Opinion ID: 2642614
Heading Depth: 2
Heading Rank: 2

Heading: Nassar’s and Trout’s Cross-Appeal

Text: ¶19. The main contention of the plaintiffs’ cross-appeal is that the chancellor erred by denying their motion to amend their complaint. Once the defendant had filed its answer, the plaintiffs could amend their complaint “only by leave of court or upon written consent of the adverse party; leave shall be freely given when justice so requires.” M.R.C.P. 15(a). On appeal, “[w]hen considering a trial court’s decision to grant or deny a motion to amend a pleading, the standard of review is abuse of discretion.” Hutzel v. City of Jackson, 33 So. 3d 1116, 1119 (Miss. 2010) (Pratt v. City of Greenville, 804 So. 2d 972, 978 (Miss. 2001)). While Rule 15 states that an amendment “shall be freely given when justice so requires,” absent a mistake of law, which is subject to de novo review, the plaintiffs have a heavy burden to overcome. 9 ¶20. On November 13, 2007, five and a half years after filing their complaint, the plaintiffs moved to amend their complaint to add new causes of action, including breach of contract, breach of fiduciary duties, and breach of good faith and fair dealing. The amendment sought actual damages, punitive damages, prejudgment interest from the date of the breach, attorneys’ fees, and costs. ¶21. Bailey Brake responded that the amendment sought to change the very nature of the litigation, transforming their initial request for equitable relief into a stockholder’s derivative action that should have been filed in circuit court. The defendant also claimed that the amendment would be highly prejudicial because a key witness to its defense of these new claims had died. Bailey Brake asserted that all of the alleged facts underlying the new claims existed and were known to the plaintiffs at the time of their original complaint, and that the motion was an attempt to bypass the statute of limitations. ¶22. The plaintiffs have offered little explanation for waiting five and a half years to amend their complaint, an amendment that would have changed the nature of their case from a case in equity to an action at law. Absent extraordinary circumstances, we will affirm the denial of a motion to amend if a party has “had ample opportunity and time to amend its complaint, and has offered no justification for why it did not do so.” Barry v. Reeves, 47 So. 3d 689, 695 (Miss. 2010) (quoting Webb v. Braswell, 930 So. 2d 387, 393 (Miss. 2006)). “Applications to amend the pleadings should be prompt,” and a lack of diligence is not a compelling reason to amend. Id. (citations omitted). ¶23. The plaintiffs’ main assertion appears to be that intentional delays in the litigation, caused by the defendant, rendered their initial demands for relief inadequate. The plaintiffs 10 do not articulate specific examples of bad faith on the part of the defendant that would warrant such a drastic change to their initial claims. Moreover, the law provides remedies for intentional dilatory conduct. See e.g., M.R.C.P. 37(b) (allowing sanctions for failing to comply with discovery). The plaintiffs had adequate means to remedy any alleged bad faith in the defendant’s conduct of the litigation, and a motion to amend, five and a half years after their initial complaint, was not a proper avenue for relief. ¶24. Further, the special master’s report and recommendations, later adopted in toto by the chancellor, actually addressed the breach of contract claim and resolved the issue in the plaintiffs’ favor. The special master found that Bailey Brake did not comply with the contractual terms following the plaintiffs’ tendering their stock on May 19, 2001. The special master noted that the contracts did not require the corporation to purchase the tendered shares. However, to remedy its breach of the contract, the special master recommended that Bailey Brake be required to purchase the plaintiffs’ shares at an amount determined in arbitration. According to the chancellor, an adequate measure of damages for the corporation’s breach of contract was the fair market value of their shares as of May 19, 2001. ¶25. As for prejudgment interest, the special master, and ultimately the trial court, correctly ruled that prejudgment interest was not available without having been pled in the initial complaint. Upchurch Plumbing, Inc. v. Greenwood Utilities Comm’n, 964 So. 2d 1100, 1118 (Miss. 2007). The plaintiffs rely on Upchurch to argue that such specificity is not required to be pled for the court to award prejudgment interest. Yet Upchurch simply holds that “Rule 8 does not require that a party seeking prejudgment interest must plead the specific 11 date on which the prejudgment interest allegedly is due,” and does not abrogate the requirement “that a party assert a demand for prejudgment interest in the appropriate pleading.” The initial complaint prayed for declaratory and injunctive relief and “general relief.” A request for “general relief” in a complaint seeking equitable relief would not give the defendant notice of a claim for prejudgment interest. M.R.C.P. 8. ¶26. As an alternative, the plaintiffs argue that Article V of the Buy-Sell Stock Restriction Agreement entitles them to prejudgment interest at a rate of ten percent per annum from the date of the defendant’s breach. However, the trial court correctly recognized that this provision does not apply. Article V applies only when Bailey Brake has agreed to purchase a shareholder’s stock at an arbitrated value and then is thirty days late on a payment. Since the value of the stock was still in dispute, no payments were due from Bailey Brake; thus, the contract did not entitle the plaintiffs to prejudgment interest. For these reasons, the plaintiffs’ cross-appeal is without merit.