Lindey's, Inc. v. Professional Consultants, Inc.

Decision Date23 August 1990
Docket NumberNo. 90-084,90-084
Citation244 Mont. 238,797 P.2d 920
PartiesLINDEY'S, INC., a Minnesota Corporation, Plaintiff and Appellant, v. PROFESSIONAL CONSULTANTS, INC., a Montana Corporation, David Schurian, and the Estate of William C. Forrest, Deceased, Defendants and Respondents.
CourtMontana Supreme Court

Paul Neal Cooley, Skelton & Cooley, Missoula, for plaintiff and appellant.

John Tabaracci, Sullivan & Baldassin, Missoula, Jerome T. Loendorf, Harrison, Loendorf & Poston, Helena, for defendants and respondents.

HARRISON, Justice.

The Fourth Judicial District Court in Missoula County denied plaintiff Lindey's Incorporated's motions to file second and third amended complaints and granted summary judgment in favor of defendant Estate of Forrest. Lindey's, Inc. now appeals the District Court's decision. We affirm.

Two issues are presented for review:

1. Did the District Court err in denying Lindey's various motions to amend, to add experts, and to lengthen discovery schedules?

2. Did the District Court err in determining that Lindey's breach of warranty claim against the Estate of Forrest is barred by Sec. 28-2-904, MCA?

In the late 1970's, Lindey's, Inc. (Lindey's) was looking for property in Montana in order to open a restaurant. Lewis W. Lindemer is the sole stockholder and president of Lindey's. Lindemer was president and a member of the board of directors of Lindey's in 1978 when the corporation bought lots 1 and 3 of Seeley Lake Shore Sites from William C. Forrest. At closing for the sale of lots 1 and 3, at Lindemer's request, Forrest gave Lindemer a letter stating that he would employ a surveyor to have the property restaked according to the plat on file in Missoula County.

On the day of closing, the realtor called defendant Professional Consultants, Inc. (PCI) and arranged for a survey of the property. Defendant David Schurian, an employee and shareholder of PCI, performed the survey including a survey of the common boundary lines between lots 1 and 2.

Over the years, a dispute developed between Lindey's and its neighbor, Pat Goodover, concerning the common boundary between lots 1 and 2. Various surveys of the boundary were conducted. Finally, in 1984 Goodover filed suit against Lindey's and the Estate of Forrest and a trial was held in 1987. The trial resulted in PCI's survey being adjudged incorrect. On appeal the trial court was affirmed in Goodover v. Lindey's, Inc. (1988), 232 Mont. 302, 757 P.2d 1290. On October 25, 1988, Lindey's filed a complaint against Schurian and PCI for negligent surveying and breach of warranty and against the Estate of Forrest for breach of warranty. Lindey's claims that Forrest represented to Lindey's that the boundaries of lots 1 and 3 extend along certain general lines and that Forrest either actually or impliedly warranted that the actual lot lines would be in accordance with the survey. Lindey's asserts that Schurian and PCI, acting as agents of Forrest, made a negligent survey and, based on this survey, Lindey's made improvements within the described boundaries. Lindey's further asserts that it is entitled to damages resulting from the loss of value of improvements made and required to be removed by the judgment in Goodover v. Lindey's, the costs and damages awarded by the judgment, attorney's fees in defending and appealing the judgment, the costs of prosecuting this action and loss of the value of land not purchased.

On February 10, 1989, all parties to this action stipulated and agreed to deadlines for various activities, pursuant to Rule 16(b), M.R.Civ.P. The trial court ordered that the stipulation would govern the proceedings. The stipulation provided that all amendments to pleadings must be filed by July 1, 1989.

Lindey's filed its initial motion to amend on April 27, 1989. With none of the defendants opposing the motion, the trial court set a hearing on the matter for June 15, 1989. The June 15 hearing was continued without date. Therefore, it was not until the pretrial conference of August 8, 1989 that the trial court heard Lindey's first motion to amend. Since three months had passed from the time of filing at the pretrial conference, all defendants now opposed the motion as not being timely. At the pretrial conference the District Court ordered Lindey's to file the first amended complaint and required Lindey's to provide the court with a written order allowing the filing of the first amended complaint by August 17, 1989. Because Lindey's failed to provide the court with such order, the court, on August 23, 1989, issued another order denying Lindey's motion to file the first amended complaint.

