Court Opinion

ID: 9668759
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:24:54.156049+00
Date Added: 2024-06-11T18:15:47.940079
License: Public Domain

Robert L. Brown, Justice, dissenting. The majority’s decision on amended pleadings represents a major departure from our past precedent and from the plain language of Ark. R. Civ. P. 15(a). It is now the position of the majority that oral amendments to a complaint are no longer permissible prior to trial and that a trial court has discretion to disallow an amendment on grounds that the amendment is “too late.” What is unsettling is that the decision harbingers the erosion of an important civil pleading rule based on the facts of an individual case. Here, the appellee Bank filed its motion for summary judgment long before any scheduled trial. At the hearing on the motion the Bank’s attorney argued to the trial court that the appellants “now raise a cause of action based upon the guaranty contracts.” That attorney further alluded to the appellants’ response to the Bank’s summary judgment motion, where, he said, the guaranty “shows up.” The attorney for the appellants made the following argument in support of bringing the causes of action in the appellants’ capacity as guarantors: [W]e ask the Court to allow the plaintiffs to amend the Complaint for the sole purpose to include the individuals as guarantors and state a cause of action that would [not leave] any question. . . . [ I] t was the .S'acfc.y. . .,the Buschmann . . ., and . . . the Van Petten case[s] that said, you do have a cause of action as guarantors on the notes. . . . Also, ... we have pled an intentional infliction of emotional distress in our Amended Complaint. That goes to the individuals. The McIlroy Bank has acted on the personal guarantees, both on the extension agreements of the notes, and on individual guarantees that were signed in 1983 and 1985. The individuals have suffered the harm, . . . and it’s a breach of contract action, and that’s what we have pled, not only breach of contract, but the intentional infliction of emotional distress. What counsel was asking the court to do was permit the causes of action for the individual appellants, who were already plaintiff's to the complaint, to be specifically brought by them as guarantors. His amendment amounted to little more than the inclusion of the word “guarantors” in the complaint because, as he pointed out to the trial court, factual allegations on behalf of the individual appellants had already been pled. The majority says that the trial court did not know the factual details of the amendment, but that is not the case. The trial court did understand the amendment and declined to allow it for these reasons: 1. There was no allegation of guaranties in the complaint. 2. Amending the complaint on the day of a summary judgment hearing was too late. 3. The appellants/guarantors could bootstrap themselves into circuit court by means of the guaranties. 4. The appellants/guarantors could have dissolved Aero Corporation and had a cause of action against the Bank. 5. Failure to keep Aero in good standing and failure to dissolve the corporation were arguments against allowing the appellants/guarantors to sue as guarantors. 6. The accounts of Aero were frozen — not the accounts of the appellants/guarantors. The trial court treated the appellants’ attempt to include the word “guarantors” in their complaint as both a motion to amend and as an actual amendment: Court: I’ve allowed one amended Complaint this morning that was filed in August, but I’m going to deny your amendment at this point in time and your objections will be noted. In doing so and then in granting the Bank summary judgment, the trial court committed reversible error. ' Our rule on amendments to pleadings is exceptionally clear: “. . . a party may amend his pleadings at any time without leave of the court.” Ark. R. Civ. P. 15(a). The majority would read into the rule additional requirements that the amendment be in writing and be timely. The rule, however, does not require that. And we should not construe the rule to mean other than what it says. Mears v. Arkansas State Hospital, 265 Ark. 844, 581 S.W.2d 339 (1979). The majority raises the spectre of a dilatory tactic by counsel making frivolous oral amendments to pleadings at hearings on summary judgment motions. The alternative is the course which the majority has chosen to follow which is to curtail the parties’ freedom to amend in nearly all instances without leave of the court. Reporters’ Notes to Rule 15. The majority justifies its decision in part on the basis that it does not glean from the appellants’ argument a contention that they actually amended their complaint. I disagree. The appellants were not allowed to amend their complaint. They argued in this appeal that they “sought only to add the words ‘breach of guaranty agreements’ to the Complaint.” This equated to an amendment, and the trial court certainly recognized it as such when it said, “I’m going to deny your amendment.” The reality of court practice is that an attorney does not say to a trial judge in the middle of a hearing, “I hearby amend my complaint whether you like it or not.” It is couched in terms of a request to amend, as a vehicle for offering the proposed amendment. That is what happened here, and all in attendance understood it, including the trial court. The trial court erred when it denied that amendment, and that error is what is before this ° court. By advising the trial court of his amendment, counsel for the appellants did what was necessary to comply with Rule 15(a). If the Bank’s counsel had an objection to the amendment, he should have moved to strike it on grounds of prejudice or undue delay as provided under Rule 15(a). The trial court could then have made its decision. That procedure was not followed in this case. The rules were not adhered to, and for that reason reversal is in order. If there is one axiom under our civil procedure rules, it is that Arkansas recognizes a liberal pleading policy. See Kay v. Economy Fire & Casualty Co., 284 Ark. 11, 678 S.W.2d 365 (1984). A corollary to that axiom is our previous statement regarding Rule 15(a) that the rule, in fact, encourages amendments to pleadings. Id. Those policies have been thwarted by the decision in this case. Holt, C.J., joins.