Opinion ID: 1368925
Heading Depth: 2
Heading Rank: 1

Heading: factual and procedual background

Text: The facts are not in dispute. [1] The Chena Hot Springs Group (CHS) owns and operates Chena Hot Springs Resort. CHS is a limited partnership which had, at one time, three general partners: Robert Betz, William Kinn and Roger Cotting. In August 1980, Betz was voted out as a general partner. The earlier litigation between these parties concerned the propriety of Betzes' forced retirement and the valuation of his partnership interest. Robert and Madeleine Betz filed the complaint in this action in September 1980 and an amended complaint in May 1982. The amended complaint alleged that the Betzes constructed an eight-plex on land leased from CHS and operated it under the name of Hot Springs Hostel. On June 30, 1980, CHS, its wholly owned subsidiary, Parlour House, Inc., Kinn and Cotting (collectively CHS) and the Betzes entered an agreement for operation of the eight-plex for a term of ten years. The Betzes claimed that in May 1981, CHS sent them a letter wrongfully terminating the contract and stating that all utilities serving the eight-plex would be cut off immediately. The Betzes asserted that this breach of contract forced them out of business thus lessening competition and creating a monopoly to operate hotel facilities at Chena Hot Springs Resort by CHS in violation of AS 45.50.562. In December 1985, CHS moved for partial judgment on the pleadings on the antitrust count. CHS argued that AS 45.50.562 was based upon and should be construed consistently with section 1 of the Sherman Act, (Sherman 1) 15 U.S.C. § 1 (1982). A recent United States Supreme Court decision had clarified that a corporation, its affiliated companies, wholly owned subsidiaries and officers and employees were not separate entities capable of contracting, combining or conspiring in violation of Sherman 1. Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 777, 104 S.Ct. 2731, 2744-45, 81 L.Ed.2d 628, 647 (1984). Since the Betzes had sued only CHS, its wholly owned subsidiaries and its general partners, CHS claimed that their Sherman 1 type claim was fatally defective. In response, the Betzes essentially conceded that they had no Sherman 1 claim, but argued that a single firm could unlawfully create a monopoly under section 2 of the Sherman Act (Sherman 2), 15 U.S.C. § 2, and that a similar interpretation should be given to AS 45.50.564 under West v. Whitney-Fidalgo Seafoods, Inc., 628 P.2d 10, 14 (Alaska 1981). The Betzes argued that the antitrust count could be saved by a simple amendment to the statutory reference and that their claim was similar to one recently approved by the United States Supreme Court in Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 105 S.Ct. 2847, 86 L.Ed.2d 467 (1985). The Betzes did not, however, move to amend at that time. In February 1986, the superior court found the claim as pled to be defective under Copperweld. The court refused to speculate as to the nature of the Betzes' possible amendment and stated that merely changing the statute allegedly violated from AS 45.50.562 to AS 45.50.564 may be insufficient to defeat the present motion. The Betzes moved to amend their complaint in May 1986. At that time trial was set for September 15, 1986, with a discovery cut-off date of August 29, 1986. The superior court denied the Betzes' motion to amend but stated no reasons for its ruling. The Betzes then moved the court to reconsider its denial of their motion to amend. In the alternative, the Betzes requested that the court issue a final order pursuant to Civil Rule 54(b) and stay proceedings pending appeal to this court. The court denied both requests, again giving no reasons its rulings. The Betzes next moved to continue the trial date for ninety days and the discovery cut-off until sixty days before trial because Madeleine Betz required surgery. By Pretrial Order dated September 1986, the trial was put over until September 1987 and the discovery cut-off moved to August 1987. The Betzes filed another motion to amend in October 1986, arguing that the superior court's denial of their first motion to amend was probably due to the imminent trial date. They argued that since the trial had been postponed for almost a year, this was no longer a concern. The proposed amendment added some factual allegations and charged that CHS had violated AS 45.50.564, rather than section 562. The trial court denied the motion, for all of the reasons set forth in the opposition to motion amending complaint filed by Chena Hot Springs Group, Kinn and Cotting. The court also entered final judgment, pursuant to Civil Rule 54(b), denying the motion to amend the complaint. We hold that the trial court abused its discretion in failing to allow the Betzes leave to amend their antitrust claim.