Evans v. B&E Pace Inv. LLC
| Decision Date | 08 March 2018 |
| Docket Number | No. 20170114-CA,20170114-CA |
| Citation | 424 P.3d 963 |
| Court | Utah Court of Appeals |
| Parties | Paul EVANS, Jeanette Evans, and Kern River Gas Transmission Co., Appellants, v. B&E PACE INVESTMENT LLC, GSH Geotechnical Inc., Sky Properties Inc., Eaglepointe Development LC, Smoot Real Estate, Ralph Cannon Real Estate, and Wilford W. Cannon, Appellees. |
Brent O. Hatch and Shaunda L. McNeill, Attorneys for Appellants Paul Evans and Jeanette Evans
John A. Snow, Alex B. Leeman, John A. Hutchings, and Burton G. Davis, Attorneys for Appellant Kern River Gas Transmission Co.
Benson L. Hathaway Jr., Analise Q. Wilson, and Ryan R. Beckstrom, Attorneys for Appellees B&E Pace Investment LLC, Sky Properties Inc., Eaglepointe Development LC, Smoot Real Estate, Ralph Cannon Real Estate, and Wilford W. Cannon, Craig C. Coburn and Brian D. Bolinder, Attorneys for Appellee GSH Geotechnical Inc.
¶1 Permission to amend pleadings should be "freely give[n]," see Utah R. Civ. P. 15(a)(2), especially where permission is sought at or near the end of fact discovery, before expert discovery, before any trial date has been set, and where the grounds for at least some of the amendments were first discovered only weeks before the end of the fact discovery period. Under the circumstances of this case, we conclude that the district court exceeded its discretion when it denied two motions to amend, and therefore reverse.
¶2 On August 5, 2014, a massive landslide (the Landslide) decimated a hillside in North Salt Lake, Utah. The Landslide was approximately 500 feet wide, 500 feet long, and 60 feet deep, and displaced between 300,000 and 400,000 cubic yards of earth and debris. Among the properties located near the bottom of the Landslide was a residential home owned by Paul and Jeanette Evans (collectively, Evans) and a tennis club (the Tennis Club). Both Evans and the Tennis Club claim that their properties were damaged by the Landslide.
¶3 On April 21, 2015, the Tennis Club sued the City of North Salt Lake, various developers and real estate entities (Developers), and John Does1 for causes of action related to the Landslide. Developers soon answered, and filed counterclaims against the Tennis Club as well as third-party claims against various entities, including Kern River Gas Transmission Co. (Kern River), GSH Geotechnical Inc. (GSH),2 and Evans. In July 2015, Evans answered Developers’ claims, and also filed counterclaims against Developers and various John Does for, among other things, negligence, nuisance, breach of fiduciary duty, and fraudulent non-disclosure. Later, in January 2016, the district court consolidated into this action a separate lawsuit filed by Kern River against Developers and GSH, in which Kern River brought claims for negligence, nuisance, and injunctive relief. After the consolidation, the lawsuit then pending before the district court involved, by our count, seventeen parties represented by fifteen different law firms.
¶4 In February 2016, the district court entered a stipulated case management order that arranged the various parties involved in the litigation into ten different "sides," and allowed for each "side" to conduct five elective depositions, over and above twenty-eight depositions that all parties agreed were essential. The order set the fact discovery deadline for September 30, 2016; the expert discovery deadline for April 28, 2017; and the deadline for dispositive motions for May 31, 2017. The district court subsequently extended each of those deadlines by ninety days, with the close of fact discovery set to occur around the end of December 2016.
¶5 Although the case management order makes no mention of it, the parties (apparently on their own) mutually decided to work toward a mediation and, in an effort to limit litigation costs, agreed that, prior to the mediation, they would limit themselves to written discovery and to six or seven depositions that were deemed the most critical. After completing that limited discovery, the parties attempted mediation as scheduled in June 2016, but were unable to reach a settlement at the mediation conference. The parties did not completely abandon settlement efforts, however; they continued to informally discuss the possibility of settlement, even after the June conference, and the mediator remained involved until December 2016.
¶6 After the mediation conference proved unsuccessful, the parties attempted to proceed with fact discovery pursuant to the case management order. They soon began to discuss dates for the remaining depositions, but coordinating the schedules of fifteen different law firms proved difficult and required significant lead time. Depositions noticed in July ended up taking place as late as November. Depositions noticed in September ended up taking place as late as December.
