## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 06-1601

___________ Baptist Health, doing business as * Baptist Health Medical Center, * * Plaintiff, * * v. * * Todd P. Smith, M.D., * * Defendant/Appellee, * * v. * Appeal from the United States * District Court for the Robert Casali, M.D., * Eastern District of Arkansas. * Third Party Defendant/ * Appellant, * * Central Arkansas Vascular * Surgery, P.A., * * Third Party Defendant. *

___________ Submitted: October 20, 2006 Filed: February 9, 2007

___________ Before SMITH, BOWMAN, and COLLOTON, Circuit Judges.

___________ SMITH, Circuit Judge.-2- Dr. Todd Smith filed a third-party complaint against Dr. Robert Casali seeking indemnity against a $154,000 judgment awar ded to Baptist Health Medical Center ("Baptist Health"). The district court granted summary judgment in favor of Dr. Smith. Dr. Casali appeals. We affirm in part, reverse in part and remand.

I. Background Dr. Casali is the President and sole sh areholder of Central Arkansas Vascular Surgery ("CAVS"). Baptist Health and CAVS jointly hired Dr. Smith to offer medical services with both institutions. As part of this arrangement, Baptis t Health offered Dr. Smith a loan agreement to help start hi s practice. Under the terms of the loan agreement, if Dr. Smith provided medical se rvices in Arkansas for six years, then Baptist Health would forgive the loan debt.

Dr. Smith, hesitant to enter into such an agreement, expresse d his concern to Dr. Casali, who responded with a letter stating:

You will be an employee of Central Arkansas Vascular Surgery, with a beginning employment date of July 1, 2002. Your responsibility to Central Arkansas Vascular Surgery is the professional practice of vascular surgery. You will not be re sponsible for repayment of any loan to Baptist Health Center in any form or fashion.

Dr. Smith entered the agreement but, after practicing for two years, left Arkansas for Texas. Baptist H ealth filed suit against Dr. Smith seeking to recover the roughly $154,000 loaned to Dr. Smith. Dr. Smith, in turn, filed a third-party complaint against Dr. Casali and CAVS, alleging that Dr. Casali's letter constituted an agreement to indemnify Dr. Smith against any obligations owed to Baptist Health.

After filing his answer to Dr. Smith's third-party complaint, Dr. Casali was granted permission to file an amended answ er. Five days later, Dr. Casali requested permission to file a second-amended answerthat attempted to assert several new-3- defenses. The district court denied Dr. Casali's request to file a second-amended answer and entered judgment in favor of Baptist Health. The district court entered summary judgment in favor of Dr. Smith after concluding Dr. Casali's letter was an indemnity agreement and ordered Dr. Casali to indemnify Dr. Smith against the Baptist Health judgment. Dr. Casali appeal s, arguing the district court erred in concluding that the letter wa s an indemnity agreement and in denying his motion to amend.

II. Discussion "We review the district court's legal c onclusion that a contract existed de novo." Diesel Power Equip., Inc. v. ADDCO, Inc. , 377 F.3d 853, 856 (8th Cir. 2004). Decisions from the state supreme court as to state law are binding on this court. Garnac Grain Co., Inc. v. Blackley , 932 F.2d 1563, 1570 (8th Cir. 1991). "Decisions of the various intermediate appellate courts are not, but th ey are persuasive authority." Id.

The focus of this appeal is a single se ntence in a three-sentence letter from Dr. Casali to Dr. Smith. The sentence states, "Y ou will not be respons ible for repayment of any loan to Baptist Health Center in any form or fashion." Dr. Casali argues that the district court erred by interpre ting this statement as a clear expression of his intent to indemnify Dr. Smith sufficient to constitu te an enforceable indemnity agreement under Arkansas law. We agree.

Under Arkansas contract law, for language to constitute an indemnity agreement, the intent to indemnify must be expressed in clear and unequivocal terms and to such an extent that no other meaning can be ascribed. Chevron U.S.A., Inc. v. Murphy Exploration & Prod. Co., 151 S.W.3d 306, 310 (Ark. 2004). While no particular words are required to form such an agreement, Arkansas courts "will not impose [an indemnity duty] unless the purpose to do so is spelled out in unmistakable terms." Id. The language of an indemnity agr eement can be unambiguous and still not-4- spell out in clear, unequivocal, unmistaka ble terms the indemnitor's intention to obligate himself to indemnify. Arkansas Kraft Corp. v. Boyed Sanders Const. Co., 764 S.W.2d 452, 453–454 (Ark. 1989).

