United States District Court, D. New Hampshire
HCC Specialty Underwriters, Inc.
John Woodbury, et al.
McCAFFERTY UNITED STATES DISTRICT JUDGE
the court is a motion to amend the complaint filed by
plaintiff HCC Specialty Underwriters, Inc.
(“HCC”). See doc. no. 46. In the original
complaint, HCC alleges that defendant John Woodbury, a former
employee of HCC, violated his 1996 non-compete agreement and
misused confidential information while working for defendant
Buttine Underwriters Agency, LLC d/b/a Prize and Promotion
Insurance Services (“Buttine”), a competitor of
HCC. Based upon information it claims to have learned during
discovery, HCC seeks to amend the complaint to allege that
Woodbury also violated a 2001 release and misappropriated
trade secrets. Defendants object and argue that HCC's
motion is untimely. For the following reasons, HCC's
motion is granted.
HCC moves to amend the complaint after the deadline set out
in the scheduling order, “the court evaluates
[HCC's] request . . . under the Rule 16 ‘good
cause' standard.” Ashley v. Spaulding Youth
Ctr., No. 16-cv-37-JL, 2016 WL 5477574, at *5 (D.N.H.
Sept. 29, 2016) (emphasis omitted); see also Fed. R.
Civ. P. 16(b)(4) (“A schedule may be modified only for
good cause and with the judge's consent.”). The
purpose of this standard is to “preserve the
integrity and effectiveness of Rule 16(b) scheduling
orders.” O'Connell v. Hyatt Hotels of
P.R., 357 F.3d 152, 155 (1st Cir. 2004); see also
Cruz v. Bristol-Myers Squibb Co., PR, Inc., 699 F.3d
563, 570 (1st Cir. 2012) (“A scheduling order is not a
frivolous piece of paper, idly entered, which can be
cavalierly disregarded by counsel without peril.”
16(b)'s ‘good cause' standard emphasizes the
diligence of the party seeking the amendment.”
O'Connell, 357 F.3d at 155. The question is whether the
deadline could not have been reasonably met “despite
the diligence of the party seeking the extension.”
Id. at 154 (quotation omitted). “Prejudice to
the opposing party remains relevant but is not the dominant
criterion.” Id. at 155. As the party seeking
leave to amend, HCC bears the burden of establishing good
cause. See Forrester Envtl. Servs., Inc. v. Wheelabrator
Techs., Inc., No. 10-cv-154-JL, 2012 WL 928080, at *2
(D.N.H. Mar. 19, 2012).
following facts are taken from the original complaint, unless
otherwise noted. HCC is a provider of specialized insurance
products, including insurance related to “event
cancellation, weather, travel, event liability, prize
indemnity, contractual bonus and over-redemption
insurance.” Doc. no. 1 at ¶ 13. Prior to his
resignation in 2016, Woodbury was employed for more than two
decades by HCC, or one of its predecessors. Woodbury's
work appears to have involved developing and managing client
present litigation arises from an employment agreement
between Woodbury and a predecessor of HCC, American Specialty
Underwriters, Inc. The agreement was executed in 1996 and is
titled “Employment, Incentive Compensation,
Confidentiality and Non-Competition Agreement”
(hereinafter the “1996 Agreement”). Woodbury
agreed that, during his employment and for a period of two
years following his termination, he would not divert business
from his employer, would not “interfere in any material
respect with any business relationship between [the employer]
and any other person, ” and would not render services
to another whose activities would violate the agreement if
performed by Woodbury. Id. at ¶ 16. Woodbury
also agreed that he would not use confidential company
information on behalf of any future employer.
resigned from HCC in June 2016. Shortly thereafter, he began
working for Buttine, which soon launched a new set of
insurance products. HCC alleges that these insurance products
are “direct competitive offerings to that of HCC,
” and that Woodbury was hired to develop this area of
Buttine's business. Id. at ¶ 25. HCC
asserts that, since Woodbury's resignation, defendants
have met with reinsurers and clients that have business
relationships with HCC. HCC thus alleges that Woodbury is
violating the 1996 Agreement by helping Buttine compete
against HCC in this niche insurance market.
further alleges that defendants have used or will use
HCC's confidential information to compete against HCC.
HCC bases this allegation on the fact that Woodbury engaged
in unusual activity on his work computer shortly before, and
directly after, he tendered his resignation. Specifically,
Woodbury accessed information that he had no need to access,
including contracts for prior clients, HCC's budget
information, and a spreadsheet containing HCC's rates for
a certain insurance product. Although HCC did not allege a
claim for misappropriation of trade secrets in the original
complaint, it did allege that some of the information
Woodbury accessed would constitute trade secrets under state
on defendants' alleged conduct, HCC brought the present
action. In the original complaint, HCC raises claims for
specific performance of the 1996 Agreement (Count I); breach
of the 1996 Agreement by Woodbury (Count II); tortious
interference with the 1996 Agreement by Buttine (Count III);
a declaratory judgment that the 1996 Agreement is valid and
enforceable (Count IV); and a claim against both defendants
under the New Hampshire Consumer Protection Act (Count V).
moves to amend its complaint to add two new claims, as well
as additional factual allegations relevant to those claims.
HCC asserts that it only recently discovered the information
supporting these claims.
first new claim is for breach of contract. HCC alleges that
Woodbury breached a release executed by Woodbury and ASU
International, Inc.-another of HCC's predecessors-in 2001
(hereinafter “the 2001 Release”). The 2001
Release was executed as part of a security purchase agreement
between ASU International and HCC's parent company, under
which HCC's parent company would acquire ASU
International's stock. HCC alleges that the 2001 Release
reaffirms Woodbury's ...