Peddada v. Catholic Health Initiatives Colorado et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Nina Y. Wang
Civil Action No. 23-cv-01921-NYW-MDB
DR. ANUJ PEDDADA,
Plaintiff,
v.
CATHOLIC HEALTH INITIATIVES COLORADO d/b/a CENTURA HEALTH-PENROSE-
ST. FRANCIS HEALTH SERVICES, and
COMMONSPIRIT HEALTH FOUNDATION d/b/a COMMONSPIRIT HEALTH,
Defendants.
ORDER ON MOTION TO AMEND
Pending before the Court is the Motion for Leave to File First Amended Complaint
(“Motion to Amend” or “Motion”) filed by Plaintiff on April 9, 2024. [Doc. 50]. Defendants
timely responded in opposition to the Motion to Amend, [Doc. 54], and Plaintiff filed a
reply, [Doc. 56]. The issues have been fully briefed, and the Court does not believe that
oral argument would materially aid in the resolution of this matter. 	For the reasons set
forth below, the Court GRANTS the Motion to Amend.
BAGKGROUND
Plaintiff Dr. Anuj Peddada (“Plaintiff” or “Dr. Peddada”) initiated this action on July
27, 2023, against Defendants Catholic Health Initiatives Colorado d/b/a Centura Health-
Penrose-St. Francis Health Services (“CHIC” or “Penrose”) and CommonSpirit Health
Foundation d/b/a CommonSpirit Health (“CommonSpirit” and together, “Defendants”).
[Doc. 1].
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Dr. Peddada is a board-certified radiation oncologist. [Id. at ¶ 13]. For decades,
Dr. Peddada operated a private practice through which he provided cancer treatment to
patients at Penrose. 	[Id. at ¶¶ 21–23]. 	According to the operative Complaint, in April
2022, Penrose convinced Dr. Peddada to accept an offer of employment to move in-
house at Penrose. 	[Id. at ¶¶ 73, 77–78]. 	Shortly thereafter, Dr. Peddada requested
medical leave and disclosed to Penrose that he was suffering from physiological and
psychological symptoms of physician burnout. 	[Id. at ¶¶ 110–18]. 	Days later, Penrose
abruptly retracted its employment offer and terminated its relationship with Dr. Peddada.
[Id. at ¶¶ 119–27]. This lawsuit followed.
Dr. Peddada asserts ten claims for relief against Defendants, including six claims
under the Americans with Disabilities Act (“ADA”), [id. at ¶¶ 153–84]; a claim under the
Rehabilitation Act of 1973, [id. at ¶¶ 185–91]; and Colorado state law claims for wrongful
discharge 	in 	violation 	of 	public 	policy, 	unjust 	enrichment, 	and 	civil 	conspiracy,
respectively, [id. at ¶¶ 192–220].
On September 20, 2023, the Parties filed a Proposed Scheduling Order, wherein
Defendants asserted that “CommonSpirit is not a proper party.” [Doc. 14 at 3]. The next
day, Defendants filed a partial motion to dismiss, seeking to dismiss only Dr. Peddada’s
wrongful discharge in violation of public policy claim (“Partial Motion to Dismiss”). [Doc.
21]. 	Defendants did not seek to dismiss CommonSpirit or otherwise argue that
CommonSpirit is “not a proper party.” See generally [id.].
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On October 4, 2023, the Honorable Maritza Dominguez Braswell entered a
Scheduling Order in this case. [Doc. 25].1 The Scheduling Order sets forth Defendants’
positional statement, which includes in relevant part:
Common Spirit is not a proper party. 	Catholic Health Initiatives Colorado
(CHIC) is the proper party. Common Spirit is the sole member of CHIC, but
that fact does not make it a proper party, because it took no action relevant
to this case. Centura was a “subsidiary” of CHIC and Adventist Health that
jointly managed their facilities, but, as of August 1, 2023, Centura and the
joint 	management 	are 	now 	gone. . . . 	The 	facilities 	are 	now 	directly
managed by their owners, which in the case of Penrose is CHIC. Centura
has not been succeeded by CommonSpirit Health.
[Id. at 3]. 	Pursuant to the Scheduling Order, the deadline for amendment of pleadings
was October 31, 2023, and discovery closes on November 14, 2024. [Id. at 11].
