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Community Voice Line LLC v. Great Lakes Communication Corp.

United States District Court, Eighth Circuit

December 4, 2013

COMMUNITY VOICE LINE, LLC, a Maryland Limited Liability Company, Plaintiff,
v.
GREAT LAKES COMMUNICATION CORP., an Iowa Corporation, Defendant.

ORDER GRANTING PLAINTIFF’S MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT

LEONARD T. STRAND UNITED STATES MAGISTRATE JUDGE

TABLE OF CONTENTS

I. INTRODUCTION ........................................................................... 2

II. BACKGROUND ............................................................................. 2

III. THE PROPOSED AMENDED COMPLAINT ........................................ 5

IV. ANALYSIS ................................................................................... 7

A. Undue Delay ......................................................................... 8

B. Undue Prejudice .................................................................. 10

C. Harassing and Proffered in Bad Faith ....................................... 11

D. Futility of Claims ................................................................. 12

1. Claims Against Nelson .................................................. 13

2. Claims Against Comity .................................................. 18

3. Claims Against Audio Now, FM Haiti and Radio France ........ 20

E. Claims Being Pursued in Maryland State Court ............................ 21

V. CONCLUSION ............................................................................ 23

I. INTRODUCTION

Plaintiff has filed a motion (Doc. No. 163) for leave to file a second amended complaint. The defendant has filed a resistance (Doc. No. 169) and the plaintiff has filed a reply (Doc. No. 181). No party has requested oral argument and, in any event, I find that oral argument is not necessary. See N.D. Ia. L.R. 7(c). The motion is fully submitted.

II. BACKGROUND

Community Voice Line, LLC (CVL), commenced this action against Great Lakes Communication Corporation (GLCC) on May 15, 2012, alleging breach of contract and unjust enrichment. Doc. No. 2. In its original complaint, CVL alleged it entered into an agreement with GLCC in July 2009. The agreement provided that GLCC would assign CVL certain designated telephone numbers (Program Numbers). Callers to CVL’s Program Numbers would originate their calls through their telecommunications carrier (Originating Carrier), from whom GLCC would collect a fee. GLCC would then pay CVL, as a marketing fee or commission, fifty percent of the fees it collected from the Originating Carrier. CVL alleged GLCC failed to pay CVL the marketing fees/commissions for February 2012 through April 2012, and sought compensatory damages in the amount of $507, 359.00 plus interest, costs and fees.[1]

On September 25, 2012, I granted GLCC’s unresisted motion to file a second amended answer, counterclaim and third party complaint.[2] Doc. No. 28. In its counterclaim and third party complaint, GLCC alleged it entered into an agreement with not only CVL, but also Blitz Telecom Services, LLC (Blitz Telecom), and Robert Russell, who is the president and owner of CVL and Blitz Telecom. GLCC alleged this agreement contained an indemnity clause which required CVL, Blitz Telecom and Russell (the “Blitz defendants”) to “defend, indemnify, and hold [GLCC] harmless from all claims, investigations, alleged violations, costs (including attorney’s fees), liabilities and damages arising from [their] performance under this agreement.” Doc. No. 29 at 9. GLCC alleged actual or anticipatory breach of contract, declaratory relief, promissory estoppel, fraudulent misrepresentation, fraudulent inducement, negligent misrepresentation and conspiracy based on the Blitz defendants’ refusal to honor the indemnity clause in connection with the disputes of this lawsuit and other pending litigation. Doc. No. 29 ¶ 35.

CVL and the third party defendants filed a motion to dismiss arguing, among other things, that GLCC had not identified any claim against GLCC that would trigger an alleged indemnification obligation. Doc. Nos. 45, 46, 47. In its resistance, GLCC stated that a case pending in a Maryland state court entitled Community Voice Line, LLC v. Alpine Audio Now, LLC et al. (the Maryland case) implicated the agreement containing the indemnification provision. Doc. No. 52. In that lawsuit, CVL alleged Alpine Audio Now, LLC (Audio Now), caused GLCC to port CVL’s Program Numbers directly to Audio Now and that Audio Now conspired with a GLCC affiliate, Comity Communications, LLC (Comity), to interfere with CVL and GLCC’s agreement. At that time, Audio Now alleged GLCC was a necessary party to the lawsuit.[3]

Judge Bennett denied CVL’s motion to dismiss. Doc. No. 71. CVL and the third party defendants then filed a motion for summary judgment. Doc. No. 109. GLCC stipulated to the dismissal of the third party defendants and Judge Bennett later granted summary judgment in CVL’s favor on all of GLCC’s counterclaims. Doc. No. 158.

