912.95
[Id.]. On July 28, 2015, the Kinneys attempted to
remove the state action to federal court by filing a notice
of removal [3:15-cv-324, Doc. 1]. Anderson then filed a
motion to remand [3:15-cv-324, Doc. 3], which the Court
granted [3:15-cv-324, Docs. 7, 8]. Plaintiffs then once again
attempted to remove the underlying state court action to
federal court [3:17-cv-288, Doc. 1], and defendants filed
motions to remand [3:17-cv-288, Docs. 4, 5], which the Court
granted [3:17-cv-288, Doc. 12].
February 16, 2016, plaintiffs, acting pro se, filed
the present action, alleging a number of claims against
Anderson, their lawyers, various finance firms, and Jason
Rose, the special master in the state court proceedings [Doc.
1]. Defendants filed motions to dismiss [Docs. 4-7, 14],
after which plaintiffs moved for leave to amend the complaint
[Doc. 23], which they had previously amended once before
[Doc. 3]. On March 28, 2017, the Court granted in part and
denied in part defendants' motion to dismiss, allowing
only plaintiffs' Fair Debt Collection Practices Act
(“FDCPA”) claims against Anderson, McDonald, and
K&B to proceed [Doc. 28]. The Court also denied
plaintiffs' motion to amend the complaint for failure to
comply with local rules, undue delay in moving to amend, and
remaining defendants then filed motions for judgment on the
pleadings [Docs. 32, 33, 48], after which plaintiffs again
moved for leave to amend the complaint [Docs. 35, 36]. These
motions are presently before the Court.
plaintiffs filed their motion to amend after defendants filed
their motions for judgment on the pleadings, granting a
motion for judgment on the pleadings before addressing a
pending motion to amend can be an abuse of discretion.
See Thompson v. Superior Fireplace Co., 931 F.2d
372, 374 (6th Cir. 1991). As such, the Court first considers
plaintiffs' motion to amend, and will then turn to
defendants' motions for judgment on the pleadings.
Plaintiffs' Motion for Leave to Amend the
previously amended the complaint, and having previously been
denied leave to amend the complaint a second time, plaintiffs
once again move for leave to amend the complaint. Plaintiffs
seek to add five additional Tennessee state-law claims
against defendants and to add Blue Tarp Financial as a
defendant, an entity which was previously dismissed from this
from the situations described in Federal Rule of Civil
Procedure 15(a)(1), which do not apply here, “a party
may amend its pleading only with the opposing party's
written consent or the court's leave.” Fed.R.Civ.P.
15(a)(2). “The court should freely give leave, ”
however, “when justice so requires.” Id.
Leave is appropriate “[i]n the absence of . . . 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, [or] futility of the
amendment.” Leary v. Daeschner, 349 F.3d 888,
905 (6th Cir. 2003) (quoting Foman v. Davis, 371
U.S. 178, 182 (1962)); accord Courie v. Alcoa Wheel &
Forged Prods., 577 F.3d 625, 633 (6th Cir. 2009).
“Amendment of a complaint is futile when the proposed
amendment would not permit the complaint to survive a motion
to dismiss.” Miller v. Calhoun Cty., 408 F.3d
803, 807 (6th Cir. 2005) (citing Neighborhood Dev. Corp.
v. Advisory Council on Historic Pres., 632 F.2d 21, 23
(6th Cir. 1980)).
Court will deny plaintiffs' motion for leave to amend on
grounds of futility, undue prejudice to defendants, and
unnecessary delay. As an initial matter, plaintiffs ask the
Court to add Blue Tarp Financial as a defendant pursuant to
their proposed second amended complaint. The Court previously
dismissed plaintiffs' FDCPA claims against Blue Tarp
Financial, finding that Blue Tarp Financial did not attempt
to collect a debt from plaintiffs [Doc. 28 p. 20]. That
decision remains sound, as the proposed second amended
complaint does not allege that Blue Tarp Financial attempted
to collect a debt from plaintiffs [Doc. 35-3]. In fact, while
plaintiffs request the addition of Blue Tarp Financial in
their motion, the proposed second amended complaint does not
list Blue Tarp Financial as a defendant in the caption, nor
does it list Blue Tarp Financial in the section labeled
“parties” where the other defendants are
identified [See id. at 1-2].
discussed further below, plaintiffs' FDCPA claims are
barred by the applicable statute of limitations because
activity associated with the ongoing litigation between the
parties is not subject to the continuing violation doctrine
and does not constitute a discrete violation of the FDCPA.
Slorp v. Lerner, Sampson, & Rothfuss, 587 F.
App'x 249, 258- 59 (6th Cir. 2014). This renders
amendment of the complaint futile, as plaintiffs' FDCPA
claims will be dismissed, and the remaining claims in the
proposed second amended complaint are state-law claims
between non-diverse parties over which the Court would
decline jurisdiction [See Doc. 35-3]; see also
Bowers v. Ophthalmology Gr. LLP, 648 F. App'x 573,
582 (6th Cir. 2016) (“When ...