On March 6, 2024, Defendants served “Penrose’s Objections and Responses to
Plaintiff’s First Set of Requests for Production of Documents.” 	[Doc. 50-3]. 	Relevant
here, Defendants refused to respond to discovery requests on behalf of CommonSpirit
because:
Defendants 	collectively 	object 	to 	inclusion 	of 	CommonSpirit 	Health
Foundation d/b/a CommonSpirit Health as a party, an organization that had
nothing 	to 	do 	with 	the 	facts 	of 	this 	case. 	Therefore, 	each 	of 	the
interrogatories 	[sic] 	responses 	and 	documents 	produced 	are 	solely
answered and produced by and on behalf of Penrose – not CommonSpirit.
CommonSpirit will not be doing any discovery unless otherwise ordered by
the Court to do so.
[Id. at 3].
1 Originally, the case proceeded before Judge Dominguez Braswell. [Doc. 4]. Upon the
Parties’ non-consent to the jurisdiction of a magistrate judge, [Doc. 13], this case was
reassigned to the Honorable Regina M. Rodriguez, [Doc. 15], who referred this case to
Judge Dominguez Braswell for non-dispositive matters, [Doc. 18]. This matter was later
reassigned to the Honorable S. Kato Crews upon his appointment, [Doc. 42], and
reassigned to the undersigned on April 11, 2024, [Doc. 52; Doc. 53].
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Then, during a phone call on March 18, 2024, Defendants raised a technical
nomenclature issue for the very first time. 	[Doc. 50 at 3].2 	Specifically, Defendants
informed Dr. Peddada’s counsel that the naming of “CommonSpirit Health Foundation
d/b/a CommonSpirit Health” is incorrect because CommonSpirit Health Foundation
(“CHF”), is a fundraising entity unrelated to the business of CommonSpirit. 	[Id.]. 	Thus,
the appropriate nomenclature is simply “CommonSpirit.” 	[Id.]. 	Dr. Peddada agreed to
amend the Complaint to correct the issue. [Id.].
Two days later, Judge Dominguez Braswell denied Defendants’ Partial Motion to
Dismiss, triggering the 14-day deadline for Defendants to file an answer to the Complaint.
[Doc. 46]. In anticipation of the instant Motion to Amend, Defendants sought and received
an extension of time to file an answer to the original Complaint. [Doc. 47]. Pursuant to
an order issued by Judge Crews on April 4, 2024, Defendants’ answer deadline remains
contingent on the Court’s acceptance of Dr. Peddada’s Amended Complaint. [Doc. 48].
The instant Motion to Amend was filed on April 9, 2024. [Doc. 50]. Dr. Peddada
asks for leave to amend his Complaint to correct the nomenclature issue and to
supplement his existing allegations regarding Defendants’ joint liability. 	See generally
[id.]. If the Court grants the Motion to Amend, Dr. Peddada also asks the Court to prohibit
Defendants from filing a motion to dismiss the Amended Complaint, on grounds that
Defendants should not get a “third bite at the apple.” 	[Id. at 14 (emphasis omitted)].
Defendants oppose the Motion. [Doc. 54]. The Court considers the Parties’ arguments
below.
2 Defendants do not dispute this fact in response to the Motion to Amend. See generally
[Doc. 54].
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LEGAL STANDARD
When a party files a motion to amend after the expiration of the deadline to amend
pleadings, the Court considers the motion pursuant to both Rule 15 and Rule 16 of the
Federal Rules of Civil Procedure. First, the Court determines whether the moving party
has demonstrated good cause to amend the Scheduling Order pursuant to Rule 16(b).
See Gorsuch, Ltd., B.C. v. Wells Fargo Nat’l Bank Ass’n, 771 F.3d 1230, 1242 (10th Cir.
2014). 	Then, the Court considers whether the amendment is appropriate under Rule
15(a). Id.
Rule 16(b) provides that a scheduling order “may be modified only for good cause
and with the judge’s consent.” Fed. R. Civ. P. 16(b)(4). “In practice, this standard requires
the movant to show the ‘scheduling deadlines cannot be met despite [the movant’s]
diligent efforts.’” Gorsuch, 771 F.3d at 1240 (quoting Pumpco, Inc. v. Schenker Int’l, Inc.,
204 F.R.D. 667, 668 (D. Colo. 2001) (alteration in original)). This burden is satisfied when,
for example, a party learns of new information through discovery, or when the governing
law has changed. Id. “Rule 16(b) does not focus on the bad faith of the movant, or the
prejudice to the opposing party. Rather, it focuses on the diligence of the party seeking
leave to modify the scheduling order to permit the proposed amendment.” Colo. Visionary
Acad. v. Medtronic, Inc., 194 F.R.D. 684, 687 (D. Colo. 2000).
