United States District Court, W.D. Wisconsin
OPINION AND ORDER
WILLIAM M. CONLEY District Judge
GQ Sand, LLC, brings this civil action against defendants
Conley Bulk Services, LLC, Range Management Systems, LLC
("RMS"), and NEJGID, LLC, arising out of a
multi-million dollar frac sand business deal gone awry.
Defendants have in turn filed counterclaims against
plaintiff. Finally, defendant NEJGID has asserted a
crossclaim against defendant Conley Bulk Services, LLC.
Sand and Conley filed motions for summary judgment (dkt.
##50, 72), which the court anticipates denying in substantial
part, but in addressing those motions, it has become obvious
that the plaintiff’s relatively recently-filed motion
for leave to amend its complaint has complicated matters by
seeking to add fraud and conspiracy claims against each of
the three defendants (dkt. #152), as has the previous and
meritorious defendants’ joint motion to deny
plaintiff’s summary judgment on those same claims
pursuant to Federal Rule of Civil Procedure 56(d) (dkt.
#114). For the reasons provided below, the court will: (1)
grant both of these motions; and (2) hold a telephonic
conference tomorrow to determine how best to address these
claims before trial.
curiously purported for the first time in its summary
judgment motion to be entitled to judgment as a matter of law
against all three defendants on claims of civil conspiracy
and fraud, neither of which were alleged in its amended
complaint. (Pl.’s Opening Br. (dkt. #52) 26-31.)
Plaintiff candidly acknowledges in its opening summary
judgment brief that these claims were not alleged, but argues
that pursuant to Federal Rule of Civil Procedure 15(b),
"the pleadings should be constructively amended."
(Id. at 27.) This argument makes little sense. Rule
15(b) deals with the amendments "During and After
Trial" to conform the pleadings to the evidence
presented at trial. It has no application at the
summary judgment stage. On the contrary, that is governed by
Rule 15(a), which expressly sets forth the procedure for
"Amendments Before Trial, " none of which plaintiff
chose to follow.
with defendants’ opposition to plaintiff’s
implicit attempt to once again amend its complaint through
summary judgment briefing, as well as defendants’ own
motion to defer or deny any consideration of summary judgment
on these two claims as contemplated by Rule 56(d) (dkt.
#114), plaintiff only recently filed a motion for leave to
amend its complaint to add these claims under Rule 15(a)(2).
(Dkt. #152.) While plaintiff should have sought leave to
amend at least contemporaneous with its January filing for
summary judgment, which is shortly after it purports to have
discovered evidence to support these claims, its insertion of
these claims at summary judgment at least gave defendants
notice of its intent to pursue them, ameliorating some of the
prejudice its delay in seeking a formal amendment of its
complaint may have caused.
the court will not consider plaintiff’s motion for
summary judgment on these claims until defendants have an
opportunity to respond effectively. Accordingly, while the
court will grant plaintiff’s belated motion to amend to
add these claims, see Foman v. Davis, 371 U.S. 178,
182 (1962) ("In the absence of any apparent or declared
reason . . . the leave sought should, as the rules require,
be ‘freely given.’"), it will also grant
defendants’ Rule 56(d) motion.
the court were to consider plaintiff’s arguments, the
conspiracy and fraud claims now asserted here do not lend
themselves to summary judgment in favor of the party bearing
the burden of proof. Hotel 71 Mezz Lender LLC v.
Nat’l Retirement Fund, 778 F.3d 593, 601 (7th Cir.
2015) (If the party with the burden of proof moves for
summary judgment, "it must lay out the elements of the
claim, cite the facts which it believes satisfies these
elements, and demonstrate why the record is so one-sided as
to rule out the prospect of a finding in favor of the
non-movant on the claim."). These claims necessarily
require the jury to draw inferences from the evidence.
Similarly, in light of plaintiff’s fairly significant
evidence in support of these claims, it would appear likely
that plaintiff’s claims would survive any motion for
summary judgment brought by defendants based on a challenge
to the sufficiency of plaintiff’s evidence.
may, however, be certain defenses available to defendants,
most notably Wisconsin’s economic loss doctrine.
See, e.g., Kaloti Enterprises, Inc. v. Kellogg
Sales Co., 2005 WI 111, ¶ 42, 283 Wis.2d 555, 699
N.W.2d 205 (describing economic loss doctrine and the narrow
exception for fraud in the inducement if extraneous to the
contract). Accordingly, the court will consider whether
defendants are entitled to some additional expedited
discovery or motion practice before proceeding to trial,
which it will do during a telephonic conference with the
parties tomorrow, June 10, 2016, at 12:00 p.m.
Defendants’ joint motion under Rule 56(d) (dkt. #114)
Plaintiff’s motion for leave to file a second amended
complaint (dkt. #152) is GRANTED.
Plaintiff’s proposed second amended complaint (dkt.
#152-1) is now the operative pleading. Defendants’