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Westwacker K-Parcel LLC. v. Pacific Mutual Life Insurance Co.

March 3, 2008

WESTWACKER K-PARCEL LLC AND WESTWACKER HOLDINGS, LLC, PLAINTIFFS,
v.
PACIFIC MUTUAL LIFE INSURANCE CO., DEFENDANT.



The opinion of the court was delivered by: Charles P. Kocoras, District Judge

MEMORANDUM OPINION

This matter is before the Court on Plaintiffs WestWacker K-Parcel, LLC, and WestWacker Holdings, LLC (collectively, "WestWacker")'s motion to file a second amended complaint. For the following reasons, WestWacker's motion is denied.

BACKGROUND

WestWacker filed its two-count amended complaint against Defendant Pacific Life Insurance Co. ("Pacific") on October 31, 2005. Count I of WestWacker's complaint alleged a breach of contract claim against Pacific and Count II sought a declaratory judgment on the legality of the prepayment provision in the parties' contract (the "Contract"). WestWacker subsequently filed a motion for summary judgment on both counts in October 2006.

WestWacker's arguments concerning Count II of its complaint were based in part on the District Court's analysis in River East Plaza, LLC v. The Variable Annuity Life Insurance Co., 2006 WL 2787483 (N.D. Ill. Sept. 22, 2006). While we were considering WestWacker's motion for summary judgment, the Seventh Circuit reversed the District Court's holding in River East. 498 F.3d 718 (7th Cir. 2007). After determining that the Seventh Circuit's decision negated its summary judgment arguments concerning its declaratory judgment claim, WestWacker requested leave to withdraw Count II of its first amended complaint. We subsequently dismissed Count II of WestWacker's first amended complaint without prejudice and ruled in Pacific's favor on Count I.

WestWacker filed a Rule 59(e) motion seeking to amend our summary judgment decision concerning Count I of its first amended complaint, which we denied on November 14.

On December 13, WestWacker filed the instant motion for leave to file a second amended complaint, again seeking a declaration on the legality of the prepayment provision in the Contract.

LEGAL STANDARD

Federal Rule of Civil Procedure 15 sets out the guidelines concerning amended pleadings. A party may amend its complaint once as a matter of course but must obtain the opposing party's written consent or the court's leave to do so a second time. Fed. R. Civ. P. 15(a)(2). "The decision on whether to allow the amendment is within the discretion of the court." Forman v. Davis, 371 U.S. 178, 182 (1962). A court "should freely give leave [to file a second amended complaint] when justice so requires." Id. Such liberal construction of the federal rules regarding amendments allows courts to decide cases "on the merits rather than on bare pleadings." Fuhrer v. Fuhrer, 292 F.2d 140, 143 (7th Cir. 1961).

When the defendant has alleged that "the complaint as amended would fail to state a claim, the court should deal with the issue on the motion for leave to amend, rather than mechanically allowing the amendment and forcing the defendant to go through the formality of instituting a distinct Rule 12(b)(6) motion." Gutirrez v. Vergari, 499 F. Supp. 1040, 1045 (D.C.N.Y. 1980).

Rule 12(b)(6) evaluates the legal sufficiency of a plaintiff's complaint. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In ruling on a motion to dismiss, a court must draw all reasonable inferences in favor of the plaintiff, construe all allegations of a complaint in the light most favorable to the plaintiff, and accept as true all well-pleaded facts and allegations in the complaint. Bontkowski v. First Nat'l Bank of Cicero, 998 F.2d 459, 461 (7th Cir. 1993); Perkins v. Silverstein, 939 F.2d 463, 466 (7th Cir. 1991). To be cognizable, the factual allegations contained within a complaint must raise a claim for relief "above the speculative level." Bell Atlantic Corp. v. Twombly, - U.S. -, 127 S.Ct. 1955, 1965 (2007). However, a pleading need only convey enough information to allow the defendant to understand the gravamen of the complaint. Payton v. Rush-Presbyterian-St. Luke's Med. Ctr., 184 F.3d 623, 627 (7th Cir. 1999).

With these principles in mind, we will consider the instant motion.

DISCUSSION

Pacific argues that we should deny WestWacker's proposed second amended complaint because it fails to meet the standards set forth in Rule 12(b)(6). As such, the relevant issue at this time is whether WestWacker's allegations support a declaratory judgment that the ...


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