                     REVISED JANUARY 15, 2003
                  UNITED STATES COURT OF APPEALS
                       For the Fifth Circuit



                           No. 02-10090


  S&W ENTERPRISES, L.L.C., a Nevada Limited Liability Company,

                                              Plaintiff-Appellant,

                              VERSUS

 SOUTHTRUST BANK OF ALABAMA, NA, an Alabama Banking Corporation,

                                               Defendant-Appellee.



           Appeal from the United States District Court
       For the Northern District of Texas, Dallas Division
                          January 6, 2003


Before HIGGINBOTHAM, DUHÉ, and DeMOSS, Circuit Judges.

DUHÉ, Circuit Judge:

     Appellant S&W Enterprises, L.L.C. appeals from the district

court’s order granting summary judgment in favor of Appellee

SouthTrust Bank of Alabama, N.A., arguing that the court abused its

discretion in denying Appellant leave to amend its complaint.

Appellant argues also that fact issues preclude summary judgment.

We affirm.

                            BACKGROUND

     SouthTrust Bank of Alabama (“SouthTrust”) sold to Daiwa Bank

Limited (“Daiwa”) a $10 million participation in a $24 million loan

SouthTrust had issued to Medical Technology Systems, Inc.      The
agreement between SouthTrust and Daiwa (“Participation Agreement”)

prohibited Daiwa from assigning its interest without SouthTrust’s

consent,   which    consent   SouthTrust       agreed     not    to   withhold

unreasonably.      Thereafter,   Daiwa   and    S&W     Enterprises,    L.L.C.

(“S&W”) entered into an agreement (“Purchase Agreement”) whereby

S&W would acquire Daiwa’s participation interest.               S&W’s obligation

to purchase and Daiwa’s obligation to sell the participation

interest were contingent on SouthTrust’s consent to the assignment

agreement (“Assignment”) that would consummate the purchase.              When

the parties sought SouthTrust’s consent to the Assignment, S&W

alleges that SouthTrust imposed unreasonable conditions before it

would consent.     S&W refused to meet the conditions, and SouthTrust

refused to consent to the Assignment.           S&W sued SouthTrust for

breach of contract, alleging that it was a third party beneficiary

to the Participation Agreement, and tortious interference with

prospective advantage, naming the Assignment.

     The district court, on SouthTrust’s 12(b)(6) motion, dismissed

S&W’s breach of contract claims, leaving S&W to pursue only its

interference with prospective advantage claim.            The court’s Third

Amended Scheduling Order, issued March 7, 2001, set the deadline

for amendment of pleadings at June 11, 2001 and the deadline for

completion of discovery at October 5, 2001.             Trial was scheduled

for the court’s February 4, 2002 docket.

     On March 8, 2001, the Texas Supreme Court decided Wal-Mart

Stores, Inc., v. Sturges, 52 S.W.3d 711 (Tex. 2001).                   Sturges

                                   2
clarified that tortious interference with prospective advantage

requires a plaintiff to show that the defendant’s conduct, rather

than     being   a   lawful   means       to   obtain    the    advantage,    was

“independently tortious or wrongful.”             Id. at 717.

       On September 25, 2001, more than three months after the

deadline for amendment of pleadings and more than six months after

Sturges was decided, S&W moved for leave to amend, ostensibly to

conform    its   pleadings    to    the   requirements    of    Sturges.      S&W

acknowledged that it was aware of the Sturges decision before the

deadline for amendment of pleadings, but explained that its counsel

failed to understand the impact of the case on S&W’s interference

with prospective advantage claim until after the deadline expired.

In fact, S&W’s proposed amended complaint added a new cause of

action, interference with contract, involving a contract not before

named in the pleadings, the Purchase Agreement between S&W and

Daiwa.

       Before the district court ruled on S&W’s motion to amend,

SouthTrust filed its motion for summary judgment on the tortious

interference with prospective advantage claim asserted in the

original complaint.      In the same opinion and order, the district

court denied S&W leave to amend and granted summary judgment to

SouthTrust.      Emphasizing that S&W offered no adequate explanation

for its delay in seeking leave to amend, the court denied leave

because S&W’s motion was untimely and amendment would unduly

prejudice     SouthTrust,     who   would      require   more    discovery,   or

                                          3
alternatively, unnecessarily delay the trial.      The court then

granted summary judgment, finding that S&W failed to demonstrate a

fact issue suggesting SouthTrust’s unreasonableness in refusing to

consent to the Assignment.   S&W timely appeals.

