Opinion ID: 567522
Heading Depth: 1
Heading Rank: 5

Heading: Amendment of the complaint and relation back.

Text: 58 Appellants argue that allowing Viall to amend her complaint on the first day of the trial was improper. This court reviews the district court's decision to allow the amendment for an abuse of discretion. Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir.1989). 59 Federal Rule of Civil Procedure 15(b) provides: 60 When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment ... may be made upon motion of any party at any time, even after judgment.... If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the admission of such evidence would prejudice the party in maintaining the party's action or defense upon the merits. 61 Fed.R.Civ.P. 15(b). 62 We have stressed Rule 15's policy of favoring amendments, and we have applied this policy with liberality.... The district court's discretion to amend is particularly broad where plaintiff has previously amended the complaint. Ascon Properties, 866 F.2d at 1160. The propriety of a motion for leave to amend is generally determined by reference to several factors: (1) undue delay; (2) bad faith; (3) futility of amendment; and (4) prejudice to the opposing party. Hurn v. Retirement Fund Trust of Plumbing, Heating & Piping of Southern Calif., 648 F.2d 1252, 1254 (9th Cir.1981). In the present case, there is no indication that Viall's late amendment was due to bad faith. The amendment was also not futile. The delay by permitting an amendment to the complaint cannot alone justify the denial of leave to amend. Id. at 1254-55. As appellant Clark argues, the pertinent inquiry is the degree of prejudice to the appellants. 63 The appellants argue that Viall's delay in amending her complaint unduly prejudiced them. The delay, they argue, precluded cross-claims against codefendants or filing a third party complaint for indemnity. The amendment altered the theory of the case from conversion to negligence and, appellants claim, they were unprepared to defend against this theory. 64 Although the pleadings at the time of trial made no claim based on negligence, the pretrial order clearly set forth Viall's negligent supervision theory of liability. The pretrial order ... supersedes the pleading ... and 'controls the subsequent course of the action.'  Donovan v. Crisostomo, 689 F.2d 869, 875 (9th Cir.1982) (quoting Fed.R.Civ.P. 16). Regardless of Clark's protestations that negligence was not within the purview of the complaint, Viall's theory of liability was made clear in the pretrial order. At the latest, therefore, from the time of the pretrial conference Clark was on notice of Viall's theory of the appellant's liability. The district court acted within its discretion in allowing Viall to amend her complaint. 65 Clark argues that even if permitting the amendment was not an abuse of discretion, the amendment should not be allowed to relate back to the date of the filing of the first amended complaint. 66 Federal Rule of Civil Procedure 15(c) provides: 67 Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. 68 Fed.R.Civ.P. 15(c). If the amendment refers to the same set of facts as the original complaint then the case should not be time-barred because the defendant has been on notice of the facts giving rise to the injury complained of. Percy v. San Francisco General Hosp., 841 F.2d 975, 979 (9th Cir.1988). Fairness to the defendant demands that the defendant be able to anticipate claims that might follow from the facts alleged by the plaintiff. Id. The determination of whether a new claim arises out of the same conduct, transaction, or occurrence as set forth in the original pleading is reviewed de novo. Id. at 978. 69 Viall's first amended complaint alleged the appellants were liable: 70 (a) As direct participants in a violation of 7 U.S.C. 6(b) and 6(o), in that as directors of NACC, they were required to exercise command and to supervise the officers and employees of NACC so as to insure that NACC, its correspondents, agents or employees, did not violate 7 U.S.C. 6(b) and 6(o). The said Individual Defendants failed to exercise proper command and supervision, and as a result thereof, the violations of 7 U.S.C. 6(b) and 6(o) alleged herein occurred. 71