Kiser v. General Elec. Corp.

• Decision Date: 27 October 1987
• Docket Number: No. 87-1023,87-1023
• Parties: KISER, Annie C. and Kiser, Annie C. as Administratrix of the Estate of Kiser, Everett W., Appellant v. GENERAL ELECTRIC CORPORATION, Parker-Hannifin Corporation and Eaton Corporation and Does 1-5.
• Court: U.S. Court of Appeals — Third Circuit

Page 423

831 F.2d 423

9 Fed.R.Serv.3d 399

KISER, Annie C. and Kiser, Annie C. as Administratrix of the Estate of Kiser, Everett W., Appellant v. GENERAL ELECTRIC CORPORATION, Parker-Hannifin Corporation and Eaton Corporation and Does 1-5.

No. 87-1023.

United States Court of Appeals, Third Circuit.

Argued July 6, 1987.

Decided Oct. 14, 1987.

As Amended Oct. 27, 1987.

Valerie Ansel Karpman (argued), Bailey and Karpman, San Francisco, Cal., Michael Kleeman, Kleeman & Abloeser, P.C., Philadelphia, Pa., for appellant.

John M. O'Brien, III (argued), O'Brien and O'Brien, Philadelphia, Pa., for appellee Parker-Hannifin Corp.

Before HIGGINBOTHAM and BECKER, Circuit Judges, and BARRY, District Judge. ^*

OPINION OF THE COURT

A. LEON HIGGINBOTHAM, JR., Circuit Judge.

This appeal concerns a district court order that affirmed its prior order dismissing a complaint without first considering appellant's request, or her subsequent motion, for leave to amend her complaint. We find that the district court should have granted appellant's request or her motion for leave to amend, and that the district court thus acted improperly when it dismissed the complaint without even addressing appellant's request or motion to amend. Accordingly, we will reverse the order of dismissal and remand to the district court with directions to grant leave to amend the complaint to include an allegation that appellee-corporation's state of incorporation is Ohio.

I.

This action was brought by the parents of Tony W. Kiser, deceased, to recover damages for his allegedly wrongful death. ¹ The initial complaint, filed December 5, 1985, alleged that the decedent, while on active duty as a fireman in the United States Navy, was killed on February 23, 1984, aboard the U.S.S. Guam, which was then stationed in the Mediterranean Sea off the coast of Lebanon. He died from injuries allegedly caused by the failure and malfunction of certain component parts of a hatch that allegedly had been manufactured by the defendants, sold to the Navy and installed on the U.S.S. Guam.

The initial complaint failed adequately to allege the basis of the district court's diversity jurisdiction. On February 6, 1986, then-defendant Eaton Corporation ("Eaton") moved to dismiss the complaint for that reason. On February 11, 1986, appellee Parker-Hannifin Corporation ("Parker-Hannifin") joined Eaton's motion to dismiss. Thereafter, on February 12, 1986, the district court held a telephone conference with counsel for the parties. Counsel for appellant Annie C. Kiser ("Kiser") was informed at that time that, pending further notification from the court, the pending motions of Eaton and Parker-Hannifin required no immediate response from her. ²

One week later, on February 19, 1986, Kiser filed an amended complaint where she again failed specifically to allege the state of incorporation of Parker-Hannifin. The amended complaint did, however, allege that Parker-Hannifin was not a North Carolina corporation. ³ It also added as defendants John Does one through five, who were alleged not to be incorporated, nor to have their principal places of business, in North Carolina. On March 27, 1986, Parker-Hannifin filed its answer. Notwithstanding the district court's direction that Kiser could defer any response to the pending motions, the district court thereafter granted those motions of Parker-Hannifin and Eaton to dismiss the amended complaint for insufficient jurisdictional allegations. Kiser v. Parker-Hannifin Corp., No. 85-6997, mem. op. at 2 (E.D.Pa. June 9, 1986).

By letter dated June 24, 1986, Kiser's counsel asked the district court to vacate its dismissal order, referring to the district court's February 12th directive deferring consideration of the motions to dismiss. There followed another telephone conference involving counsel and the district court on July 2, 1986, which resulted in an order vacating the dismissal order of June 9, 1986, ⁴ and stipulating to dismissal with prejudice on her claims against Eaton and then-defendant General Electric Corporation. Kiser v. Parker-Hannifin Corp., No. 85-6997, stipulation & order at 1 (E.D.Pa. July 11, 1986). In addition, this stipulation and order provided that:

3. Plaintiffs and Defendant, Parker-Hannifin Corporation shall have thirty (30) days from the date of [the] July 2, 1986 conference within which to attempt to resolve plaintiffs' claim that diversity jurisdiction is proper; in the event of a failure by plaintiffs and Parker-Hannifin Corporation to reach agreement on this issue, it is Stipulated and Agreed that defendant, Parker-Hannifin Corporation may move the Court upon the end of the said thirty (30) day period for reinstatement of the Order dismissing the Complaint as to Parker-Hannifin Corporation for lack of diversity jurisdiction and/or lack of properly pleading the existence of diversity jurisdiction.

