McArtor et al v. Valsoft Corporation Inc et al

1
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF WYOMING
LISA K. MCARTOR, in her capacity as
Personal Representative of the Estate of
Weston D. McArtor, deceased; BEI
SERVICES, INC.,
Plaintiffs,
vs. 	Case No. 1:23-CV-00136-SWS
VALSOFT CORPORATION, INC.;
ASPIRE USA, LLC, d/b/a ASPIRE
SOFTWARE,
Defendants.
ORDER ON PLAINTIFFS’ MOTION FOR LEAVE TO FILE AMENDED
COMPLAINT TO CONFORM TO THE EVIDENCE PURSUANT TO FED. R.
CIV. P. 15(b)
This matter is before the Court on Lisa K. McArtor and BEI Services, Inc.’s (“BEI”)
(collectively “Plaintiffs”) Motion for Leave to File Amended Complaint to Conform to the
Evidence Pursuant to Fed. R. Civ. P. 15(b) (“Motion”). ECF No. 82. After reviewing the
Motion, 	Valsoft 	Corporation, 	Inc. 	(“Valsoft”) 	and 	Aspire 	USA, 	LLC’s 	(“Aspire”)
(collectively “Defendants”) Response (ECF No. 91), the applicable law, and being
otherwise fully advised, the Motion shall be DENIED for the reasons outlined herein:
B ACKGROUND
This action involves the sale of Plaintiffs’ business, Nexera, to Defendants. See ECF
No. 1. Prior to the acquisition, Nexera was in the business of “developing and providing
data analytics software for performance measurement and benchmarking of service
Case 1:23-cv-00136-SWS Document 93 Filed 01/31/25 Page 1 of 12

2
operations including, but not limited to, the printing industry.” Id. ¶ 6. Defendants, on the
other hand, “specialize in the acquisition and development of software companies in
vertical markets.” Id. ¶ 8.
In 2022, Weston D. McArtor (“Mr. McArtor”), founder and president of BEI,
“began 	an 	extensive 	search 	to 	find 	a 	buyer 	to 	purchase 	and 	continue 	[Nexera’s]
operations.” Id. ¶¶ 16–17. Ultimately, he found Valsoft and “initiated discussions wherein
Defendants would purchase [Nexera], retain the employees and continue its operations.”
Id. ¶ 19. These negotiations culminated in the parties entering into an Asset Purchase
Agreement (“APA”). See ECF No. 1-2. Under the APA, Defendants purchased Nexera,
and the majority of BEI’s assets for $3.5 million. Id. The APA also contained a provision
allowing “BEI to receive future contingent payments and earnout payments if Nexera met
certain performance goals for Defendants after the acquisition.” ECF No. 79 at 2.
Additionally, “BEI and Aspire entered into a Consulting Agreement…by which Mr.
McArtor would serve as a part-time consultant on business related matters for a six-month
term with a renewal option thereafter.” Id. (citing ECF No. 1-6).
In the instant suit, Plaintiffs claim Defendants breached the APA by fraudulently
conspiring and intentionally underperforming, thereby thwarting BEI’s ability to receive
the contingent and earnout payments. ECF No. 1 ¶¶ 82–86. Further, Plaintiffs allege that
Defendants breached the Consulting Agreement by terminating Mr. McArtor as a post-
acquisition consultant less than six months after entering the Consulting Agreement. Id. ¶
Case 1:23-cv-00136-SWS Document 93 Filed 01/31/25 Page 2 of 12

