United States District Court, D. New Hampshire
McCafferty United States District Judge.
document no. 313, defendant BMS CAT seeks leave to file a
second amended answer which asserts an affirmative defense
that first became available as a result of events that took
place after it had filed its first amended answer. Defendant
invokes Rule 15(a)(2) of the Federal Rules of Civil Procedure
(“Federal Rules”), which provides that, under the
circumstances of this case, “[t]he court should freely
give leave [to amend] when justice so requires.” In
lieu of filing an objection to BMS CAT's motion,
plaintiff Sanjeev Lath moves to strike defendant's
proposed second amended answer on grounds that the corporate
disclosure statement that BMS CAT filed, in compliance with
Rule 7.1 of the Federal Rules, is defective. See doc. no.
315. Defendant objects. For the reasons that follow, BMS
CAT's motion for leave is granted, and Lath's motion
to strike is denied.
noted, Rule 15(a)(2) provides that leave to amend a pleading
should be freely given when justice so requires. Here, it is
difficult to see how justice does not require the court to
grant BMS CAT leave to file its proposed second amended
answer. Lath filed his original complaint on December 15,
2016. In it, he did not assert any claims against BMS CAT. On
January 25, 2017, Lath filed, as of right, his First Amended
Complaint (“FAC”), which asserts claims arising
from conduct that took place after he had filed his original
complaint. Some of those claims are based on the manner in
which BMS CAT performed its duties under three contracts with
Lath in which it agreed to clean and restore possessions that
were damaged in a fire at Lath's unit at the Oak Brook
FAC, Lath alleges that BMS CAT took a No. of items from his
unit for cleaning, disposed of some, and retained the rest,
due to a dispute with him over payment for its services.
After trying unsuccessfully to recover his property, Lath
asserted a claim for conversion against BMS CAT. BMS CAT
filed its answer to Lath's FAC on March 21, 2017. On that
same day, BMS CAT filed a disclosure statement, pursuant to
Rule 7.1, in which it stated that “BMS Cat Inc. is a
subsidiary of BMS Cat Group Inc. [and that] BMS Cat Group
Inc. is itself a subsidiary of The BMS Enterprises,
Inc.” Doc. no. 68 at ¶ 2. BMS CAT further stated
that “[w]hile it does not appear that they were even
intended to be a party to this case, BMS Catastrophe Inc. is
a subsidiary of Utech Inc. which in turn is also a subsidiary
of The BMS Enterprises, Inc.” Id. at ¶ 3.
On August 17, 2017, with the court's leave, BMS CAT filed
its first amended answer.
motion now before the court, BMS CAT seeks the court's
leave to file a second amended answer. BMS CAT says that in
January 2018, it offered to return the property that is the
subject of Lath's conversion claim, and that Lath refused
to take possession of it. On that basis, BMS CAT wishes to
file a second amended answer that asserts failure to mitigate
as an affirmative defense to Lath's conversion claim.
than filing an objection to BMS CAT's motion and
explaining why justice does not require the court to grant
it, see Fed.R.Civ.P. 15(a)(2), Lath has filed a motion to
strike BMS CAT's proposed second amended answer. However,
rather than relying on any of the grounds listed in Rule
12(f), which pertains to motions to strike, Lath contends
that BMS CAT's proposed second amended answer should be
stricken because of purported defects in the disclosure
statement that BMS CAT filed pursuant to Rule 7.1. Lath
appears to have first described those purported defects in a
motion for leave to file certain motions, including a
“Motion to enter defective corporate disclosure
statement by BMS Cat Inc.” Doc. no. 291 at
According to Lath:
BMS Cat in its disclosure statement pursuant to F.R.Civ.P
Rule 7.1 identified “UTech” as the parent
company. Such a disclosure is incorrect as the true parent
company for BMS Cat Inc. is “Steamatic Inc.”
Defendant BMS Cat in this disclosure statement failed to
identify a multitude of other companies that it operates
throughout the United States, which may be the parent company
of BMS Cat.
Id. (citation to the record omitted). The key assertion
in the foregoing paragraph is Lath's assertion that BMS
CAT's parent company is Steamatic Inc.
problem with Lath's motion to strike is that he has
identified no authority for the proposition that an error or
omission in a Rule 7.1 disclosure statement would give the
court grounds to strike a document such as BMS CAT's
proposed second amended answer. In his motion to strike,
after outlining the basis for his belief that Steamatic Inc.
is BMS CAT's parent company, Lath cites Rule
37(b)(2)(A)(iii) for the proposition that the court may
sanction a party for failing to obey a discovery order by
“striking pleadings in whole or in part.”
Lath's view, he is entitled to the relief described in
Rule 37(b)(2)(A)(iii) because BMS CAT's failure to
provide a truthful corporate disclosure statement, pursuant
to Rule 7.1, somehow ran afoul of the court's June 6,
2017, scheduling order which, among other things, set a
deadline for BMS CAT to make its mandatory disclosures under
Rule 26. Lath, however, seems to conflate the disclosures
required by Rule 26 and those required by Rule 7.1. As for
the latter, “[t]he corporate disclosure statement
[required by Rule 7.1] is not a discovery device in the sense
that failure to file ordinarily does not carry
sanctions.” Bernardi Ortiz v. Cybex Int'l,
Inc., Civ. No. 15-2989 (PAD), 2018 WL 2448130, at *6 n.9
(D.P.R. May 30, 2018) (citations omitted). While Bernardi is
not directly on point, because it was a case in which a
defendant appears not to have filed any Rule 7.1 statement at
all, it is sufficient to take the Rule 37(b)(2)(A) sanctions
off the table as possible relief for the filing of an
erroneous Rule 7.1 disclosure statement. Because those
sanctions are inapplicable to the circumstances of this case,
Lath's motion to strike is necessarily denied.
because Lath is appearing pro se, the court is obligated to
construe his pleadings liberally. See Erickson v.
Pardus, 551 U.S. 89, 94 (2007) (per curiam).
Accordingly, the court will proceed down an alternative path
and construe Lath's motion to strike as an objection to
BMS CAT's motion for leave to file second amended answer.
Lath's motion to strike is construed as an objection, the
question becomes whether Lath has provided the court with a
reason why justice does not require BMS CAT's motion for
leave to be granted. Even if the court were to accept the
proposition that the filing of an erroneous Rule 7.1
disclosure statement, in March 2017, somehow disqualified BMS
CAT from filing an amended answer in April of 2008, Lath has
not shown that BMS CAT filed an erroneous Rule 7.1 statement.
Lath identified Steamatic Inc. as a parent of BMS CAT in
document no. 291, i.e., his motion for leave, his motion to
strike says something a bit different, i.e., that “BMS
Cat Inc. of Massachusetts['s] precursor company is
Steamatic Inc., ” doc. no. 315 at 2 (emphasis added). A
“precursor” company is not the same thing as a
“parent” company, and there is nothing in the
corporate history that Lath recites in his motion that would
support a claim that Steamatic Inc. is a parent of BMS CAT.
on in his motion to strike, Lath backs off even more from his
allegation that Steamatic Inc. is ...