Opinion ID: 2360416
Heading Depth: 1
Heading Rank: 5

Heading: Confusion Precludes Finality

Text: The Third Circuit Court of Appeals has held that a dismissal without prejudice amounts to an implicit invitation to the plaintiff to amend the complaint. [9] Consistent with the Third Circuit's holding in Borelli v. City of Reading , the record reflects that the Court of Chancery thought its dismissal of the First Amended Complaint without prejudice pursuant to Rule 15(aaa) would allow the Plaintiff to submit a motion for leave to file the Second Amended Complaint. In ruling on the motion for leave to file a second amendment, the Court of Chancery also concluded that all parties understood that the Plaintiff would seek to amend his pleading: As to Count I, I am going to allow plaintiff to seek to amend his amended complaint . . . . I do that on the basis that it was the understanding of the parties that the plaintiff would be filing a motion to amend. The plaintiff and his counsel obviously believed that he would be able to amend the complaint in the same action. Based on communication that occurred between counsel after my dismissal of the amended complaint, I'm satisfied that it was the defendants' understanding as well. The Court of Chancery correctly concluded that Rule 15(aaa) permits it to grant leave to amend after a complaint is dismissed without prejudice. To accomplish that result, however, the order of dismissal without prejudice should have expressly authorized the Plaintiff to file an amended complaint by a date certain. The following language is a good example of the proper expression: [i]n accordance with Rule 15(aaa) of the Court of Chancery Rules, the dismissal will be without prejudice, as good cause has been shown to support a finding that dismissal with prejudice would not be just under the circumstances. Therefore, the court grants the [plaintiff] leave to file an amended complaint within 30 days of the date hereof. [10] In Borelli, the Third Circuit stated: Since it may be difficult to determine whether the district court thought an amendment was possible and whether the plaintiff is willing or able to amend, we suggest that district judges expressly state, where appropriate, that the plaintiff has leave to amend within a specified period of time, and that application for dismissal of the action may be made if a timely amendment is not forthcoming within that time. [11] Unfortunately, in this proceeding, the Court of Chancery's order of dismissal without prejudice did not expressly authorize the Plaintiff to seek leave to file another amended complaint by a date certain. An ambiguous record was created by the Court of Chancery's good faith effort to comply with the then new Rule 15(aaa), by following the Third Circuit's practice of implicitly inviting an amendment after a dismissal without prejudice. That ambiguity leads us to conclude that the Dismissal Order in this case must be construed as if it had expressly granted the Plaintiff leave to file another amended complaint. That construction means the Court of Chancery's order dismissing the First Amended Complaint without prejudice was not a final judgment. [12] Therefore, the Court of Chancery retained jurisdiction to consider the Plaintiff's motion for leave to file the Second Amended Complaint. Under the circumstances in the record, this Court cannot conclude that the Court of Chancery abused its discretion in granting the Plaintiff leave to file the Second Amended Complaint. Before we address the Court of Chancery's decision not to dismiss Count I of the Second Amended Complaint, however, it is important to provide some guidance for the future about the operation of Rule 15(aaa).