3
72. In sum, Plaintiffs asserted nine causes of action in both contract and tort.1 However, on
January 10, 2025, the Court entered its Order Denying Plaintiffs’ Motion for Partial
Summary Judgment and Granting in Part and Denying in Part Defendants’ Motion for
Partial Summary Judgment (“Summary Judgment Order”). ECF No. 79. Therein, the Court
granted summary judgment on Counts 5, 6, 7, and 9. See id. Further, the Court held that a
request for attorney’s fees under the APA is not an independent cause of action, and as
such, it dismissed Count 8. Id. The Court’s decision resulted in only Count 1 (Breach of
the APA) and Count 2 (Breach of the Consulting Agreement) proceeding to trial. Id. at 21.
Included in the Court’s Summary Judgment Order was a finding that Plaintiffs’
theory that Defendants breached Section 4.4(ii) of the APA by allegedly failing to cross-
sell was not contained in the Complaint and not properly before the Court. See id. On
November 27, 2024, Defendants filed their Motion for Partial Summary Judgment (ECF
No. 61) objecting to the cross-selling theory, for it was not included in Plaintiffs’
Complaint. ECF No. 62 at 11–12. Plaintiffs contested this assertion—arguing that failure
to cross-sell was within the scope of the case, contemplated by the APA, supported by the
evidence, and a triable issue. See ECF No. 69 at 12–14. Ultimately, the Court found that
“[t]he failure-to-cross-sell theory was never alleged in the complaint, nor can it be said to
be fairly within the scope of the complaint.” ECF No. 79 at 13. The Court also noted that
1 Count 1: Beach of the APA; Count 2: Breach of the Consulting Agreement (alleged only against Aspire); Count 3:
Breach of an Oral Contract, or Promissory Estoppel, (Previously Dismissed); Count 4: Declaratory Judgment
concerning the APA (Previously Dismissed); Count 5: Fraud; Count 6: Civil Conspiracy; Count 7: Negligent
Misrepresentation (in the alternative as to Fraud and Civil Conspiracy); Count 8: Attorney Fees under the APA; and
Count 9: Punitive Damages.
Case 1:23-cv-00136-SWS Document 93 Filed 01/31/25 Page 3 of 12

4
Plaintiffs had never sought to amend their Complaint during the pendency of this action to
include such a theory. Id.
Following entry of the Court’s Summary Judgment Order, Plaintiffs filed the instant
Motion seeking to amend their Complaint under Federal Rule of Civil Procedure 15(b) to
include allegations that Defendants committed to cross-sell Nexera but failed to do so, “to
clarify the APA provisions and facts giving rising to the breach of contract theory in Count
1[,] and to allow Plaintiffs to assert failure to cross-sell as a basis for their breach of contract
action against Defendants.” ECF No. 82 at 6. In their Response, Defendants argue that
“[t]his eleventh-hour amendment should be denied as impermissible under the rules and
case law, untimely, prejudicial to Defendants, and futile.” ECF No. 91 at 2. Further,
Defendants contend that they never “expressly consented to Plaintiffs’ attempt to conform
the pleadings to include new claims or issues.” Id. at 3. And to the extent that Rule 15(b)
allows implicit amendment, Defendants argue that Plaintiffs have not met their burden. Id.
at 3–4.
LEGAL STANDARDS
Federal Rule of Civil Procedure 15(a) provides for the amendment of pleadings,
enabling the parties “to assert matters that were overlooked or were unknown at the time
the party interposed the original complaint or answer.” 6 Charles Alan Wright & Arthur R.
Miller, Federal Practice and Procedure § 1473 (3d ed. June 2024 update); F ED . R. CIV . P.
15(a). While Rule 15(a) does not enumerate permissible bases for amendment, courts
frequently allow amendment for myriad reasons. See FED . R. CIV . P. 15(a)(2) (instructing
that leave to amend should be freely granted when justice so requires). In fact, “[r]effusing
Case 1:23-cv-00136-SWS Document 93 Filed 01/31/25 Page 4 of 12

