United States District Court, C.D. Illinois, Springfield Division
CSMC 2007-C4 EGIZII PORTFOLIO LLC, and U.S. BANK NATIONAL ASSOCIATION, as Trustee for the Registered Holders of the MEZZ CAP COMMERCIAL MORTGAGE TRUST 2007 C-5, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-C5, Plaintiffs,
SPRINGFIELD PRAIRIE PROPERTIES, LLC, an Illinois limited liability company; ROBERT W. EGIZII, an individual; MICHAEL EGIZII, an individual; RODNEY EGIZII, an individual; JODI BAPTIST, an individual; JOHN PRUITT, an individual; PAMELA JOHNSON, EXECUTOR OF THE ESTATE OF CLYDE BEIMFOHR; EEI HOLDING CORPORATION, an Illinois Corporation; and EGIZII PROPERTY MANAGERS, LLC, an Illinois limited liability company, Defendants.
RICHARD MILLS, UNITED STATES DISTRICT JUDGE
is the Plaintiffs' motion for leave to file an amended
complaint pursuant to Federal Rule of Civil Procedure 15(b).
their motion, the Plaintiffs state that they seek to clarify
their claims that EEI Holding Corporation
(“EEI”), Egizii Property Managers
(“EPM”) and Springfield Prairie Properties
(“Borrower”) are also alter egos of one another
also apply to Counts VI (Constructive Fraud under the UFTA)
and VII (Actual Fraud under the UFTA). The Plaintiffs claim
they have asserted this theory since the beginning of the
case and Defendants will not be prejudiced.
the Plaintiffs allege they seek to confirm their position
that certain additional transactions between EEI, EPM and
Borrower, such as the Egizii Lease Transactions (as defined
in the Complaint), also constitute fraudulent transfers under
Counts VI and VII. Some of the transactions are described in
the complaint and others were illuminated during the course
Plaintiffs claim that in both cases, much of the information
sought to be added was incorporated by reference into Counts
VI and VII. They contend that Defendants cannot claim
surprise or prejudice. All of the information sought to be
added has been the subject of testimony and cross-examination
Defendants object to the Plaintiffs' motion, noting that
it was filed at 9:57 p.m. on the eve of the last day of trial
following days of trial testimony over the course of five
weeks and almost four years after the action was filed. They
contend the claims that Plaintiffs seek to add are entirely
new. In the original complaint, Counts VI and VII were
directed only at the Borrower and Members. Rule 15(b)(1)
If, at trial, a party objects that evidence is not within the
issues raised in the pleadings, the court may permit the
pleadings to be amended. The court should freely permit an
amendment when doing so will aid in presenting the merits and
the objecting party fails to satisfy the court that the
evidence would prejudice that party's action or defense
on the merits. The court may grant a continuance to enable
the objecting party to meet the evidence.
Fed. R. Civ. P. 15(b)(1).
Defendants assert that alter ego liability against EEI and
EPM was not mentioned in those counts. Moreover, liability
was not alleged against the Borrower or Members relating to
back rent on the North MacArthur property.
Plaintiffs did not request leave to amend the complaint at
the final pretrial conference on March 28, 2019. On April 27,
2019, the Defendants note they objected to the
Plaintiffs' attempt to add allegations to the draft
pretrial order claiming liability against EEI and EPM for
alter ego liability, and for back rents against the Borrower
on the North MacArthur property under the fraudulent transfer
counts. At the time, the Plaintiffs did not seek leave of
court in attempting to expand the issues set forth in the
original complaint. The Defendants continued to object to
these issues at trial. The Court generally deferred rulings
on the objections.
Defendants further allege that the fact that Plaintiffs
conducted discovery regarding the back rents and alter ego
theories is meaningless because those legal theories were at
issue in other counts of the Complaint.
to complaints are liberally allowed under the Federal Rules
of Civil Procedure up to and even after trial, judgment, and
appeal, in cases in which there is no harm to the defendant
from the tardy amendment.” United States v.
Security Pacific Business Credit, Inc., 956 F.2d 703,
707-08 (7th Cir. 1992). “[A] party's consent to try
an unpleaded claim” is not implied “merely
because evidence relevant to a properly pleaded issue
incidentally tends to establish an unpleaded claim.”
Reynolds v. Tangherlini, 737 F.3d 1093, 1106 (7th
Cir. 2013). A court should generally allow an amendment
during trial “unless there is 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 the allowance of
the amendment, or futility of amendment.” Orix
Credit Alliance, Inc. v. Taylor Machine Works, Inc., 125
F.3d 468, 480 (7th Cir. 1997).
reviewing the record, the Court finds there was undue delay
on the part of the Plaintiffs. The Plaintiffs could have
sought leave to amend at the time of the final pretrial
conference or at some point before the trial would begin
approximately one month later. The Defendants have also
pointed to potential prejudice that would result if amendment
were allowed-that being their inability to question the
Plaintiffs' expert about certain issues related to the
on the Plaintiffs' undue delay and possible prejudice
that could result to the Defendants if amendment of the
complaint were allowed, the Court will ...