Court Opinion

ID: 44734
Source: CourtListenerOpinion
Date Created: 2010-04-25 22:27:15+00
Date Added: 2024-06-11T17:17:18.858586
License: Public Domain

United States Court of Appeals
                                                                                           Fifth Circuit
                                                                                         F I L E D
                      IN THE UNITED STATES COURT OF APPEALS
                                                                                          August 7, 2006
                               FOR THE FIFTH CIRCUIT
                                                                                    Charles R. Fulbruge III
                                                                                            Clerk

                                            No. 04-51320

ESTATE OF JAMES POTTER, Jr.,
DECEASED,
                                                                                   Plaintiff-Appellant,

                                                versus

BEXAR COUNTY HOSPITAL DISTRICT,
d/b/a UNIVERSITY HEALTH SYSTEM, et al,

                                                                                          Defendants,

BEXAR COUNTY HOSPITAL DISTRICT,
d/b/a UNIVERSITY HEALTH SYSTEM,

                                                                                          Defendants-
Appellees.

                           Appeal from the United States District Court
                                for the Western District of Texas
                                             (03-CV-55)

Before KING, STEWART, and DENNIS, Circuit Judges.

CARL E. STEWART, Circuit Judge:*

       The Estate of James T. Potter (“the Estate”) appeals the district court’s denial of its motion

to amend its complaint to allege a claim of negligent hiring against the Bexar County Hospital District

   *
   Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not be published
and is not precedent except under the limited circumstances set forth in 5th Cir. R. 47.5.4.
(“BCHD”). James T. Potter filed the underlying suit against BCHD and four hospital security officers

for violation of his Fourth and Fourteenth Amendment rights pursuant to 42 U.S.C. § 1983; after

Potter’s death, the Estate was substituted as the plaintiff. The claims against BCHD were dismissed

prior to trial; however, the Estate later sought to amend its complaint to allege negligent hiring. The

district court denied the motion. For the following reasons we reverse.

                      I. FACTUAL AND PROCEDURAL BACKGROUND

       On December 23, 2002, James T. Potter, Jr. filed suit in Texas state court against defendant-

appellee BCHD and four hospital security officers, alleging that the officers had unlawfully assaulted

and detained him while he was seeking medical attention for an asthma attack at University Hospital

in Bexar County, Texas. The suit was removed to federal court. The parties consented to proceed

before a magistrate judge, who issued a scheduling order on March 31, 2003. Pursuant to the

scheduling order, trial was set for May 3, 2004, discovery was to be completed by January 19, 2004,

and amendments to pleadings were due by January 26, 2004.

       Potter died in March 2003, and in June, Potter’s estate was substituted as plaintiff by way of

a first amended complaint. The first amended complaint set forth the same substantive claims as the

original petition; specifically, the Estate asserted claims against the individual defendants for false

arrest and imprisonment, excessive force, assault, and battery. The Estate also asserted a claim of

malicious prosecution against Thomas Martinez, alleging that Martinez cooperated in Potter’s

prosecution for assault. Further, the Estate asserted that if the officers were not found to have acted

intentionally, they were negligent, and that BCHD was liable for such negligence pursuant to the

Texas Tort Claims Act (“TTCA”). The negligence claim was the only allegation against BCHD.

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        On October 17, 2003, BCHD filed a motion for summary judgment and a motion for

severance arguing that it was entitled to governmental immunity under the TTCA for the intentional

torts of its employees. The Estate filed a motion seeking a continuance and an extension of time to

respond to the summary judgment motion to conduct discovery, asserting that discovery might reveal

that University Hospital was negligent in hiring, supervising and training the officers. The Estate

simultaneously filed a conditional response to the summary judgment motion, asserting that the

officers’ actions fell within one of the enumerated exceptions to immunity set forth in the TTCA.

        The magistrate judge denied the Estate’s motion for a continuance, stating that discovery was

not needed to rebut BCHD’s assertions of governmental immunity. The Estate sought

reconsideration, arguing that it was pursuing discovery on a potential claim that BCHD was liable for

negligent hiring, training and supervision; that depositions were scheduled in the next thirty days; that

any delay in discovery was due to Potter’s death; and that it would amend its pleadings if discovery

supported a § 1983 claim against BCHD.