¶7 On June 10, 2016, as the parties were preparing for the mediation conference, and roughly six months before the end of fact discovery, Evans filed a motion for leave to amend their pleadings. Specifically, Evans sought permission to add negligence claims against GSH and another engineering firm related to their alleged involvement with geotechnical work on the hillside. Due to the impending mediation, Evans agreed to extend the deadline for any response to its motion to amend "until mediation was completed." Because the mediator remained involved and settlement discussions continued informally even after the failed mediation conference, Evans did not consider the mediation truly "completed" until December 2016, when the mediator’s involvement ended. Thus, Evans did not submit the June 2016 motion to amend for the court’s decision until December 9, 2016.
¶8 Meanwhile, in August 2016, Kern River filed its own motion seeking leave to amend its pleadings. Specifically, Kern River asked permission to add additional cross-claims against Developers alleging negligence, nuisance, and unjust enrichment. The parties did not postpone briefing on this motion, and Kern River submitted it for decision in due course. In October 2016, the district court granted Kern River’s motion and allowed the amendment to include the additional claims.
¶9 On December 13, 2016, with only a few weeks left in the fact discovery period, and while the parties were finishing up depositions, the district court consolidated yet another case into this action. In that other case, Questar Gas Company (Questar) had brought negligence and nuisance claims against the City of North Salt Lake related to the Landslide.
¶10 That same day, the district court denied Evans’s June 2016 motion to amend, concluding that the motion was untimely because, even though it had been filed in June, it had not been submitted for decision until December, and explaining that "[t]he close of the extended date of fact discovery is now only sixteen days away." A few days later, Evans asked the court to reconsider its ruling, asserting that any delay in submitting the motion for decision was due to professional courtesies Evans’s counsel had extended to GSH related to the ongoing settlement discussions. The district court denied the motion to reconsider.
¶11 Near the end of December, as the fact discovery period was ending, three additional motions to amend were filed. On December 29, 2016, Evans moved yet again to amend their pleadings. Evans again sought to add negligence claims against GSH (but this time not against the other firm). In addition, this time Evans sought to add various new claims (such as breach of fiduciary duty, civil conspiracy, and pattern of unlawful activity) against the existing Developers and/or their principals, including claims alleging that some of the Developer entities were the alter egos of their principals. On December 23, 2016, the Tennis Club filed a motion for leave to amend, seeking to add new claims against the existing Developers and/or their principals that were similar to the claims Evans sought to add. And on December 30, 2016, Kern River filed a motion seeking leave to amend, asking for permission to bring negligence claims against two engineering firms, Bingham and Geostrata.
¶12 All of the parties that moved to amend—the Tennis Club, Evans, and Kern River—asserted that the facts supporting the filing of many of these new claims did not come to light until the depositions taken between September and December 2016, and that they were therefore unable to bring these claims earlier.3 To take one specific example, Kern River asserts that a principal of one of the Developers initially testified that Bingham was not involved in the geotechnical work on the hillside, but that in one of the later depositions, a construction manager for one of the Developers testified that Bingham was indeed involved in the geotechnical work on the hillside.
¶13 The district court denied all three motions, explaining that "[w]hile no trial date has been set, it is clear that this case is in the advanced procedural stages of litigation and that alterations to claims at this point are untimely." The court also determined that "adding new parties and new claims at this late stage of litigation will result in prejudice to those parties," but the only prejudice the district court identified was that "fact discovery is closed" and that "[f]act discovery is a crucial element in preparing for trial."
¶14 Evans and Kern River now seek interlocutory review of the district court’s denial of their respective motions to amend.4 We granted them leave to appeal, and now consider their claims.
¶15 Both Evans and Kern River argue that the district court erred by denying their respective motions to amend. "We review a district court’s decision on a motion to amend under an abuse of discretion standard." Tretheway v. Furstenau , 2001 UT App 400, ¶ 7, 40 P.3d 649 ; see also Stichting Mayflower Mountain Fonds v. United Park...
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...on a motion to amend can be predicated on only one or two of the particular factors." Evans v. B&E Pace Inv. LLC , 2018 UT App 37, ¶ 20, 424 P.3d 963 (quotation simplified). "The applicability of the three factors will vary from case to case," but "in many cases, the factor that the [distri......