Opinion ID: 541946
Heading Depth: 2
Heading Rank: 2

Heading: Conclusive Effect of Admissions

Text: 21 Having found that reliance on Rule 60(b) was harmless error, we turn now to the merits of Farr Man/Woodhouse's appeal with regard to the effect of M/V ROZITA's failure to respond to requests for admissions. 22 In this case, by not answering the requests for admissions, M/V ROZITA effectively admitted that Farr Man/Woodhouse suffered a loss in the amount of $285,268.63. See Fed.R.Civ.P. 36(b). The stipulated facts, however, reveal that because of payments made to Farr Man/Woodhouse by Lloyd's Underwriters, Farr Man/Woodhouse suffered at worst a loss of $29,235.38. In making its initial admission, M/V ROZITA argues that it relied on the pleadings and other submissions offered by Farr Man/Woodhouse, which neglected to mention the fact that payments totaling $215,495.23 had already been made to Farr Man/Woodhouse and that Farr Man/Woodhouse has stipulated that $38,084.18 was properly withheld from payment by Amstar. 3 M/V ROZITA argues that, had it been aware that Farr Man/Woodhouse had already been partially compensated, it would not have admitted to damages in the amount of $285,268.63. 23 Although it is true that failure to answer requests for admissions will ordinarily result in the requests being deemed admitted, e.g., Rainbolt v. Johnson, 669 F.2d 767, 768 (D.C.Cir.1981), Rule 36(b) does permit a court to allow admissions to be withdrawn or amended, provided that certain requirements are met. In this case, we find that those requirements were satisfied, and thus that the district court acted appropriately in allowing M/V ROZITA to withdraw its admissions. 24 Rule 36(b) provides, in pertinent part, that: 25 [s]ubject to the provision of Rule 16 governing amendment of a pre-trial order, the court may permit withdrawal or amendment when the presentation of the merits of the action will be subserved thereby and the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice that party in maintaining the action or defense on the merits. 26 District courts have considerable discretion over whether to permit withdrawal or amendment of admissions made pursuant to Rule 36. Bergemann v. United States, 820 F.2d 1117 (10th Cir.1987); Brook Village N. Assocs. v. General Elec. Co., 686 F.2d 66, 70 (1st Cir.1982); 4A J. Moore & J. Lucas Moore's Federal Practice p 36-08 at 36-80 (2d ed. 1990). That discretion must, however, be exercised within the parameters drawn by Rule 36(b)'s two-part test. On appeal, this court will review the district court's decision to permit withdrawal of admissions only for abuse of discretion. It is important to note that since trial had begun prior to the request to withdraw the admissions, the district court could grant the motion only if it found that so doing was necessary to prevent manifest injustice. 4 See Brook Village N. Assocs. v. General Electric Co., 686 F.2d at 71. Upon review, we find that the district court successfully surmounted this higher standard, and consequently acted within its discretion in permitting M/V ROZITA to withdraw its admissions. 27 In analyzing whether it was appropriate to permit withdrawal of the admissions, we are guided by the purposes of the Rule, as explicated by the advisory committee's note: 28 Provision is made for withdrawal or amendment of an admission. This provision emphasizes the importance of having the action resolved on the merits, while at the same time assuring each party that justified reliance on an admission in preparation for trial will not operate to his prejudice. 29 Fed.R.Civ.P. 36(b), Advisory Committee's Note. As to the first part of Rule 36(b)'s test, we find that permitting the withdrawal of M/V ROZITA's admissions would facilitate the development of the case in reaching the truth, 4A J. Moore, supra, p 36-08 at 36-79, because, as the district court noted, the most current stipulation of facts sets the damages suffered by plaintiffs at $29,268.63, rather than the amount admitted to of $285,268.63. Thus, we conclude, the first prong of Rule 36(b) is satisfied. The second hurdle is similarly easily surmounted. 30 Rule 36(b)'s second part essentially requires that, prior to allowing withdrawal of admissions, the district court be convinced that the party who obtained the admission will not be prejudiced by its withdrawal. As this court has previously stated, 31 [t]he prejudice contemplated by the Rule is not simply that the party who initially obtained the admission will now have to convince the fact finder of its truth. Rather, it relates to the difficulty a party may face in proving its case, e.g., caused by the unavailability of key witnesses, because of the sudden need to obtain evidence with respect to the questions previously answered by the admissions. 32 Brook Village N. Assocs. v. General Elect. Co., 686 F.2d at 70. See Westmoreland v. Triumph Motorcycle Corp., 71 F.R.D. 192 (D.Conn.1976). In the instant case, the district court found that, [s]ince all the lawyers in the case appear to have been equally (and woefully) ignorant of the facts, there is no unfairness in relieving the defendant of admissions which are conceded to have been incorrect. There is more than sufficient evidence to support this conclusion, particularly in light of M/V ROZITA's uncontroverted claim that it was not until after trial had commenced that it became aware that Farr Man/Woodhouse had been paid $215,495.23 of the $285,268.63 of claimed cargo damage. 33 Upon review, we find that Farr Man/Woodhouse was not prejudiced by the rescission of the admissions as to the total amount of liability--$285,268.63. Allowing that admission to stand would have been manifestly unjust: it would have allowed Farr Man/Woodhouse to collect a double recovery--once from M/V ROZITA, and a second from Lloyd's Underwriters. Indeed, on appeal, Farr Man/Woodhouse does not argue for this result. Instead, it contends that it was damaged in the amount of $29,235.38, and that Lloyd's Underwriters was damaged in the amount of $215,495.25. 34 Although there is sufficient evidence to support the district court's rescission of the admissions as to damages of $215,495.23, that still leaves $69,773.40 unaccounted for. Of that amount, Farr Man/Woodhouse admitted that $38,084.18 was properly withheld and it does not appear to contest the withholding of $2,453.84 for other fees. But that leaves $29,235.38 still in dispute. The district court found that Farr Man/Woodhouse failed to make a claim for the $29,235.38 allegedly wrongfully withheld from payment by Amstar, costs which Farr Man/Woodhouse contends were related to the added difficulty associated with unloading the sugar because of the negligence of the Amstar employee, although the district court concluded that the deductions were unrelated to cargo damage. 35 Upon review of the pleadings, we find that the district court reads them too narrowly. While Farr Man/Woodhouse never specifically mentioned the exact figure of $29,235.38, the loss it claimed was far more than that which it eventually received from Lloyd's Underwriters and which it initially won on summary judgment. Since Farr Man/Woodhouse was never a party to a trial, it did not have the opportunity to present evidence on the issue. Consequently, we find that there is a material issue as to whether Farr Mann had an interest in the cargo, at least to the extent of the $29,235.38 which was withheld from payment. Therefore, we vacate that portion of the district court opinion dismissing Farr Man/Woodhouse's claim as to its alleged loss of $29,235.38, and remand this issue to the district court for trial. 36