Undaunted, Lindey's filed motions to file a second and third amended complaint. The second amended complaint is dated August 22, 1989 and the third amended complaint is dated August 29, 1989. Lindey's did not withdraw its previous motion before attempting to file its third amended complaint, thus forcing defendants to oppose both motions to amend. On August 29, 1989 Lindey's also filed a motion to extend the trial schedule in order to allow Lindey's more time to add and name expert witnesses, file amendments to the complaint, and complete discovery. The Estate of Forrest had filed a motion for summary judgment on August 10, 1989. PCI and Schurian filed a motion for summary judgment on September 29, 1989.

Following hearings on both motions for summary judgment, both motions to amend, and the motion to modify the scheduling order, the District Court issued its opinion and order. The court granted defendant Estate of Forrest's motion for summary judgment on the basis that the Estate of Forrest is not vicariously liable for the negligence of an independent contractor and Lindey's claim for breach of warranty is barred by Sec. 28-2-904, MCA. The court denied the motion of defendants PCI and Schurian for summary judgment, finding that a genuine issue of material fact remained relating to the date of discovery by Lindey's of its cause of action. The District Court denied all three of Lindey's motions, stating "The [District] Court does not find good cause required by Mont.R.Civ.P (b) to modify the Scheduling Order, nor does the Court find that justice requires amendment in this case as required by Mont.R.Civ.P. 15(a)." Lindey's now appeals the District Court's decision denying its motions to amend the complaint and modify the scheduling order and granting Estate of Forrest's motion for summary judgment.

Issue 1: Motions to amend, add experts, and lengthen

discovery schedules

The District Court summarily disposed of all Lindey's motions. Regarding the motion to amend, the court stated only that justice does not require the amendments be allowed under Rule 15(a) of M.R.Civ.P. Of the motion to modify the scheduling order to allow experts to be added and discovery lengthened, the court noted there was no good cause to grant the motion as required by Rule 16(b), M.R.Civ.P.

Lindey's contends that, although it failed to meet time requirements imposed by the District Court, its amendment to add experts, extend discovery and amend pleadings should be granted in the interest of justice in the absence of substantial prejudice to the other parties. Rule 15(a), M.R.Civ.P., covering amendments reads in pertinent part as follows:

[A] party may amend his pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires.

The decision to grant or deny a motion to amend lies within the discretion of the trial court. Foman v. Davis (1962), 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222, 226. The District Court's decision will be reversed only for an abuse of discretion. Roberts v. Arizona Bd. of Regents (9th Cir.1982), 661 F.2d 796, 798; Mende v. Dun & Bradstreet, Inc. (9th Cir.1982), 670 F.2d 129, 131.

As this Court has previously noted, Rule 15(a), M.R.Civ.P., provides for liberal amendment of pleadings but does not require amendments to be allowed in all instances. Fry v. Heble (1981), 191 Mont. 272, 274, 623 P.2d 963, 964. While the rule favors allowing amendments, a trial court is justified in denying a motion for an apparent reason "such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by allowance of the amendment, futility of the amendment, etc." Foman at 182, 83 S.Ct. at 230, 9 L.Ed.2d at 226. See also Lien v. Murphy Corp. (1982), 201 Mont. 488, 491, 656 P.2d 804, 806, and Sooy v. Petrolane Steel Gas, Inc. (1985), 218 Mont. 418, 421, 708 P.2d 1014, 1016.

The party seeking to overturn the trial court's decision must demonstrate that an abuse of discretion occurred. Izaak Walton League of America v. St. Clair (8th Cir.1974), 497 F.2d 849, 854. In this case, Lindey's has failed to show that the trial court abused its discretion in failing to allow second and third amended complaints. Almost two months after the deadline for amending pleadings, the trial court, in accordance with Rule 15(a), M.R.Civ.P., granted Lindey's first motion to file an amended complaint. When Lindey's failed to file the amended complaint...

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