Court Opinion

ID: 2743211
Source: CourtListenerOpinion
Date Created: 2014-10-16 21:00:44.963201+00
Date Added: 2024-06-11T10:05:32.668078
License: Public Domain

United States Court of Appeals
                      For the First Circuit

No. 13-1810

                ALTAMIRA RODRÍGUEZ PÉREZ, ET AL.,

                     Plaintiffs, Appellants,

                                v.

                  HOSPITAL DAMAS, INC., ET AL.,

                      Defendants, Appellees.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO

          [Hon. Carmen C. Cerezo, U.S. District Judge]

                              Before

                    Howard, Lipez and Barron,
                         Circuit Judges.

     Manuel San Juan for appellants.
     Roberto Ruiz Comas, with whom RC Legal & Litigation Services
PSC was on brief, for appellees.
     Freddie Pérez-González, with whom Freddie Pérez-González &
Assoc., P.S.C. was on brief, for Fundación Damas, Inc., intervenor-
appellee.

                         October 16, 2014
               BARRON, Circuit Judge.       This appeal asks us to reverse a

denial of a motion to amend a complaint in a medical malpractice

case.       We cannot do so, however, because the District Court acted

within its discretion when it decided the plaintiffs had waited too

long before trying to add -- just weeks ahead of the trial's

scheduled start -- a new defendant.

                                       I.

               The underlying complaint concerns the medical treatment

Estella Rodríguez Pérez received in 2007 and 2008 at the Damas

Hospital in Ponce, Puerto Rico.              The hospital admitted her in

November of 2007 for gastrointestinal distress.                 The hospital

discharged her seven months later in a persistent vegetative

state.1       In response, Pérez's sister and daughter -- Sonia Hodge

and   Alma      Sanchez-Rodríguez,   respectively      --   brought   suit   in

November of 2008.

               The plaintiffs originally filed their complaint in the

Puerto Rico Court of First Instance.                 They then voluntarily

dismissed their suit and re-filed in federal court in October of

2009.       It is that federal complaint -- and, in particular, the

plaintiffs' unsuccessful attempt to amend it -- that gives rise to

this appeal.

               The federal complaint named Hospital Damas, Inc., various

hospital employees and staff members, and a number of unnamed

        1
            She died in May of 2009.

                                       -2-
entities as defendants. One of those unnamed defendants was listed

only as "Corporation ABC." Though the plaintiffs did not then know

the identity of "Corporation ABC," they nonetheless alleged it was,

along with Hospital Damas, Inc., the owner and operator of the

Damas Hospital.

          On April 23, 2010, the District Court dismissed the

complaint as to all unnamed defendants, including "Corporation

ABC."   The court explained "[t]he term to identify [unnamed]

defendants ha[d] expired." One week later, however, the plaintiffs

successfully filed an amended complaint that again listed the

unnamed "Corporation ABC" as a defendant.

          Then, in September of 2010, Hospital Damas, Inc. filed

for Chapter 11 bankruptcy.      In doing so, Hospital Damas, Inc.

provided information of potential relevance to the plaintiffs'

identification of "Corporation ABC" in the medical malpractice

case.   Specifically, Hospital Damas, Inc. named Fundación Damas,

Inc. both as Hospital Damas, Inc.'s sole co-debtor and as the

lessor for the hospital property.

          Although   Hospital   Damas,   Inc.   sought   to   stay   the

malpractice case during the pendency of the bankruptcy proceedings,

the Bankruptcy Court allowed the malpractice case to proceed.        And

so that suit headed towards trial until, on February 7, 2012 -- six

weeks before the scheduled start of the trial -- the plaintiffs

                                 -3-
filed a motion to amend their complaint to include Fundación Damas,

Inc. as a defendant.