The letter fails to spell out a promise by Dr. Casali to pay Dr. Smith's debt in clear, unequivocal, unmistakable terms. Conspi cuously absent is a ny reference to Dr. Casali assuming responsibility for Dr. Smith's obligation. Under the loan agreement with Baptist Health, providing medical servi ces in Little Rock constituted repayment by Dr. Smith. Instead, the letter merely states that Dr. Smith will not have to repay any loan from Baptist Health. The disputed sentence reasonably could be understood as Dr. Casali's prediction about whether Baptis t Health would hold Dr. Smith responsible for repayment of the loan, or it could simp ly be a misstatement by Dr. Casali of the terms of the agreement. In any event, Dr . Smith must show more than the possibility that the letter was an agreement to indemnify; the terms must be unmistakable.

Further, the two other sentences in the letter are consistent with a mere articulation of Dr. Casali's understanding of the contract's terms. "You will be an employee of Central Arkansas Vascular Surgery, with a beginning employment date of July 1, 2002. Your responsibility to Cen tral Arkansas Vascular Surgery is the professional practice of vascular surg ery." This declaration does not assume responsibility for a loan's repayment. It coul d readily be taken as a summary statement of the relationship between Dr. Casali, Dr. Smith, and Baptist Health.

Both parties attempt to introduce extrinsic evidence, claiming the letter is ambiguous. However, we need not consider such evidence because we hold the letter is not an indemn ity agreement. See H & H Brokerage, Inc. v. Vanliner Ins. Co. , 168 F.3d 1124, 1127 (8th Cir. 1999) (holding ex trinsic evidence of the meaning of a contract is admissible only when the contract is ambiguous). The parties are not disputing the meaning of any term or phras e in the purported contract, but instead are disputing whether a contract was formed.-5- Based upon the forgoing analysis, we c onclude that the letter is not an indemnity agreement, that the district c ourt erred by granting Dr. Smith's motion for summary judgment and that the indemnification claim should be dismissed as a matter of law.

III. Motion to Amend "[I]n determining whether to permit anamendment under Fed.R.Civ.P. 15(b), the district court has broad discretion and will not be reversed except upon a showing of abuse." Brown v. Cooper Clinic, P.A. , 734 F.2d 1298, 1301 (8th Cir. 1984) (internal quotations and citations omi tted). "Amendments [to pleadi ngs] should be allowed with liberality." Chesnut v. St. Louis County, Mo. , 656 F.2d 343, 349 (8th Cir. 1981). However, there is no absolute right to amend and a court may deny the motion based upon a finding of undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies in previous amendments, undue prejudice to the non-moving party, or futility. Doe v. Cassel , 403 F.3d 986 (8th Cir. 2005).

We are unable to say the district c ourt abused its discretion by denying Dr. Casali's motion for leave to file a sec ond amended answer. The record evinces a pattern of delay by Dr. Casa li's counsel. After postponing their client's deposition, Dr. Casali's counsel refused to return phone calls from opposing counsel seeking to reschedule the deposition. These delays all seem calculated to accommodate the personal schedule of Dr. Casali' s lead attorney, who had an extensive travel schedule and preferred not to work on Fridays. These delays were so grave that the district court awarded Dr. Smith $907 in attorney's f ees and costs in order to compensate him for the related inconvenience. Dr. Casali doe s not contest these f acts. We agree that allowing Dr. Casali to raise three additional defenses after the close of discovery and so close to the beginning of litigation woul d have further prejudiced the defendant. These new defenses would have potentia lly required additional discovery and depositions. Accordingly, we find that the di strict court did not abuse its discretion by denying Dr. Casali's motion to amend.-6- IV. Conclusion We vacate the district court's grant of summary judgment and direct that the indemnification claim be dismissed as a matter of law. The district court's denial of Dr. Casali's motion to amend his answer is affirmed, and the case is remanded for further proceedings on Dr. Smith's claim for contribution.

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