5
leave to amend is generally only justified 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) (citations omitted); Foman v. Davis, 371 U.S. 178, 182
(1962). Untimeliness alone is insufficient to deny leave to amend; however, “where the
party seeking amendment knows or should have known of the facts upon which the
proposed amendment is based but fails to include them in the original complaint,
the motion to amend is subject to denial.” State Distribs., Inc. v. Glenmore Distilleries Co.,
738 F.2d 405, 416 (10th Cir. 1984) (citing Svoboda v. Trane, 495 F. Supp. 367 (E.D. Mo.
1979), aff’d, 655 F.2d 898 (8th Cir. 1981)).
While Rule 15(a) is the preferred mechanism to amend the pleadings prior to trial,
“there are instances in which the need to [amend] does not become apparent until so close
to trial, or after the trial has actually commenced, that the request for a change can be made
only when the trial is under way.” 6A Charles Alan Wright & Arthur R. Miller, Federal
Practice and Procedure § 1491 (3d ed. June 2024 update). For such scenarios, Rule 15(b)
provides two instances where the complaint may be amended:
(1) Based on an Objection at Trial. 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.
(2) For Issues Tried by Consent. When an issue not raised by the pleadings
is tried by the parties’ express or implied consent, it must be treated in all
respects as if raised in the pleadings. A party may move—at any time, even
Case 1:23-cv-00136-SWS Document 93 Filed 01/31/25 Page 5 of 12

6
after judgment—to amend the pleadings to conform them to the evidence and
to raise an unpleaded issue. But failure to amend does not affect the result of
the trial of that issue.
F ED . R. CIV . P. 15(b).2 “Rule 15(b)(2) applies only when the defendant has consented to
trial of the non-pled factual issues, and application of Rule 15(b)(2) requires that a party
expressly or impliedly consent to a trial on an unpled claim and not be prejudiced by doing
so.” Farabaugh v. Isle, Inc., Civil Action No. 20-cv-03644-CNS-STV, 2024 U.S. Dist.
LEXIS 79235, at *7 (D. Colo. Mar. 6, 2024) (magistrate’s report and recommendation
adopted by district judge) (cleaned up) (quoting Dan Ryan Builders, Inc. v. Crystal Ridge
Dev., Inc., 783 F.3d 976, 983 (4th Cir. 2015)). “Implied consent exists ‘where the parties
recognized that the issue entered the case at trial and acquiesced in the introduction of
evidence on that issue without objection.’” Acosta v. United States, No. 15-CV-0530
SMV/KRS, 2017 U.S. Dist. LEXIS 135972, 2017 WL 3701614, at *6 (D.N.M. Aug. 24,
2017) (quoting Hardin v. Manitowoc-Forsythe Corp., 691 F.2d 449, 457 (10th Cir. 1982)).
“A party impliedly consents to the trial of an issue not contained within the pleadings either
by introducing evidence on the new issue or by failing to object when the opposing party
introduces such evidence.” Green Country Food Mkt., Inc. v. Bottling Grp., LLC, 371 F.3d
1275, 1280 (10th Cir. 2004).
ORDER OF THE C OURT
I. 	Defendants have not expressly or impliedly consented to amendment.
2 Rios v. Bigler, 67 F.3d 1543, 1551 (10th Cir. 1995) (“The decision to grant or deny an amendment under Rule 15(b)
is within the discretion of the district court and will not be disturbed on appeal absent an abuse of that discretion.”).
Case 1:23-cv-00136-SWS Document 93 Filed 01/31/25 Page 6 of 12