Id. at 1-2.

Kiser's counsel then attempted to obtain consent to allow her to amend the complaint to allege that Parker-Hannifin's state of incorporation is Ohio. ⁵ Parker-Hannifin, however, would not consent to this amendment. Appendix for Plaintiffs-Appellants ("App.") at 151a p 17. On August 28, 1986, Parker-Hannifin moved to reinstate the June 9th dismissal order, and, on September 12, 1986, Kiser filed its opposition to this motion and requested leave to amend her complaint. On September 23, 1986, the district court granted Parker-Hannifin's motion on the basis of paragraph three of the July 11th stipulation. Kiser v. Parker-Hannifin Corp., No. 85-6997, mem. op. at 4 (E.D.Pa. Sept. 23, 1986). The district court did not mention, and, thus, apparently did not consider, Kiser's then-pending request for leave to amend her complaint.

On October 8, 1986, Kiser moved for reconsideration of the second dismissal order and, again, for leave to amend her complaint. This motion was accompanied by a proposed second amended complaint stating that Parker-Hannifin is an Ohio corporation. Parker-Hannifin filed its opposition to this motion on October 17, 1986, asserting therein for the first time that the five John Doe defendants destroyed diversity of citizenship. ⁶

On December 11, 1986, the district court denied Kiser's motion for reconsideration and affirmed the second dismissal order, noting that paragraph three of the July 11th stipulation mandated that the parties "shall have thirty (30) days from the date of July 2, 1986 conference within which to attempt to resolve [Kiser]'s claim that diversity jurisdiction is proper. The use of the word 'shall' indicates that the 30 day time limit was intended to be mandatory, not permissive." Kiser v. Parker-Hannifin Corp., No. 85-6997, mem. op. at 4 (E.D.Pa. Dec. 11, 1986) (original emphasis). At the time of this final dismissal order, the district court again did not mention Kiser's then-renewed motion for leave to amend her complaint. Our appellate jurisdiction over this matter is conferred by 28 U.S.C. Sec. 1291 (1982).

II.

The first question we must address is whether the district court erred when it failed to consider Kiser's motions for leave to amend her complaint prior to addressing Parker-Hannifin's motions to dismiss. The decision of a district court to grant or deny leave to amend is reviewed only for an abuse of discretion. See Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330-31, 91 S.Ct. 795, 802, 28 L.Ed.2d 77 (1971); Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962); Sanders v. Clemco Indus., 823 F.2d 214, 216 (8th Cir.1987); Lewis v. Curtis, 671 F.2d 779, 783 (3d Cir.), cert. denied, 459 U.S. 880, 103 S.Ct. 176, 74 L.Ed.2d 144 (1982); Heyl & Patterson Int'l, Inc. v. F.D. Rich Housing of the Virgin Islands, Inc., 663 F.2d 419, 425 (3d Cir.1981), cert. denied sub nom. F.D. Rich Housing of the Virgin Islands, Inc. v. Government of the Virgin Islands, 455 U.S. 1018, 102 S.Ct. 1714, 72 L.Ed.2d 136 (1982). Even after a responsive pleading has been filed, however, great liberality in allowing amendment of an initial pleading is often appropriate, especially when an amendment will further the ends of justice, effectuate presentation of a suit's merits and not prejudice the opposing party. See generally Hirshorn v. Mine Safety Appliances Co., 101 F.Supp. 549, 552 (W.D.Pa.1951), aff'd, 193 F.2d 489 (3d Cir.1952). For these reasons, the Federal Rules of Civil Procedure provide that leave to amend "shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). "The Federal Rules reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits." Conley v. Gibson, 355 U.S. 41, 48, 78 S.Ct. 99, 103, 2 L.Ed.2d 80 (1957). In addition, by federal statute, "[d]efective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts." 28 U.S.C. Sec. 1653 (1982). This statute applies in particular to amendments that affect a court's diversity jurisdiction, and it permits amendments broadly so as to avoid dismissal of diversity suits on technical grounds. See Moore v. Coats Co., 270 F.2d 410, 412 (3d Cir.1959). Accordingly, it is not only within the power, but it is a duty, of a federal court to consider on the merits a proposed amendment of a defective allegation once the court's attention is called to the defect. See generally Howard v. De Cordova, 177 U.S. 609, 614, 20 S.Ct. 817, 819, 44 L.Ed. 908 (1900).

In this case, the district court did not mention Kiser's requests for leave to amend the complaint in either of its memorandum opinions. The only apparent reason for this effective denial of Kiser's requests was the parties' failure to resolve the diversity issue pursuant to paragraph three of the July 11th stipulation. See Kiser, No. 85-6997, mem. op. at 4 (E.D.Pa. Dec. 11, 1986); Kiser, No. 85-6997, mem. op. at 3-4 (E.D.Pa. Sept. 23, 1986). The...