          The motion stated the plaintiffs had learned of Fundación

Damas, Inc.'s relationship to the hospital "as a result of" the

disclosures made in Hospital Damas, Inc.'s bankruptcy filings. The

plaintiffs also attached two documents they claimed "confirm that

Fundación Damas, Inc. is indeed the licensed, duly authorized owner

and operator of the Damas Hospital."       One was a Puerto Rico

Department of Health license that listed Fundación Damas, Inc. as

the entity authorized to operate the hospital.      The other was

entitled "Second Amendment to Deed of Trust" and showed that

Fundación Damas, Inc. had established a self-insurance trust fund

for the hospital.2

          Hospital Damas, Inc. argued the District Court should

deny the motion so as not to reward the plaintiffs for their lack

of diligence in identifying "Corporation ABC."     Hospital Damas,

Inc. also argued the addition of Fundación Damas, Inc. at such a

late date would unfairly delay the trial.      The District Court

     2
       The plaintiffs later filed a supplemental motion to which
they attached a number of additional supporting documents. One of
these documents, which they obtained from the Puerto Rico
Department of Health, was a "Certificate of Need and Convenience"
and listed Fundación Damas, Inc. as the "owner" of the Damas
Hospital. In their supplemental motion, the plaintiffs argued that
this Certificate showed that the government recognized only
Fundación Damas, Inc., and not Hospital Damas, Inc., as the owner
and operator of the hospital.

                               -4-
denied the plaintiffs' motion for leave to amend on May 12, 2012,

and this appeal followed.

                                     II.

            Our decision turns on Rule 15 of the Federal Rules of

Civil Procedure, which provides that district courts "should freely

give leave [to amend] when justice so requires."            Fed. R. Civ. P.

15(a)(2).    Ordinarily, the district court is best positioned to

decide whether that standard has been met, which is why we "review

denials of leave to amend under Rule 15 for abuse of discretion,

deferring to the district court for any adequate reason apparent

from the record." Resolution Trust Corp. v. Gold, 30 F.3d 251, 253

(1st Cir. 1994).

            Here, the District Court denied the motion because of the

plaintiffs' delay.     We have previously explained that "undue delay

in moving to amend, even standing alone, may be . . . an adequate

reason" to deny such a motion.       In re Lombardo, 755 F.3d 1, 3 (1st

Cir. 2014) (citing Acosta–Mestre v. Hilton Int'l of P.R., Inc., 156

F.3d 49, 51–52 (1st Cir. 1998)).         We thus must decide whether the

District Court acted within its discretion in deciding on this

record that the delay was undue.

            As   we   have   said   on   a   number   of   occasions,   "when

'considerable time has elapsed between the filing of the complaint

and the motion to amend, the movant has [at the very least] the

burden of showing some valid reason for his neglect and delay.'"

                                     -5-
Id. (quoting Stepanischen v. Merchs. Despatch Transp. Corp., 722

F.2d 922, 933 (1st Cir. 1983)) (alteration in original).             And a

"considerable" amount of time certainly passed here.             See id.

(discussing cases imposing on the movant the burden to explain

grounds for delay when the delay was fourteen, fifteen, and

seventeen months, respectively).         More than two years elapsed

between the filing of the plaintiffs' original complaint and their

motion for leave to amend it.      And more than sixteen months passed

after Hospital Damas, Inc. made its September 2010 bankruptcy

filing   disclosing   the   ties   between   the   two   entities.     The

plaintiffs thus bore the burden of explaining their attempt to add

Fundación Damas, Inc. so late in the case.

            The District Court found the plaintiffs' explanation

inadequate.    The court doubted "that it was impossible to obtain"

the information about the ties between the two entities before the

plaintiffs finally did.       And the court noted the plaintiffs'

initial complaint alleged there might be another corporation --

then named "Corporation ABC" -- that owned and operated the

hospital.     The court therefore thought the plaintiffs were "in a

poor position" to argue they could not have named Fundación Damas,

Inc. sooner, especially because their motion for leave to amend

                                   -6-
relied on publicly available documents to show that entity's

connection to Hospital Damas, Inc.3

           The plaintiffs respond by, in effect, disputing the

availability of one of those documents -- the Health Department

license.   They argue the license shows how important Fundación

Damas, Inc. is to their case. They contend the license establishes

that only Fundación Damas, Inc. had the authority to run the

hospital at the time the malpractice allegedly occurred.      They

further argue they could not have responsibly moved to add this

critical defendant until they had actually received the license.

And they tie up their argument by saying they did not get that

license from the Health Department until days before they filed

their motion.   Thus, they say, they acted swiftly in moving to

amend the complaint.

           But the plaintiffs' explanation is incomplete.   Even if

we were to agree that the license's receipt was a necessary

predicate for the plaintiffs' motion, we would still lack an

adequate explanation for why the plaintiffs took so long to get

that document. The plaintiffs do not say when they first requested

the license from the Health Department.   They also do not say how

     3
       The District Court also rejected the plaintiffs' argument
based on the Certificate of Need and Convenience. The court saw no
reason under Puerto Rico law why an owner of a health facility that
had the requisite Certificate could not lease the facility to its
wholly owned subsidiary, which it appeared that Fundación Damas,
Inc. had done.