7
To begin, the Court notes that Plaintiffs do not differentiate between Rule 15(b)(1)
and (b)(2) in their Motion. However, it appears that they tacitly invoke the latter provision.
Further, the Court finds that any argument made under Rule 15(b)(1) is premature, as the
terms of that provision explicitly contemplate amendment during trial. See F ED . R. CIV . P.
15(b)(1).
To the extent that Rule 15(b)(2) even applies at the pretrial stage,3 the Court finds
Defendants have not expressly consented to Plaintiffs’ attempt to amend the pleadings. See
ECF No. 91 at 3–6. Therefore, the issue presented is whether Defendants impliedly
consented to amendment. As articulated in Eller v. Trans Union, LLC, there are two ways
in which a party can impliedly consent: (1) introducing evidence on the issue or (2) failing
to object when the opposing party introduces such evidence. 739 F.3d 467, 479 (10th Cir.
2013) (quoting Green Country Food Mkt., 371 F.3d at 1280). Plaintiffs argue that “the
extensive discovery already completed on the cross-selling theory involving MPS, and the
parties’ dueling expert reports and testimony on the cross-selling theory,” equates to
implied consent. ECF No. 82 at 6.
3 There is some incongruity within this circuit as to whether Rule 15(b) is applicable to amend the pleadings prior to
trial. ACE USA v. Union Pac. R.R. Co., No. 09-2194-KHV, 2011 U.S. Dist. LEXIS 141228, at *9 (D. Kan. Dec. 7,
2011) (“A circuit split exists…with respect to whether Rule 15(b) applies at the pretrial stage of litigation, and the
Tenth Circuit has not squarely addressed the issue.”); compare Faustin v. City and Cnty. of Denver, Colo., 423 F.3d
1192, 1196 (10th Cir. 2005) (finding plaintiff impliedly consented to amendment under Rule 15(b) during the
summary judgment stage), with Gold v. Local 7 United Food & Commer. Workers Union, 159 F.3d 1307, 1309 (10th
Cir. 1998) (“[The] Rule 15(b) motion was made before trial, when no issues had or could have been tried. Rule 15(b)
seems a totally inappropriate vehicle for a motion to amend prior to trial.”); see also Ramos v. State Farm Mut. Ins.
Co., Civil Action No. 19-cv-01634-KMT, 2020 U.S. Dist. LEXIS 109072, at *13, n. 3 (D. Colo. June 22, 2020)
(“Tenth Circuit case law is unclear as to whether Rule 15(b)(2) applies even at the summary judgment stage.” (citing
Ahmad v. Furlong, 435 F.3d 1196, 1203 n.1 (10th Cir. 2006))). It seems clear to this Court that amendment under
Rule 15(b)(1) is inapplicable at the pretrial stage. However, as there is some precedent in this circuit allowing Rule
15(b)(2) to serve as a mechanism to amend the pleadings before trial, the Court will assume as much and proceed with
its analysis.
Case 1:23-cv-00136-SWS Document 93 Filed 01/31/25 Page 7 of 12

8
Conversely, Defendants argue that implicit consent via discovery is not recognized
by Tenth Circuit caselaw. ECF No. 91 at 3–4. The Court agrees. Under Eller, the party
resisting amendment must have either introduced evidence on the issue or failed to object
to the introduction of such evidence. See Eller, 739 F.3d at 479; Farabaugh, 2024 U.S.
Dist. LEXIS 79235, at *7 (“Plaintiff argues that Defendants have impliedly consented to
trying the issue through written 	discovery 	and 	depositions. 	This is 	not a 	method
of implied consent recognized in this Circuit.” (citation and internal quotation marks
omitted)). Here, trial in the above-captioned matter has yet to occur. Accordingly, neither
party has introduced any evidence at trial relating to Plaintiffs’ breach of contract claim
under the APA, including any evidence regarding Defendants’ alleged failure to cross-sell
Nexera. In addition, since trial has yet to occur, Defendants have not had to object to the
introduction of any evidence relating to cross-selling Nexera but will likely do so as
evidenced by their objections to this Motion. See ECF No. 82 at 2; ECF No. 62 at 11–12.
Additionally, Plaintiffs point to their expert raising the failure to cross-sell issue in
his expert report as a basis for implied amendment. ECF No. 82 at 4. But as this Court
already pointed out, a party cannot implicitly amend their pleadings by introducing a new
theory via an expert’s report.4 ECF No. 79 at 13 (quoting Pacheco v. State Farm Mut. Auto.
Ins. Co., No. 23-CV-00305-NYW-SBP, 2024 WL 3834166, at *12 (D. Colo. Aug. 15,
2024) (“[A] plaintiff cannot amend [their] pleading by introducing new theories in an
expert report.”). Further, Plaintiffs’ arguments that the discovery in this case abounds with
4 Additionally, the Court notes that Defendants expressly objected to the entirety of Plaintiffs’ expert’s report via their
Motion to Strike Plaintiffs’ Expert Brian Lappen. ECF No. 59.
Case 1:23-cv-00136-SWS Document 93 Filed 01/31/25 Page 8 of 12