                             DISCUSSION

I. DENIAL OF S&W’S MOTION FOR LEAVE TO AMEND

     We review for abuse of discretion the district court’s denial

of leave to amend.   Herrmann Holdings Ltd. v. Lucent Technologies

Inc., 302 F.3d 552, 558 (5th Cir. 2002).

     The district court denied S&W leave to amend based on the

lenient standard of Federal Rule of Civil Procedure 15(a), which

provides that leave to amend “shall be freely given when justice so

requires.”   SouthTrust argues, and S&W now concedes, that Federal

Rule of Civil Procedure 16(b) governs amendment of pleadings once

a scheduling order has been issued by the district court.     Rule

16(b) provides that a scheduling order “shall not be modified

except upon a showing of good cause and by leave of the district

judge.” The good cause standard requires the “party seeking relief

to show that the deadlines cannot reasonably be met despite the

diligence of the party needing the extension.”     6A Charles Alan

Wright et al., Federal Practice and Procedure § 1522.1 (2d ed.

1990).

     This Court has not ruled on the applicability of Rule 16(b) to

amendment of pleadings after the deadline set by a scheduling



                                 4
order.   We owe the trial court “‘broad discretion to preserve the

integrity   and   purpose    of   the   pretrial    order,’”   Geiserman   v.

MacDonald, 893 F.2d 787, 790 (5th Cir. 1990)(quoting Hodges v.

United States, 597 F.2d 1014, 1018 (5th Cir.1979)), which, toward

the end of court efficiency, is to expedite pretrial procedure.

Hodges, 597 F.2d at 1018.         Several circuits,1 as well as district

courts within our circuit,2 have applied Rule 16(b) when leave to

amend would require modification of the scheduling order.            We take

this opportunity to make clear that Rule 16(b) governs amendment of

pleadings after a scheduling order deadline has expired. Only upon

the movant’s demonstration of good cause to modify the scheduling

order will the more liberal standard of Rule 15(a) apply to the

district court’s decision to grant or deny leave.

      The district court denied S&W leave to amend because its

motion   was   untimely     and   because   of     potential   prejudice   to

SouthTrust or, alternatively, unnecessary delay of the trial.              The

court premised its denial also on its conclusion that S&W offered


  1
    See, e.g., Parker v. Columbia Pictures Industries, 204 F.3d
326, 342 (2nd Cir. 2000); In re Milk Prods. Antitrust Litig., 195
F.3d 430, 437 (8th Cir.1999); Sosa v. Airprint Sys., Inc., 133 F.3d
1417, 1419 (11th Cir.1998) (per curiam); Johnson v. Mammoth
Recreations, Inc., 975 F.2d 604, 610 (9th Cir.1992); Riofrio Anda
v. Ralston Purina Co., 959 F.2d 1149, 1154-55 (1st Cir.1992).
  2
   See, e.g., Dallas Area Rapid Transit v. Foster, 2002 WL
31433295, at *1 (N.D.Tex. Oct. 28, 2002); Howell v. Standard Motor
Products, Inc. 2001 WL 196969, at *1     (N.D.Tex. Feb 26, 2001);
Porter v. Milliken & Michaels, Inc. 2001 WL 378687, at *1 (E.D.La.
April 12, 2001); Bakner v. Xerox Corp. Employee Stock Ownership
Plan 2000 WL 33348191, at *13 (W.D.Tex. Aug. 28, 2000).

                                        5
no       adequate   explanation   for   its   failure   to   comply   with   the

scheduling order.3 As the district court noted, the same facts were

known to S&W from the time of its original complaint to the time it

moved for leave to amend.          S&W could have asserted interference

with contract from the beginning, but fails to explain why it did

not.        S&W’s   explanation   for   its   delayed   analysis   of   Sturges

–inadvertence– is tantamount to no explanation at all.

