* Pursuant to 5th Cir. R. 47.5, the court has determ ined that this opinio n should not be published and is not precedent except under the limited circumstances set forth in 5th Cir. R. 47.5.4. United States Court of Appeals

Fifth Circuit 

## FILED August 7, 2006 Charles R. Fulbruge III Clerk IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 04-51320

ESTATE OF JAMES POTTER, Jr., DECEASED, Pl aint iff- Appellant,
versus BEXAR COUNTY HOSPITAL DISTRICT, d/b/a UNIVERSITY HEALTH SYSTEM, et al, Defendants, BEXAR COUNTY HOSPITAL DISTRICT, d/b/a UNIVERSITY HEALTH SYSTEM, DefendantsAppellees.
Appeal from the United States District Court fo r the Western District of Texas

(03-CV-55) Before KING, STEWART, and DENNIS, Circuit Judges. CARL E. STEWART, Circuit Judge: * The Estate of James T. Potter (“the Estate”) appeals the district court’s denial of it s mo tion to amend it s com

plaint to allege a claim of negligent hiring against the Bexar County Hospital District2

(“BCHD”). James T. Potter filed the underlying suit against BCHD and fo ur hospital security of ficers fo r v io lat io n of his Fo urth and Fourteenth Amendment rights pursuant to 42 U.S.C. § 1983; after Potter’s death, the Estate was substituted as the plaint iff. The claims against BCHD were dismissed prior to tri al; however, the Estate lat er sought to amend it s com plaint to allege negligent hiring. The district court denied the motion. For the following reasons we reverse.

I. FACTUAL AND PROCEDURAL BACKGROUND On December 23, 2002, James T. Potter, Jr. filed suit in Texas state court against defendantappellee BCHD and fo ur hospital security of ficers, alleging th at the of

ficers had unlawfully assaulted and detained him while he was seeking medical attention fo r an asthma attack at University Hospital in Bexar County , Texas. The suit was removed to federal court. The parties consented to proceed before a magistrate j udge, who issued a scheduling order on March 31, 2003. Pursuant to the scheduling order, tri al was set fo r May 3, 2004, discovery was to be com pleted by January 19, 2004, and amendments to pleadings were due by January 26, 2004. Potter died in March 2003, and in June, Potter’s estate was substituted as plaint iff by way of
a fir st amended com

plaint
. The fir st amended com plaint set fo rth the same substantive claims as the original peti

tion; specifically, the Estate asse r ted claims against the individual defendants fo r false arrest and imprisonment, excessive fo rce, assault, and batte ry . The Estate al so asserted a claim of malicio us prosecution against Thomas Martinez, alleging th at Martinez cooperated i n Potter’s prosecution fo r assault. Further, the Estate asserted th at if the of ficers were not fo und to have acted int ention ally, t hey were negligent, and that BCHD was liable for such negligence pursuant to the Texas Tort Cl aims Act (“TTCA”). The negligence claim was the only allegation against BCHD.3

On October 17, 2003, BC HD filed a m otion for summary judgment and a motion for
severance arguing th at it was entitled to governmental immunit y under the TTCA fo r the int entional torts of it s employees. The Estate filed a motion seeking a continuance and an extension of time to respond to the summary judgment mo tion to conduct discovery, asserting th at discovery might reveal th at University Hospital was n egligent in hiring, supervising and training the officers. The Estate simult aneously filed a conditional response to the summary judgment motion, asserting that the of ficers’ actions fell within one of the enumerated exceptions to immunity set forth in the TTCA. The magistrate judge denied the Estate’s mo tion fo r a continuance, stating th at discovery was not needed to rebut BCHD’s assertions of governmental immunit y. The Estate sought reconsideration, arguing th at it was pursuing discovery on a potenti al claim th at BCHD was liable fo r negligent hiring, training and supervision; th at depositions were scheduled in the next thirty days; th at any delay in discovery was due to Potter’s death; and th at it would amend it s pleadings if discovery supported a § 1983 claim against BCHD. The magistrate judge denied the mo tion fo r reconsideration and granted summary judgment in favor of BCHD, dismissing the claims against BCHD for the alleged negligence of the officers. The rul ing stated th at any amendment to add negligent hiring claims would be futile because negligent hiring does not give ri se to government a l liabilit y under § 1983. Nevertheless, the judge denied BCHD’s mo tion fo r severance and declined to enter partial judgment in favor of BCHD. The magistrate judge lat er extended the deadline fo r the Estate to amend it s pleadings to March 8, 2004, and the discovery deadline to March 19, 2004. On January 14, 2004, the Estate filed a mo tion fo r leave to file a second amended com plaint
. The proposed amended com plaint set fo rth the same malicio us prosecution claim as in t he earl ier4