9
discussions of the cross-selling theory, ECF No. 82 at 4–6, is equally insufficient to
demonstrate implied consent to amendment, for “[i]mplied consent cannot…be based on
the introduction of evidence that is relevant to an issue already in the case if the party
presenting the evidence does not indicate that it intended to raise a new issue.” ACE USA
v. Union Pac. R.R. Co., No. 09-2194-KHV, 2011 U.S. Dist. LEXIS 141228, at *12 (D.
Kan. Dec. 7, 2011) (citing Green Country Food Mkt., 371 F.3d at 1280). Plaintiffs have
argued that cross-selling is relevant to “multiple issues” in this action. E.g., ECF No. 83 at
10. As such, prior discovery concerning cross-selling cannot serve as a basis to impliedly
amend the Complaint to include Plaintiffs’ wholly new theory that Defendants breached
Section 4.4(ii) of the APA by failing to cross-sell.5 Therefore, the Court finds that the
inclusion of the cross-selling theory throughout discovery, by experts or otherwise, is an
insufficient basis to show implicit amendment to the Complaint. See Koch v. Koch Indus.,
203 F.3d 1202, 1217 	(10th Cir. 2000). Accordingly, to the extent Plaintiffs seek
amendment under Rule 15(b) to assert a stand-alone claim for breach of Section 4.4(ii) of
the APA by failing to cross-sell, their Motion is DENIED.
II. Plaintiffs’ Motion is untimely and lacks an adequate explanation or basis for a
finding of excusable neglect.
In finding Rule 15(b) unsuitable to grant amendment, the Court turns next to Rule
15(a). “Rule 15(a) does not restrict a party’s ability to amend its complaint to a particular
5 See ECF No. 79 at 12–13 (“Plaintiffs’ attempt to shoehorn in a new theory of recovery on Count 1 based on
Defendant’ alleged failure to cross-sell is not well taken. The theory that Defendants breached Section 4.4(ii) of the
APA by failing to cross-sell is distinct from the theory stated in the complaint that Defendants breached Section 4.4(i)
by taking action that ‘would likely have a Material Adverse Effect on the Business or the ARR’ because the theories
involve different clauses of the APA and different factual allegations.”).
Case 1:23-cv-00136-SWS Document 93 Filed 01/31/25 Page 9 of 12