                                -7-
long it took the Department to process their request.                Nor do they

point to anything in the record that would supply us with that

missing information.         Indeed, counsel for the plaintiffs conceded

at oral argument that he was unaware of anything in the record that

would "give us any indication" of the precise timing of the

plaintiffs' request to the Health Department.               And, when asked how

long it took the plaintiffs to receive the license after requesting

it from the Health Department, counsel responded only that he

"could not really tell [us] exactly," and that it was a "months-

long" process.4

               But without greater clarity about the timing, we cannot

know       whether   the   plaintiffs'    failure     to   pursue   the   license

diligently      best   explains   their        late-in-litigation    filing,    or

whether some reason beyond their control is instead to blame.                  And

our concern that the former may be the case is heightened because

the record shows the plaintiffs, by their own account, seem to have

known of Fundación Damas, Inc.'s connection to the hospital more

than a year before they say they first received the license from

the Health Department.

               Specifically, the plaintiffs acknowledge they knew in

late 2010 about Hospital Damas, Inc.’s bankruptcy filing, which not

only named Fundación Damas, Inc. as Hospital Damas, Inc.'s sole

       4
       The plaintiffs similarly failed to explain the precise
timing of their actions in their motions before the District Court.

                                         -8-
co-debtor, but also listed Fundación Damas, Inc. as the lessor for

the hospital property. And even if that filing for some reason did

not suffice to make the plaintiffs aware of those ties, the

plaintiffs do concede they became aware "in early 2011" "of the

details of Hospital Damas, Inc.’s relationship with Fundación

Damas, Inc.," a time that is itself potentially more than a year

before the plaintiffs filed their motion for leave to amend in

February 2012.

                 Thus, even if we accept that the plaintiffs could not

file their motion until they actually received the license, and

even       if,   beyond   that,   we   accept   that   the   plaintiffs   had   no

obligation to pursue the identity of "Corporation ABC" before

Hospital Damas, Inc. filed for bankruptcy,5 the record still leaves

unexplained the reason for a good chunk of the seemingly year-long

delay between the time the plaintiffs say they first learned of the

hospital's potential tie to Fundación Damas, Inc. and the date they

filed their motion to add that defendant to their complaint.                    In

       5
       In their supplemental motion, the plaintiffs claimed that,
during discovery, they sent a request to Hospital Damas, Inc. for
"all documents of ownership of Hospital Damas at the time of the
events alleged in the Complaint to the present time," but that
Hospital Damas, Inc. failed to respond to the request. Hospital
Damas, Inc., however, claimed in its opposition that they never
received such a discovery request. We need not resolve this issue,
though. Whether or not the plaintiffs made that discovery request,
we hold that the District Court did not abuse its discretion in
denying leave to amend because of the plaintiffs' inadequate
explanation of their delay in obtaining the license until right
before trial.

                                         -9-
light of our obligation to affirm the District Court's exercise of

discretion "for any adequate reason apparent from the record,"

Resolution Trust Corp., 30 F.3d at 253, and given the length of

unexplained delay involved, we cannot say the District Court abused

its discretion in concluding the plaintiffs failed to act with

sufficient    speed   in     seeking   to   add   the   new   defendant.   See

Calderón-Serra v. Wilmington Trust Co., 715 F.3d 14, 19-20 (1st

Cir. 2013) (affirming denial of motion for leave to amend in light

of eleven-month delay); Villanueva v. United States, 662 F.3d 124,

127 (1st Cir. 2011) (per curiam) (affirming finding of undue delay

when only four months had elapsed before motion was filed); Kay v.

N.H. Democratic Party, 821 F.2d 31, 34 (1st Cir. 1987) (per curiam)

(delay   of   less    than    three    months     constituted   undue   delay).

Accordingly, the District Court's denial of the plaintiffs' motion

for leave to amend the complaint to add the new defendant is

AFFIRMED.6

     6
       During the course of this appeal, we provisionally granted
Fundación Damas, Inc. leave to intervene. Because we affirm the
District Court without relying on any argument contained in
Fundación Damas, Inc.'s brief, we deny the motion to intervene.

                                       -10-