Opinion ID: 2590584
Heading Depth: 1
Heading Rank: 4

Heading: Motions to Amend the Complaint

Text: During the course of this litigation, Maroun attempted on several occasions to amend the complaint to add allegations against Robinson or against alleged shareholders. Maroun argues the district court erred in not allowing those amendments. In denying the motions to amend the complaint, the district court found that in the absence of any evidence that Robinson, Skouras, Rousseau, Dunhill or Evans were actually shareholders, the proposed amendments did not state a claim and any amendment would be futile. The district court also held the motions to amend were not timely. The denial of a motion to amend a complaint after a responsive pleading has been served is governed by an abuse of discretion standard of review. Hines v. Hines, 129 Idaho 847, 853, 934 P.2d 20, 26 (1997); Raedlein v. Boise Cascade Corp., 129 Idaho 627, 631, 931 P.2d 621, 625 (1996). The test for determining whether the district court abused its discretion is: (1) whether the court correctly perceived that the issue was 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 it reached its decision by an exercise of reason. Thomas v. Medical Center Physicians, P.A., 138 Idaho 200, 210, 61 P.3d 557, 567 (2002) (citations omitted). As to the first requirement, the grant or denial of an opportunity to amend is within the discretion of the [d]istrict [c]ourt.... Idaho Schools for Equal Educational Opportunity v. Idaho State Board of Education, 128 Idaho 276, 284, 912 P.2d 644, 652 (1996) (citations omitted). The district judge in this case expressly stated her ruling on the motion was one of discretion. As to the second requirement, [i]n determining whether an amended complaint should be allowed, where leave of court is required under Rule 15(a), the court may consider whether the new claims proposed to be inserted into the action by the amended complaint state a valid claim. Black Canyon Racquetball Club, Inc., v. Idaho First Nat'l Bank N.A., 119 Idaho 171, 175, 804 P.2d 900, 904 (1991) (citations omitted). However, the trial court may not consider the sufficiency of evidence supporting the claim sought to be added in determining leave to amend because that is more properly determined at the summary judgment stage. Thomas, 138 Idaho at 210, 61 P.3d at 567. It was certainly proper for the district court to consider whether the proposed amended complaint alleged valid claims. However, it was not proper for the district court to require Maroun to produce evidence showing Robinson, Skouras, Rousseau, Dunhill and Evans were shareholders or owners of Wyreless before permitting the complaint to be amended. Therefore, the amendment should not have been denied on that basis. The district court's alternative basis for denying Maroun's motions to amend was because they were untimely. This Court has held the following factors are controlling when a district court considers the timeliness of a motion for leave to amend a complaint: In the absence of any apparent or declared reason  such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendment previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.  the leave sought should, as the rules require, be freely given. Carl H. Christensen Family Trust v. Christensen, 133 Idaho 866, 871, 993 P.2d 1197, 1202 (1999) (quoting Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222, 225 (1962)) (internal citation omitted). In Christensen, the parties stipulated to allow motions through October 3, a week before the stipulated hearing date. The plaintiffs filed a motion to amend their complaint on October 1. The district court denied the motion on timeliness grounds, stating the amended complaint was not lodged with this [c]ourt until October of 1997, nearly one year after the filing of the original complaint. It was not timely filed, and it will not be accepted or considered by this [c]ourt. Christensen, 133 Idaho at 871, 993 P.2d at 1202. On appeal, this Court held the district court abused its discretion in denying the plaintiffs' motion to amend because the correct legal standard for timeliness was not applied. The holding was based on the fact that the district court did not consider whether the amendment would cause delay or would prejudice the defendants. Christensen, 133 Idaho at 873, 993 P.2d at 1203. In this case, the district court entered a scheduling order that set a deadline for filing motions to amend pleadings. The parties later stipulated to amend the scheduling order to extend the time for filing motions to amend pleadings to April 30, 2002. Maroun filed his third motion to amend on August 28, 2002 and filed his fourth motion to amend on February 21, 2003. Unlike the situation in Christensen, where the deadline for filing motions had not yet expired, Maroun filed his motions to amend several months after the deadline and named defendants who Maroun had already voluntarily dismissed from the suit. In denying the motions, the district court discussed the fact that the motions were filed after the deadline for filing amended pleadings and after two discovery deadlines had passed. This district court also noted the passage of time. In response to one of the motions to amend, the district court stated: We are now two years into this case, the time to amend pleadings has passed, and two discovery deadlines have expired. It is now simply too late to further amend the substance of the pleadings.... It is clear from the judge's comments and from the record that an extended period of time had passed and Maroun had been repeatedly unsuccessful in alleging claims against the new defendants. In addition, the record reveals that Maroun was granted leave to amend his complaint on at least two prior occasions during the course of this litigation. The district court sufficiently articulated the prejudice to the defendants and did not abuse its discretion in denying the motions to amend.