10
stage in the action.” Minter v. Prime Equip. Co., 451 F.3d 1196, 1205 (10th Cir. 2006).
However, as the Supreme Court and the Tenth Circuit have held, undue delay, failure to
cure deficiencies, and undue prejudice to the opposing party are all factors trial courts
should consider in determining whether leave to amend should be granted. Id. at 1204
(quoting Foman, 371 U.S. at 182). “The longer the delay, ‘the more likely the motion to
amend will be denied, as protracted delay, with its attendant burdens on the opponent and
the court, is itself a sufficient reason for the court to withhold permission to amend.’” Id.
(quoting Steir v. Girl Scouts of the USA, 383 F.3d 7, 12 (1st Cir. 2004)).
In the Tenth Circuit, the “undue delay” inquiry “focuses primarily on the reasons
for the delay.” Id at 1206. And denying amendment is justified “when the [movant] has no
adequate explanation for the delay.” Frank, 3 F.3d at 1365–66. Often, district courts will
find a lack of adequate explanation or excusable neglect 	when 	the party seeking
amendment knew or should have known of the facts giving rise to the prospective
amendment but failed to include them in the complaint or thereafter. See, e.g., Birmingham
v. Experian Info. Sols., Inc., 633 F.3d 1006, 1020–21 (10th Cir. 2011) (“[A] district court
has discretion to deny a motion to amend as untimely when the movant’s delay is
unexplained.”); Durham v. Xerox Corp., 18 F.3d 836, 840 (10th Cir. 1994) (“[U]nexplained
delay alone justifies the district court’s discretionary decision.”); Fed. Ins. Co. v. Gates
Learjet Corp., 823 F.2d 383, 387 (10th Cir. 1987) (“[C]ourts have denied leave to amend
where the moving party was aware of the facts on which the amendment was based for
some time prior to the filing of the motion to amend.”); State Distribs., Inc. v. Glenmore
Distilleries Co., 738 F.2d 405, 416 (10th Cir. 1984).
Case 1:23-cv-00136-SWS Document 93 Filed 01/31/25 Page 10 of 12

11
The instant Motion was filed on January 16, 2025, less than a month before trial.
See ECF No. 82. The substantive explanation for the late filing is as follows:
Plaintiffs were unaware Defendants considered the failure to cross-sell claim
not within the pleadings until receipt of Defendants’ summary judgment
briefing filed on November 27, 2024. 	Plaintiffs reasonably interpreted
Defendants’ production of hundreds of documents related to MPS Monitor;
making MPS Monitor’s former CEO and owner, Nicola de Blasi, available
for deposition; production of a corporate representative to address the topic
of MPS Monitor and cross-selling; and retention of an expert and filing an
expert report rebutting Plaintiffs’ expert opinions on Defendants’ failure to
cross-sell—all without objection on the ground failure to cross sell was not
within the pleadings—as Defendants’ consent to trial on these matters.
Id. at 5–6.
If we take Plaintiffs at their word, they did not know of the deficiency in the
pleadings—i.e., the omission of a theory that Defendants breached Section 4.4(ii) of the
APA by failing to cross-sell—until November 27, 2024. See id. However, the reason why
Plaintiffs waited approximately seven weeks thereafter to file the instant Motion remains
unclear. Undoubtedly, Plaintiffs have been aware of Section 4.4(ii) of the APA since the
inception of this action if not earlier. See ECF No 1-2 at 16 (Plaintiffs included a copy of
the APA, including sections 4.4(i) and (ii) with their Complaint); ECF No. 91 at 6. And by
their own admission, discussions of cross-selling featured heavily throughout discovery.
See ECF No. 82 at 4. Here, the record clearly shows that Plaintiffs knew or should have
known the basis for the amendment they now seek but failed to include such a theory in
their Complaint and failed to seek amendment in a timely fashion thereafter. See State
Distribs., Inc., 738 F.2d at 416. The Court finds that nothing in the record, or set forth in
Plaintiffs’ Motion, provides an adequate explanation or basis to find excusable neglect for
Case 1:23-cv-00136-SWS Document 93 Filed 01/31/25 Page 11 of 12

12
this delay. Therefore, to the extent Plaintiffs move for amendment under Rule 15(a), their
Motion is DENIED.
C ONCLUSION
Based upon the preceding, the Court finds that Rule 15(b)(1) is an inappropriate
vehicle to amend the Complaint, Defendants did not expressly or impliedly consent to
amendment under Rule 15(b)(2), and Plaintiffs have not provided an adequate explanation
for their untimely Motion under Rule 15(a). Therefore, Plaintiffs’ Motion (ECF No. 82) is
hereby DENIED.
Dated this 31st day of January, 2025.
Scott P. Klosterman
United States Magistrate Judge
Case 1:23-cv-00136-SWS Document 93 Filed 01/31/25 Page 12 of 12