com plaint s but added an assertion th at University Hospital was liable. The com plaint further alleged th at Universi

t y Hospital’s pol

ice chief, Leonard Sims, failed to adequately screen Martinez by obtaining his employment records from the San Ant onio Pol ice Departm

ent and the University of the Incarnate Word Pol

ice Department, which purportedly revealed prior incidents of assaults by Martinez and showed th at Martinez had been term inat ed by the San Ant onio Pol ice Departm

ent fo r spousal abuse. The Estate argued that Sims’s failure to conduct adequate screening constituted deliberate indifference rendering BCHD liable pursuant to § 1983. In the mo tion to amend, the Estate also asserted th at the info rmatio n was developed through the depositions of Sims and Martinez in December 2003 and January 2 004, respectively, and the San Antonio Police Department records, which were not supplied until January 2004. The magistrate judge denied the mo tion to amend, concl uding that the Estate failed to demonstrate why the claims could not have been brought earlier. The judge stated th at there was no basis to concluded th at the Estate was diligent in seeking to add the malicio us prosecution claim; th at the Estate had sufficient time explore any claims against BCHD; th at, in it s response to the BCHD’s
mo ti on f or sum mary judgment, the Estate failed to identify any discovery that had been initiat ed before or aft er the mo tion; and the Estate did not secure Martinez’s prior employment 2004. Accordingly, the magistrate judge concluded th at the Estate failed to demonstrate sufficient diligence to outweigh “the clear prejudice to defendant BCHD, which had been dismissed from this case.” The Estate filed a mo tion to reconsider supported by an affidavit averring th at the Estate had been diligent in seeking the docum ents th rough a repeat request fo r production in February 2003; th at defense counsel had agreed to obtain t he records; th at in Septem ber and October 2003, the Estate sent authorizations fo r the records to defense counsel; and th at Martinez’s deposition was repeatedly5

postponed by defense counsel. The Estate also argued th at there was no prejudice because BCHD
was on notice th at the Estate was seeking Martinez’s employment records to pursue a claim for negligent hiring and th at the amendment was filed before both the original deadline fo r filing amendments and the extended deadline. The magistrate judge denied the mo tion fo r reconsideration stating th at the Estate could have subpoenaed the records from the San Ant onio Pol ice Departm

ent
or sought to com

pel timely production of the records from Martinez. On October 12, 2004, the magistrate judge entered a final judgment dismissing the suit. The Estate timely appealed. II. DISCUSSION Federal Rule of Civil Procedure 15(a) governs the amendment of pleadings and provides th at, aft er a responsive pleading has been served, a party may amend a pleading “o nly by leave of court or by written consent of the adverse party ; and leave shall be freely given when justice so requires.” We review a district court’s denial of leave to amend fo r abuse of discretion. Jones v. Robinson Property Group, L.P. , 427 F.3d 987, 992 (5th Cir. 2005). Nevertheless, we have previously recognized th at the Rule “evinces a bias in favor of granting leave to amend.” Dussouy v. Gulf Coast Inv. Corp. , 660 F.2d 594, 597 (1981). The pol icy of the federal rules is to permit liberal amendment to f acilit ate determ inat io n of cl aims o n t he merits and to prevent litigation from becoming a technical exercise in the fine point s of pleading. Thus, unless there is a substantial reason to deny leave to amend, the discretion of the district court is not broad enough to perm it denial. Id. at 598 (citations om

it ted). In deciding whether to grant a motion for leave to amend, the district court may consider a variety of factors including undue delay, bad faith or dilatory motive, repeated failures to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party , and futility6

o f the amendment. Jones , 427 F.3d at 994; Dussouy , 660 F.2d at 598. The Estate argu es that the magistrate judge abused her discretion in finding (1) th at the estate had not demonstrated due diligence in amending it s pleadings despite it s timeliness wit h respect to the scheduling order; and (2) th at BCHD would suffer “clear prejudice” if the amendment were allowed. We agree. T he Estate’s m