        The magistrate judge denied the motion for reconsideration and granted summary judgment

in favor of BCHD, dismissing the claims against BCHD for the alleged negligence of the officers.

The ruling stated that any amendment to add negligent hiring claims would be futile because negligent

hiring does not give rise to governmental liability under § 1983. Nevertheless, the judge denied

BCHD’s motion for severance and declined to enter partial judgment in favor of BCHD. The

magistrate judge later extended the deadline for the Estate to amend its pleadings to March 8, 2004,

and the discovery deadline to March 19, 2004.

        On January 14, 2004, the Estate filed a motion for leave to file a second amended complaint.

The proposed amended complaint set forth the same malicious prosecution claim as in the earlier

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complaints but added an assertion that University Hospital was liable. The complaint further alleged

that University Hospital’s police chief, Leonard Sims, failed to adequately screen Martinez by

obtaining his employment records from the San Antonio Police Department and the University of the

Incarnate Word Police Department, which purportedly revealed prior incidents of assaults by

Martinez and showed that Martinez had been terminated by the San Antonio Police Department for

spousal abuse. The Estate argued that Sims’s failure to conduct adequate screening constituted

deliberate indifference rendering BCHD liable pursuant to § 1983. In the motion to amend, the Estate

also asserted that the information was developed through the depositions of Sims and Martinez in

December 2003 and January 2004, respectively, and the San Antonio Police Department records,

which were not supplied until January 2004.

       The magistrate judge denied the motion to amend, concluding that the Estate failed to

demonstrate why the claims could not have been brought earlier. The judge stated that there was no

basis to concluded that the Estate was diligent in seeking to add the malicious prosecution claim; that

the Estate had sufficient time explore any claims against BCHD; that, in its response to the BCHD’s

motion for summary judgment, the Estate failed to identify any discovery that had been initiated

before or after the motion; and the Estate did not secure Martinez’s prior employment 2004.

Accordingly, the magistrate judge concluded that the Estate failed to demonstrate sufficient diligence

to outweigh “the clear prejudice to defendant BCHD, which had been dismissed from this case.”

       The Estate filed a motion to reconsider supported by an affidavit averring that the Estate had

been diligent in seeking the documents through a repeat request for production in February 2003; that

defense counsel had agreed to obtain the records; that in September and October 2003, the Estate

sent authorizations for the records to defense counsel; and that Martinez’s deposition was repeatedly

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postponed by defense counsel. The Estate also argued that there was no prejudice because BCHD

was on notice that the Estate was seeking Martinez’s employment records to pursue a claim for

negligent hiring and that the amendment was filed before both the original deadline for filing

amendments and the extended deadline. The magistrate judge denied the motion for reconsideration

stating that the Estate could have subpoenaed the records from the San Antonio Police Department

or sought to compel timely production of the records from Martinez. On October 12, 2004, the

magistrate judge entered a final judgment dismissing the suit. The Estate timely appealed.

                                         II. DISCUSSION

       Federal Rule of Civil Procedure 15(a) governs the amendment of pleadings and provides that,

after a responsive pleading has been served, a party may amend a pleading “only by leave of court or

by written consent of the adverse party; and leave shall be freely given when justice so requires.” We

review a district court’s denial of leave to amend for abuse of discretion. Jones v. Robinson Property

Group, L.P., 427 F.3d 987, 992 (5th Cir. 2005). Nevertheless, we have previously recognized that

the Rule “evinces a bias in favor of granting leave to amend.” Dussouy v. Gulf Coast Inv. Corp., 660

F.2d 594, 597 (1981).

       The policy of the federal rules is to permit liberal amendment to facilitate
       determination of claims on the merits and to prevent litigation from becoming a
       technical exercise in the fine points of pleading. Thus, unless there is a substantial
       reason to deny leave to amend, the discretion of the district court is not broad enough
       to permit denial.

Id. at 598 (citations omitted).

       In deciding whether to grant a motion for leave to amend, the district court may consider a

variety of factors including undue delay, bad faith or dilatory motive, repeated failures to cure

deficiencies by amendments previously allowed, undue prejudice to the opposing party, and futility

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of the amendment. Jones, 427 F.3d at 994; Dussouy, 660 F.2d at 598. The Estate argues that the

magistrate judge abused her discretion in finding (1) that the estate had not demonstrated due

diligence in amending its pleadings despite its timeliness with respect to the scheduling order; and (2)

that BCHD would suffer “clear prejudice” if the amendment were allowed. We agree.