While the counterclaim and third party complaint were being litigated, CVL and GLCC engaged in multiple discovery disputes. On November 27, 2012, CVL filed a motion to compel alleging GLCC had not produced certain responsive documents. Doc. No. 44. GLCC filed a resistance and I held a telephonic hearing on January 10, 2013. I issued an order that day giving GLCC a deadline of January 25, 2013, to file supplemental written responses to each document request and to produce any responsive documents. Doc. No. 64.

On April 17, 2013, CVL filed a motion for sanctions alleging GLCC continued to withhold documents despite my order compelling discovery. Doc. No. 73. GLCC filed a resistance and I held a hearing on June 6, 2013. I found that GLCC violated the January 10 order by (a) stating it had produced all “non-privileged documents” that it “located after a reasonable investigation” instead of stating it had no responsive documents in its possession, custody or control and (b) failing to produce all required documents by January 25, 2013. Doc. No. 106. I granted monetary and non-monetary sanctions. In imposing a non-monetary sanction, I barred GLCC from using or offering into evidence any documents, records or data that it did not produce to CVL on or before July 1, 2013, to the extent those materials were within the scope of CVL’s specified document requests. Doc. No. 106 at 10. I emphasized that this did not relieve GLCC from its continuing obligation to supplement its responses to discovery requests and if additional documents existed or were found, they had to be produced to CVL. Id.

In the meantime, GLCC had also filed motions to compel alleging CVL provided incomplete responses to interrogatories and failed to produce responsive documents. Doc. Nos. 85, 97. CVL filed resistances and I held a telephonic hearing on both motions on July 25, 2013. Those motions were granted in part and denied in part. Doc. No. 127.

Relevant to the current dispute is CVL’s supplemental motion for sanctions on July 25, 2013. Doc. No. 113. In that motion, CVL stated GLCC provided a disc containing 492 pages of documents on July 24, 2013. Doc. No. 113 at 2. CVL stated these documents were within the scope of my January 10, 2013, order and CVL’s prior document requests. CVL also noted that GLCC had stated it was reviewing documents related to Audio Now, which would be produced by July 29, 2013. These documents, consisting of 227 pages, were produced on that date. Doc. No. 163 at 4. Ultimately, I did not impose additional sanctions, but warned GLCC that any new discovery violations would be subject to sanctions. I gave it a “safe harbor” period to produce any further documents by September 16, 2013. Doc. No. 149 at 3-4. CVL contends it became aware of the factual bases for the proposed new claims as a result of GLCC’s July 2013 document production.

III. THE PROPOSED AMENDED COMPLAINT

CVL seeks to add five new, named defendants and up to ten unnamed defendants, while expanding its complaint to nineteen counts. The additional defendants are Comity, Audio Now, Josh Nelson (president of GLCC and Comity), France Media Monde t/a Radio France Internationale (Radio France), Signal FM Haiti and various other radio stations identified as John Does (1-10).[4] In addition to the breach of contract and unjust enrichment claims against GLCC, CVL proposes the following causes of action:

Count III Promissory Estoppel against GLCC (nonpayment of marketing fees and commissions)
Count IV Breach of Contract against GLCC (interference with existing and future contracts and business relationships)
Count V Unjust Enrichment against GLCC (interference with existing and future contracts and business relationships)
Count VI Promissory Estoppel against GLCC (interference with existing and future contracts and business relationships)
Count VII Fraudulent Inducement against GLCC and Josh Nelson
Count VIII Fraudulent Misrepresentation against GLCC and Josh Nelson
Count IX Intentional Interference with Existing Contracts and Business Relationships against GLCC, Comity and Josh Nelson
Count X Intentional Interference with Prospective Business Advantage against GLCC, Josh Nelson and Audio Now
Count XI Breach of Contract against Audio Now
Count XII Unjust Enrichment against Audio Now (confidential information)
Count XIII Unjust Enrichment against Audio Now (program numbers)
Count XIV Intentional Interference with Existing Contracts and Business Relationships against Audio Now, Radio France Internacioanale [sic], FM Haiti and John Does (1-10)
Count XV Intentional Interference with Prospective Business Advantage against Audio Now, Radio France Internationale, FM Haiti, and John Does (1-10)
Count XVI Conversion of the Program Numbers against GLCC, Audio Now, Comity
Count XVII Conversion of Confidential Information against GLCC, Audio Now, Comity
Count XVIII Violation of 47 U.S.C.A. § 264 against GLCC
Count XIV Civil Conspiracy against GLCC, Audio Now, Comity, Josh Nelson and the ...

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