Rule 15(a), on the other hand, provides that leave to amend “shall be freely given
when justice so requires.” Fed. R. Civ. P. 15(a). The Court may refuse leave to amend
upon a showing of undue delay, undue prejudice to the opposing party, bad faith or
dilatory motive, failure to cure deficiencies by amendments previously allowed, or futility
of amendment. Frank v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993). A general
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presumption exists in favor of allowing a party to amend its pleadings, see Foman v.
Davis, 371 U.S. 178, 182 (1962), and the non-moving party bears the burden of showing
that the proposed amendment is improper, Openwater Safety IV, LLC v. Great Lakes Ins.
SE, 435 F. Supp. 3d 1142, 1151 (D. Colo. 2020); see also Corp. Stock Transfer, Inc. v.
AE Biofuels, Inc., 663 F. Supp. 2d 1056, 1061 (D. Colo. 2009) (non-moving party has
burden of demonstrating futility). 	Whether to allow amendment is within the trial court’s
discretion. Burks v. Okla. Publ’g Co., 81 F.3d 975, 978–79 (10th Cir. 1996).
ANALYSIS
As explained above, the Court applies a two-part analysis to determine whether
amendment is appropriate in this case. 	Because Dr. Peddada seeks leave to amend
after the deadline set forth in the Scheduling Order, I must first consider his diligence
under Rule 16(b). Then, I turn to the second part of the two-step inquiry; that is, I consider
whether Defendants, as the non-moving party, have met their burden of showing that
amendment would be futile or would cause substantial prejudice, undue delay, or injustice
under Rule 15. See Openwater Safety IV, LLC, 435 F. Supp. 3d at 1151–52 .
I. 	Dr. Peddada Establishes Good Cause for Amendment After the Deadline.
Dr. Peddada’s Motion to Amend explains that he seeks to correct a technical
misnomer and supplement existing allegations regarding CommonSpirit’s joint liability.
[Doc. 50 at 6–8]. The Court considers whether Dr. Peddada has diligently pursued these
two amendments in turn.
Nomenclature. 	First, Dr. Peddada seeks to replace “CommonSpirit Health
Foundation 	d/b/a 	CommonSpirit 	Health” 	with 	“CommonSpirit 	Health” 	based 	on
information provided by Defendants for the first time on March 18, 2024. 	[Id. at 3].
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Defendants concede the timing of this disclosure, but nevertheless fault Dr. Peddada for
failing to independently discover the nomenclature issue earlier in this case. [Doc. 54 at
1–2]. 	Specifically, Defendants assert that Dr. Peddada’s failure to conduct “basic
research” on various public websites warrants denial of the Motion to Amend. [Id.]. The
Court respectfully disagrees.
Dr. Peddada rebuts Defendants’ argument with persuasive authority to the
contrary. [Doc. 56 at 2–3 (citing Barrett v. Qual-Med, Inc., 153 F.R.D. 653, 655 (D. Colo.
1994) and cases applying Barrett in the Rule 16(b) context)]. 	Rather than wait to raise
the nomenclature issue only after the deadline for amendment of pleadings has passed,
“the normal, and decent, procedure in situations such as this is to raise the matter by a
telephone call notifying opposing counsel she has sued the wrong entity, so that a
correction can be made with a minimum of wasted time and expense.” 	See Barrett v.
Qual-Med, Inc., 153 F.R.D. 653, 655 (D. Colo. 1994); see also Pears v. Mobile Cnty., 645
F. Supp. 2d 1062, 1086 (S.D. Ala. 2009) (applying Barrett and concluding that “[i]t would
be manifestly unjust to preclude [plaintiff] from correcting the misnomer in his Complaint
that defendants concealed from him until after the deadline for amending pleadings had
passed”); EEOC v. AutoNation USA Corp., No. CV 05-1575-PHX-ROS, 2007 WL
9724419, at *2 (D. Ariz. May 3, 2007) (granting motion to amend where defendant waited
17 months after the complaint was filed to “clearly articulate[] its belief that it was not the
proper defendant,” noting that had the defendant “alerted Plaintiff at the start of this case,
or filed a motion to dismiss, the complaint could have been amended and the case
proceeded against the proper party from the beginning”). While the decisions in Barrett,
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Pears, and AutoNation USA are not binding on this Court, I nevertheless find their
reasoning persuasive and applicable to the instant Motion.
