Opinion ID: 1172230
Heading Depth: 1
Heading Rank: 7

Heading: the sammises' motion to withdraw the deemed admissions

Text: In response to IPC's motion for summary judgment, the Sammises moved to withdraw the deemed admissions and sought leave to file new admissions. The court denied this request, stating: So far as plaintiffs' motion to file new admissions under 36(b), court will deny that motion, that there's no good cause shown. Although we have not yet addressed the standard applicable when reviewing a lower court's ruling on a motion brought under I.R.C.P. 36(b), federal courts have held that, under the analogous federal rule, such decisions are reviewed for an abuse of discretion. Hadley v. United States, 45 F.3d 1345, 1348 (9th Cir.1995); 999 v. C.I.T. Corp., 776 F.2d 866, 869 (9th Cir.1985). In addition, they have warned lower courts to use caution when exercising their discretion to allow withdrawal or amendment of admissions under this rule. C.I.T. Corp., 776 F.2d at 869 (citations omitted). We hold that the correct standard of review to apply to lower court's rulings on motions made under I.R.C.P. 36(b) is the abuse of discretion standard. Rule 36(b) provides, in relevant part: Any matter admitted under this rule is conclusively established unless the court on motion permits withdrawal or amendment of the admission.... [T]he 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 an action or defense on the merits .... (emphasis added). By its terms, this rule vests the court with discretion in determining whether to allow withdrawal or amendment of admissions. The test for determining whether a court has abused its discretion consists of three inquiries: (1) whether the court correctly perceived the issue as one of discretion; (2) whether the court acted within the outer boundaries of its discretion and consistently with the legal standards applicable to the specific choices available to it; and (3) whether the court reached its decision through an exercise of reason. Burgess v. Salmon River Canal Co., Ltd., 127 Idaho 565, 573, 903 P.2d 730, 738 (1995) (citing Rhodehouse, 125 Idaho at 213, 868 P.2d at 1229). The rule, however, does not require the court to allow withdrawal or amendment. Rather, it permits the court to do so where two requirements are met: (1) the merits of the action will be subserved by allowing withdrawal or amendment, and (2) the opposing party does not demonstrate that withdrawal or amendment will prejudice that party. See Donovan v. Carls Drug Co., Inc., 703 F.2d 650, 652 (2d Cir.1983) (Because the language of the Rule is permissive, the court is not required to make an exception to Rule 36 even if both the merits and prejudice issues cut in favor of the party seeking exception to the rule.). But see Hadley, 45 F.3d at 1348 (finding abuse of discretion where trial court denied motion to withdraw deemed admissions where opposing party did not demonstrate prejudice). In this case, we hold that the lower court abused its discretion in ruling on the Sammises' motion. Although the court correctly perceived the issue as one of discretion, it did not act consistently with the legal standards applicable to the specific choices available to it. In ruling on the Sammises' motion, the court stated that it based its decision on the fact that the Sammises had failed to establish good cause. The good cause language, while relevant to a determination of whether to dismiss a claim for violation of Rule 4(a)(2), does not appear in Rule 36(b). In addition, the court made no mention of the two-prong test delineated in Rule 36(b). Where a lower court, in the exercise of its discretion, does not apply the correct legal test or consider the factors laid out in an applicable rule or statute, the court has abused that discretion. See Gutting v. Falstaff Brewing Corp., 710 F.2d 1309, 1314 (8th Cir.1983) (holding that district court abused its discretion in denying motion under F.R.C.P. 36(b) because it did not apply two-prong test set forth in rule and instead based its decision on: party's failure to request extension of time within which to respond; pattern of delay exhibited by party; and party's apparent propensity to `flout' the time limits set forth in federal rules considerations not discussed in rule). See also Hanf v. Syringa Realty, Inc., 120 Idaho 364, 369, 816 P.2d 320, 325 (1991); Sun Valley Shopping Ctr., Inc. v. Idaho Power Co., 119 Idaho 87, 95-96, 803 P.2d 993, 1001-02 (1991) (both holding that trial court abused its discretion when imposing sanctions under I.R.C.P. 11 because it applied incorrect legal test). The lower court did not apply the correct legal test under Rule 36(b). We thus vacate the court's order denying the motion and remand for a determination of whether the Sammises met the test set forth in Rule 36(b).