          In the context of allowing untimely submission of expert

reports, this Court has applied a four-part test to determine

whether the district court’s refusal to modify its scheduling order

was an abuse of discretion.         We find this test appropriate as well

in the context of untimely motions to amend pleadings.             We consider

“‘(1) the explanation for the failure to [timely move for leave to

amend]; (2) the importance of the [amendment]; (3) potential

prejudice in allowing the [amendment]; and (4) the availability of

a continuance to cure such prejudice.’”            Reliance Ins. Co. v. La.

Land & Exploration Co., 110 F.3d 253, 257 (5th Cir. 1997)(quoting

Geiserman v. Macdonald, 893 F.2d 787, 791 (5th Cir. 1990)).4

     3
    “S&W offers no adequate basis for its failure to amend within
the deadlines established by the court. ... S&W offers no
explanation for the delayed analysis of Sturges, which resulted in
its untimely filing. Moreover, S&W wholly fails to explain why it
could not have set forth a claim of tortious interference with a
contract at the time its lawsuit was filed in 1998.” S&W Enters.,
L.L.C. v. SouthTrust Bank of Ala., 180 F. Supp.2d 811, 815
(N.D.Tex. 2001).
     4
    Our previous opinions in Estate of Strangi v. Comm’r, 293 F.2d
279 (5th Cir. 2002), and Lyn-Lea Travel Corp. v. American Airlines,
Inc., 283 F.3d 282 (5th Cir. 2002), did not apply the good cause

                                        6
     Three of the four factors weigh against S&W–the first because

S&W offers effectively no explanation, and the third because, as

S&W would assert a different cause of action, SouthTrust would be

required to conduct additional discovery. The fourth factor weighs

against S&W because, while a continuance could be granted for

additional discovery, the district court found that a continuance

would unnecessarily delay the trial.           In view of district judges’

“power to control their dockets by refusing to give ineffective

litigants   a   second   chance   to       develop   their   case,”   Reliance

Insurance, 110 F.3d at 258, we conclude that it was within the

judge’s sound discretion not to grant a continuance.              Taking the

court’s conclusions as a determination that good cause to modify

the scheduling order is absent, we find no abuse of discretion in

the district court’s refusal to grant leave to amend.

II. SUMMARY JUDGMENT

A. Standard of review

     We review a district court’s grant of summary judgment de


standard. Estate of Strangi discussed Rule 15(a) because Tax Court
Rule 41(a), which governs amendment of pleadings in the Tax Court,
was modeled on Rule 15(a). The parties in Estate of Strangi were
not subject to a deadline for amendment of pleadings. In Lyn-Lea
Travel, we found no abuse of discretion in the district court’s
allowing amendment after the deadline for pleadings had expired.
We were not called upon in either case to consider the interaction
between Rules 15(a) and 16(b). Having done so today, we conclude
that the presence of a scheduling order renders the Rule 15 inquiry
secondary. To the extent that Lyn-Lea Travel may be in tension
with Geiserman and Reliance Insurance, we are bound to apply
Geiserman and Reliance Insurance, which predate Lyn-Lea Travel and
are germane to the district court’s right to enforce its scheduling
order.

                                       7
novo, applying the same standards as would the district court.

Pratt v. Houston, 247 F.3d 601, 605-06 (5th Cir. 2001). Summary

judgment shall be rendered when the pleadings, depositions, answers

to     interrogatories,       and   admissions         on     file,    together        with

affidavits, if any, show that there is no genuine issue of material

fact and the moving party is entitled to judgment as a matter of

law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317,

322, 106 S.Ct. 2548 (1986).                  Once a movant makes a properly

supported motion, the burden shifts to the nonmovant to show that

summary judgment should not be granted. Id. at 321-25, 106 S.Ct. at

2551-54.      The nonmovant may not rest upon allegations in the

pleadings, but must set forth and support with summary judgment

evidence facts showing the existence of a genuine issue for trial.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255-57, 106 S.Ct.

2505, 2513-14(1986). All evidence and the reasonable inferences to

be drawn therefrom must be viewed in the light most favorable to

the non-movant. United States v. Diebold, Inc., 369 U.S. 654, 655

(1962).