Here, Defendants do not dispute that they first raised the nomenclature issue
relating to CommonSpirit and CHF on March 18, 2024. [Doc. 50 at 3–4; Doc. 54 at 1–3;
Doc. 56 at 4 n.1]. Dr. Peddada sought leave to amend his Complaint approximately three
weeks later. 	[Doc. 50]. 	The Court finds that Dr. Peddada acted diligently in moving to
amend on this basis. See Swanson v. N. Light Specialty Ins. Co., No. 20-cv-03778-RMR-
NRN, 2022 WL 500294, at *3 (D. Colo. Feb. 18, 2022) (the plaintiff acted diligently in
moving to amend five weeks after learning of new information that formed the basis of the
amendment). Accordingly, Dr. Peddada has demonstrated good cause for his request to
amend the Complaint to correct the late-disclosed nomenclature issue after the deadline
for amendment of pleadings.
Joint Liability. 	Next, the Court considers Dr. Peddada’s diligence in seeking
leave to supplement his joint liability related allegations. 	Dr. Peddada explains that he
seeks to include these allegations only now because, inter alia, (1) Defendants never
sought dismissal of CommonSpirit as an improper party, and (2) CommonSpirit refuses
to participate in discovery in this case. 	[Doc. 50 at 7]. 	The Court finds both arguments
persuasive.
While Defendants indicated in the Proposed Scheduling Order that CommonSpirit
is “not the proper party,” [Doc. 14 at 3], Defendants elected not to include this argument
in their subsequently filed Partial Motion to Dismiss, see generally [Doc. 21]. According
to Dr. Peddada, Defendants’ failure to seek early dismissal of CommonSpirit “indicat[ed]
that they believed the Complaint plausibly alleged joint liability,” so “until now, [he] saw
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no need for additional allegations on the topic.” [Doc. 50 at 7]. Given that the naming of
an improper party is an issue that can and “should be promptly and clearly raised by a
timely motion to dismiss,” Barrett, 153 F.R.D. at 655, the Court finds that Defendants’
failure to do so supports the inference drawn by Dr. Peddada.
Moreover, Dr. Peddada explains that his efforts to supplement his existing
allegations 	regarding 	CommonSpirit’s 	joint 	liability 	were 	prompted 	by 	Defendants’
discovery conduct, including Defendants’ objections to Dr. Peddada’s First Set of
Requests for Production of Documents served on March 6, 2024. [Doc. 50 at 7–8; Doc.
50-3 at 3 (“Defendants collectively object to inclusion of . . . CommonSpirit Health as a
party . . . . 	CommonSpirit will not be doing any discovery unless otherwise ordered by
the Court to do so.”)]. In other words, the need for supplemental joint liability allegations
became apparent only after Defendants refused to engage in discovery on behalf of
CommonSpirit. 	See, e.g., [Doc. 50-3 at 3]. 	Because Dr. Peddada diligently filed the
instant Motion approximately one month later—with a contemporaneously filed proposed
First Amended Complaint that includes robust supplemental allegations directed at
resolving the Parties’ dispute over CommonSpirit’s participation in this lawsuit—the Court
finds good cause to modify the Scheduling Order pursuant to Rule 16(b). See Swanson,
2022 WL 500294, at *3.
II. 	Defendants Fail to Show that Amendment is Improper under Rule 15(a).
Having decided that good cause exists for amendment under Rule 16, the Court
must decide whether Dr. Peddada’s proposed amendment is appropriate under Rule
15(a). 	Defendants state that they are unopposed to an amendment to correct the
nomenclature issue by removing “CommonSpirit Health Foundation d/b/a CommonSpirit
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Health” as a defendant. [Doc. 54 at 1]. Defendants do, however, oppose any additional
amendment. [Id. at 2].
As mentioned above, the Court may deny leave to amend based on undue delay,
undue prejudice to opposing parties, bad faith, failure to cure deficiencies by amendments
previously allowed, or futility of amendment. 	Frank, 3 F.3d at 1365. 	Defendants, who
bear the burden of demonstrating that the requested amendment is improper on one of
these bases, see Openwater Safety IV, LLC, 435 F. Supp. 3d at 1151, primarily argue
that the Motion to Amend is untimely, [Doc. 54 at 2]. For the reasons discussed above,
the Court finds that Dr. Peddada did not unduly delay filing the Motion to Amend.
Defendants’ remaining arguments are equally unavailing.
Notably, Defendants’ characterization of CommonSpirit as a “new party” named
“late in the litigation,” [id. at 2], is belied by the record, including Defendants’ positional
statement 	set 	forth 	in 	the 	Scheduling 	Order, 	see 	[Doc. 	25 	at 	3 	(asserting 	that
CommonSpirit is an improperly named party, with no mention of CFH’s role in the case)].