otion for leave to amend was filed before both the original and extended deadlines fo r amending pleadings; therefore, on its face, the mo tion was timely. See Halbert v. City of Sherman , 33 F.3d 526, 529 (5th Cir. 1994). The magistrate judge nevertheless concluded th at the Estate had not been diligent in o bt aining t he records and proffering its second amended complaint. “Merely be cause a claim was not presented as promptly as possible, however, does not vest the district court wi th authority to puni sh the litigant.” C arson v. Polley , 689 F.2d 562, 584 (5th Cir. 1982). The Estate sought records from Martinez regarding any com plaint s in February 2003, just one
mo nt h aft er the case was removed to federal court. The Estate received discovery responses from the defendants in July and August 2003 th at indicated fo r the fir st time th at Martinez had been suspended from the San Ant onio Pol ice Departm

ent. On Septem

ber 10, 2003, the Estate began trying to obtain Martinez’s employment records and to set his deposition. It also informed University Hospital that it wished to depose a hospital representative regarding it s hiring procedures, including background checks. Further, just ten days aft er BCHD filed it s mo tion fo r summary judgment, the Estate indicated it s int ention to amend the com plaint to add a claim of negligent hiring if discovery yielded enough information to support such a claim. Thus, this is not a situation where the facts regarding t he negligent hiring claim were fully known to the Estate from the com men cement of the sui

t and it attem pted to present the claims in se ri ati m; indeed it appears that counsel for the Estate conscientiously relied on its findings during the course of discovery to refine the complaint
. Cf.7

Freeman v. Cont’l Gin Co. , 381 F.2d 459, 469 (5th Cir. 1967) (“The facts on which t he claim o f fraud is based were fully kno wn to Freeman from the outset of the lawsuit and, indeed, were relied on by him, th ough under a different theory , in his original answer. It was not until th at theory was rejected by the tri al court . . . that the am endment was tendered seeking to make out a showing of fraud from th ose facts.”). Even if the Estate should have utilized subpoenas and adversarial means to discover certain info rmation earlier, given the presumption in favor of liberal allowance of amendments and the Estate’s reliance on the scheduling order, such excusable neglect cannot serve
as a basis for denying leave to amend. S ee Little v. Liquid Air Corp ., 952 F.2d 841, 846 (5th Cir. 1992) (“[I]f the delay in filing a mo tion fo r leave to amend is particularly egregious, the burden shift s to the mo ving party to demonstrate th at the delay was ‘due to ov ersight, inadvertence or excusable neglect.’” (quoting Gregory v. Mitchell , 634 F.2d 199, 203 (5th Cir.1981))). Nor are we persuaded by BCHD’s argument th at it would be un dul y prejudiced because summary judgment has already been granted and rejoining the lit igation would require it to re-depose wit nesses and file new expert reports. Although BCHD had been granted summary judgment, t he magistrate judge denied the mo tion fo r severance; consequently, BCHD was still a defendant in the suit. Moreover, “t he tri al court can avoid any prejudice from [reiteration of discovery proceedings], fo r it has discretion to tax the costs of the repeated disco very proceedings against [the Estate].” Dussouy , 660 F.2d at 599. Accordingly, we conclude that the district court abused its discretion in denying the Estate’s mo tion fo r leave to amend based on a purported lack of diligence and prejudice to BCHD. We also reject BCHD’s argument th at allo wing the Estate’s amendment would be futile. Alt hough the magistrate judge initially indicated that the amendment would be futile because8

negl igence does not give rise to liability under § 1983, the judge later acknowledged t hat the proposed amendment cured the futilit y concern by alleging deliberate indifference. On appeal, BCHD essentially argues th at the Estate will ult imat ely be unable to prove BCHD’s liabilit y. Whether BCHD is ult imat ely ent it led to summary judgment on this claim is best determ ined by the district court on remand; however, the record at thi s stage does not support a finding that the amendment would be futile. Consequently, remand to the district court to allo w the Estate to amend it s com plaint is necessary. Cf. Halbert , 33 F.3d at 530 (concluding based on a well developed record th at plaint iff’s claim wo uld fail as a matter of law, thus, remand to allow leave to amend was not required). III. CONCLUSION For the fo regoing reasons, the judgment of the district court is REVERSED and the case is REMANDED to the district court for further proceedings consistent with this opinion.