B. SouthTrust’s motion for summary judgment

       SouthTrust      argued    that    its       refusal     to     consent    to    the

Assignment, reasonable or not, could not be the basis of the

independent     tort     required       by       Sturges.      S&W     contended       that

SouthTrust’s conduct was tortious in that SouthTrust breached its

duty    to   perform    its     contract         obligation    to     Daiwa     with   the

“faithfulness” required by law, citing Montgomery Ward & Co. v.

                                             8
Scharrenbeck, 204 S.W.2d 508 (Tex. 1947).                      The district court

granted summary judgment, concluding that S&W demonstrated no fact

issue as to SouthTrust’s unreasonableness.

     S&W admits that it produced no evidence in support of the

factual   predicate      to     its   faithfulness        argument,    SouthTrust’s

unreasonableness.        It argues it was not required to do so because

SouthTrust,    having        presented     the    district   court    with       a    pure

question of law, never shifted to S&W the burden of demonstrating

a fact issue.      S&W argues also that SouthTrust conceded in its

memorandum    in   support      of    summary     judgment   that     it   had       acted

unreasonably.

     While    we   do    not    agree     that    SouthTrust    conceded     its       own

unreasonableness, we see merit in S&W’s contention that SouthTrust

never shifted to S&W the burden of producing a fact issue.                            Even

so, we conclude that we must affirm summary judgment because

SouthTrust’s unreasonableness would not constitute an independent

tort as required by Sturges.              Summary judgment must be affirmed if

it is sustainable on any legal ground in the record, In re Jones,

966 F.2d 169, 172 (5th Cir. 1992), and it may be affirmed on

grounds rejected or not stated by the district court.                      Landry v.

Airline Pilots Ass’n, 892 F.2d 1238, 1252, (5th Cir. 1990).

     In   support       of     its    position     that    SouthTrust’s      alleged

unreasonableness        violated      a    duty   of   faithfulness,       S&W       cites

Scharrenbeck, 204 S.W.2d 508, in which the Texas Supreme Court

stated: “‘Accompanying every contract is a common-law duty to

                                            9
perform with care, skill, reasonable expedience and faithfulness

the thing agreed to be done, and a negligent failure to observe any

of   these conditions       is   a    tort,   as   well   as   a    breach   of   the

contract.’” Id. at 510 (quoting 38 Am. Jur. § 20 (1941)).                         This

language from Sharrenbeck must be considered in context.                          The

defendant   in    Sharrenbeck        negligently    repaired       the   plaintiff’s

heater, which then caused a fire that destroyed the plaintiff’s

house.   The Texas Supreme Court held that the plaintiff was not

limited to recovery in contract; the basis for the plaintiff’s tort

recovery was a duty implied by law regardless of the contract

obligation.      As the supreme court later explained in Southwestern

Bell Telephone Co. v. Delanney, 809 S.W.2d 493, 494 (Tex. 1991),

“Although the contract obligated the defendant to put the water

heater back in good working order, the law also implied a duty to

the defendant to act with reasonable skill and diligence in making

the repairs so as not to injure a person or property by his

performance.”     In contrast, a duty owed only by virtue of contract

obligation, such as that owed by SouthTrust, does not give rise to

tort liability.       Id.    The damages arising from the defendant’s

conduct are instructive also; if damages arise solely from the loss

of the contract benefit, the claim sounds only in contract. Id. at

495; Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 618 (Tex.

1986). Other damages, such as property damage or personal injury,

can be recovered in tort. Id.

      SouthTrust owed a duty not to withhold consent unreasonably

                                         10
solely because of the Participation Agreement between it and Daiwa.

SouthTrust’s breach would entitle Daiwa to recover only for loss of

the contract benefit of obtaining SouthTrust’s consent to an

assignment     of    Daiwa’s   participation   interest.      We   hold   that

SouthTrust’s failure to consent to the Assignment, regardless of

its reasonableness, was not independently tortious and therefore

provides no basis for S&W’s interference with prospective advantage

claim.

III. CONCLUSION

     We find no abuse of discretion in the district court’s denial

of leave to amend.        SouthTrust’s unreasonableness in failing to

consent   to   the    Assignment   is    insufficient   to   constitute   the

independent tort required by Sturges.            We therefore affirm the

judgment of the district court.



AFFIRMED.




                                        11
