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Kinney v. Anderson Lumber Company, Inc.

United States District Court, E.D. Tennessee

January 9, 2018

WILLIAM KINNEY and MARGARET KINNEY, Plaintiffs,
v.
ANDERSON LUMBER COMPANY, INC., BLUE TARP FINANCIAL, INC., KIZER & BLACK ATTORNEYS, PLLC, McDONALD, LEVY, & TAYLOR, P.C., and JASON ROSE, Defendants.

          MEMORANDUM OPINION

          Thomas A. Varlan, CHIEF UNITED STATES DISTRICT JUDGE

         Before 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 pleadings.

         I. BACKGROUND

         This 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. at 12].

         On 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].

         On 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 futility [Id.].

         The 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.

         II. ANALYSIS

         Although 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.

         A. Plaintiffs' Motion for Leave to Amend the Complaint

         Having 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 case.

         Aside 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)).

         The 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].

         As 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 ...


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