And Dr. Peddada’s proposed amendments do not assert any new claims or theories of
recovery. 	Instead, Dr. Peddada seeks to clarify and bolster existing joint liability
allegations to “more accurately allege Defendants’ corporate relationships” following a
“significant corporate shakeup” that he “anticipated” in his original Complaint—a move
prompted by CommonSpirit’s refusal to meaningfully participate in this lawsuit. [Doc. 50
at 	7]. 	Thus, 	“the 	addition 	of 	potentially 	clarifying 	facts 	does 	not 	unfairly 	affect
[Defendants’] ability to defend this lawsuit.” See Galvan v. First Vehicle Servs., Inc., No.
19-cv-02143-PAB-KMT, 2020 WL 1166857, at *4 (D. Colo. Mar. 11, 2020).
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Finally, while the Court notes that Penrose has already filed a Motion for Summary
Judgment, “any prejudice to [Penrose] is slight because [it] will be able to file substantially
similar briefing” in response to the amended pleading, Faircloth v. Hickenlooper, No. 18-
cv-01249-RM-STV, 2019 WL 1002935, at *3 (D. Colo. Mar. 1, 2019), which merely seeks
to correct a late-disclosed nomenclature issue and supplement existing allegations
regarding joint liability. 	Thus, Defendants have not demonstrated any bad faith, undue
delay, undue prejudice, or futility grounds sufficient to justify denial of Dr. Peddada’s
proposed amendments. Accordingly, the Court will grant the Motion to Amend.
III. 	Dr. Peddada’s Request for Additional Relief
Defendants indicate that if Plaintiff’s Motion to Amend is granted, they will file a
motion to dismiss setting forth the relevant factual and legal arguments at that time. [Doc.
54 at 3]. Dr. Peddada asks the Court to enter an order prohibiting Defendants from filing
a motion to dismiss the Amended Complaint because Defendants should not get “three
bites at the apple.” 	[Doc. 50 at 14 (emphasis omitted)]. 	Given the fact that Penrose
already filed a Motion for Summary Judgment, [Doc. 63]; extensive discovery has been
taken and is due no later than November 15, 2024; and the facts to dispute a theory of
joint 	employment 	and/or 	other 	defenses 	lie 	primarily 	with 	Defendants 	and/or
CommonSpirit, this Court finds that it would be most expeditious—and would promote
judicial economy—for Defendants to raise any deficiencies that they would otherwise
raise in the context of a motion to dismiss in a forthcoming motion for summary judgment.
Fed. R. Civ. P. 1.
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CONCLUSION
For the foregoing reasons, it is ORDERED that:
(1) 	Plaintiff Dr. Anuj Peddada’s Motion for Leave to File First Amended
Complaint, [Doc. 50], is GRANTED;
(2) 	On or before November 1, 2024, Plaintiff shall file a clean copy of his First
Amended Complaint as a separate docket entry;
(3) 	Defendant 	Catholic 	Health 	Initiatives 	Colorado 	d/b/a 	Centura 	Health-
Penrose-St. Francis Health Services’ Motion for Summary Judgment, [Doc.
63], is DENIED without prejudice as moot;3 and
(4) 	Defendants SHALL FILE a response to Plaintiff’s First Amended Complaint
on or before November 15, 2024.
3 The Amended Complaint renders moot Penrose’s pending Motion for Summary
Judgment, which is directed at the original Complaint. [Doc. 63]. “[I]t is well established
that an amended complaint ordinarily supersedes the original and renders it of no legal
effect.” Davis v. TXO Prod. Corp., 929 F.2d 1515, 1517 (10th Cir. 1991) (quotation marks
omitted); see also 6 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal
Practice 	& 	Procedure 	§ 	1476 	(3d 	ed. 	2010) 	(“A 	pleading 	that 	has 	been
amended . . . supersedes the pleading it modifies. . . . Once an amended pleading is
interposed, the original pleading no longer performs any function in the case.”). 	Thus,
any motion directed at the original complaint is rendered moot by the filing of an amended
complaint. 	Gotfredson v. Larsen LP, 432 F. Supp. 2d 1163, 1172 (D. Colo. 2006).
Although the arguments raised by the Motion for Summary Judgment apply to the
forthcoming First Amended Complaint, this Court anticipates that Defendants and
CommonSpirit may have additional arguments directed at the First Amended Complaint
and thus, a single dispositive motion due no later than December 16, 2024, [Doc. 43], is
appropriate.
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DATED: October 31, 2024 	BY THE COURT:
_________________________
Nina Y. Wang
United States District Judge
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