        The Estate’s motion for leave to amend was filed before both the original and extended

deadlines for amending pleadings; therefore, on its face, the motion was timely. See Halbert v. City

of Sherman, 33 F.3d 526, 529 (5th Cir. 1994). The magistrate judge nevertheless concluded that the

Estate had not been diligent in obtaining the records and proffering its second amended complaint.

“Merely because a claim was not presented as promptly as possible, however, does not vest the

district court with authority to punish the litigant.” Carson v. Polley, 689 F.2d 562, 584 (5th Cir.

1982). The Estate sought records from Martinez regarding any complaints in February 2003, just one

month after the case was removed to federal court. The Estate received discovery responses from the

defendants in July and August 2003 that indicated for the first time that Martinez had been suspended

from the San Antonio Police Department. On September 10, 2003, the Estate began trying to obtain

Martinez’s employment records and to set his deposition. It also informed University Hospital that

it wished to depose a hospital representative regarding its hiring procedures, including background

checks. Further, just ten days after BCHD filed its motion for summary judgment, the Estate indicated

its intention to amend the complaint to add a claim of negligent hiring if discovery yielded enough

information to support such a claim. Thus, this is not a situation where the facts regarding the

negligent hiring claim were fully known to the Estate from the commencement of the suit and it

attempted to present the claims in seriatim; indeed it appears that counsel for the Estate

conscientiously relied on its findings during the course of discovery to refine the complaint. Cf.

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Freeman v. Cont’l Gin Co., 381 F.2d 459, 469 (5th Cir. 1967) (“The facts on which the claim of

fraud is based were fully known to Freeman from the outset of the lawsuit and, indeed, were relied

on by him, though under a different theory, in his original answer. It was not until that theory was

rejected by the trial court . . . that the amendment was tendered seeking to make out a showing of

fraud from those facts.”). Even if the Estate should have utilized subpoenas and adversarial means

to discover certain information earlier, given the presumption in favor of liberal allowance of

amendments and the Estate’s reliance on the scheduling order, such excusable neglect cannot serve

as a basis for denying leave to amend. See Little v. Liquid Air Corp., 952 F.2d 841, 846 (5th Cir.

1992) (“[I]f the delay in filing a motion for leave to amend is particularly egregious, the burden shifts

to the moving party to demonstrate that the delay was ‘due to oversight, inadvertence or excusable

neglect.’” (quoting Gregory v. Mitchell, 634 F.2d 199, 203 (5th Cir.1981))).

        Nor are we persuaded by BCHD’s argument that it would be unduly prejudiced because

summary judgment has already been granted and rejoining the litigation would require it to re-depose

witnesses and file new expert reports. Although BCHD had been granted summary judgment, the

magistrate judge denied the motion for severance; consequently, BCHD was still a defendant in the

suit. Moreover, “the trial court can avoid any prejudice from [reiteration of discovery proceedings],

for it has discretion to tax the costs of the repeated discovery proceedings against [the Estate].”

Dussouy, 660 F.2d at 599. Accordingly, we conclude that the district court abused its discretion in

denying the Estate’s motion for leave to amend based on a purported lack of diligence and prejudice

to BCHD.

        We also reject BCHD’s argument that allowing the Estate’s amendment would be futile.

Although the magistrate judge initially indicated that the amendment would be futile because

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negligence does not give rise to liability under § 1983, the judge later acknowledged that the

proposed amendment cured the futility concern by alleging deliberate indifference. On appeal, BCHD

essentially argues that the Estate will ultimately be unable to prove BCHD’s liability. Whether BCHD

is ultimately entitled to summary judgment on this claim is best determined by the district court on

remand; however, the record at this stage does not support a finding that the amendment would be

futile. Consequently, remand to the district court to allow the Estate to amend its complaint is

necessary. Cf. Halbert, 33 F.3d at 530 (concluding based on a well developed record that plaintiff’s

claim would fail as a matter of law, thus, remand to allow leave to amend was not required).

                                       III. CONCLUSION

       For the foregoing reasons, the judgment of the district court is REVERSED and the case is

REMANDED to the district court for further proceedings consistent with this opinion.

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