Owen v. Superior Court of State of Ariz., In and For Maricopa County

• Decision Date: 28 July 1982
• Docket Number: No. 16055-SA,16055-SA
• Citation: 649 P.2d 278,133 Ariz. 75
• Parties: Jeffrey Allen OWEN and Barbara Owen, his wife, Petitioners, v. SUPERIOR COURT OF the STATE OF ARIZONA, In and For the COUNTY OF MARICOPA; The Honorable William T. Moroney, a Judge thereof; L. A. Donald and Jane Doe Donald, his wife; and Thunderbird Freight Lines, Inc., an Arizona corporation, Respondents.
• Court: Arizona Supreme Court

Page 278

649 P.2d 278

133 Ariz. 75

Jeffrey Allen OWEN and Barbara Owen, his wife, Petitioners, v. SUPERIOR COURT OF the STATE OF ARIZONA, In and For the COUNTY OF MARICOPA; The Honorable William T. Moroney, a Judge thereof; L. A. Donald and Jane Doe Donald, his wife; and Thunderbird Freight Lines, Inc., an Arizona corporation, Respondents.

No. 16055-SA.

Supreme Court of Arizona, In Banc.

July 28, 1982.

Udall, Shumway, Blackhurst, Allen, Lyons & Davis by Dennis P. Blackhurst, John H. Lyons, Mesa, for petitioners

Snell & Wilmer by H. William Fox, Michael R. Palumbo, Phoenix, for respondents L. A. Donald and Thunderbird.

FELDMAN, Justice.

This special action proceeding challenges an order of the trial court denying petitioners' motion to amend the complaint in order to assert a claim for punitive damages. We accepted jurisdiction pursuant to Rule 8, Rules of Procedure for Special Actions, 17A A.R.S. We now find that the scope of the trial court's orders denying the motion to amend was an abuse of discretion, and we remand the case for proceedings consistent with this opinion.

The action below is a tort claim brought by plaintiffs-petitioners, Jeffrey and Barbara Owen (Owen) against L. A. Donald and Earl Donald (Donald) and Thunderbird Freight Lines, Inc. (Thunderbird). The claim arises out of a collision between two tractor-semitrailer rigs. Discovery in the case indicates that in the early morning hours of October 9, 1979, Jeffrey Owen was driving a truck on I-10 toward Phoenix when he stopped his truck in the emergency lane. L. A. Donald was driving a truck and semitrailer on the same road, also heading toward Phoenix. ¹ Donald passed a vehicle by moving into the fast lane of Interstate 10, and then turned back toward the right-hand lane, but continued directly across that lane and struck the parked vehicle occupied by Owen. There is evidence that just prior to the accident Donald's vehicle had been weaving down the road and that Donald was, perhaps, dozing when he ran into Owen's truck. Owen sustained very serious injuries when thrown from the seat of his truck.

The original complaint ² was filed on December 20, 1979. Both Thunderbird and Donald were served. Service on Donald was accomplished at the Donald residence in Palm Springs, California. Thunderbird filed an answer on January 9, 1981 and denied liability for Donald's actions. Donald did not answer the complaint, and his default was entered. No judgment has been taken against him. In the original complaint, Owen claimed that the accident was caused by Donald's negligent, careless and reckless operation of a trailer rig. Thunderbird, as Donald's employer or lessor, was alleged to be vicariously liable for Donald's negligence. The original complaint did not specifically seek recovery of punitive damages.

On March 21, 1980, plaintiffs filed a motion to set, and trial was then set for October 14, 1980. Various continuances were granted because Owen's medical condition was not stationary. Eventually, a "firm" trial setting was made for November 2, 1981, by a minute entry which provided: "This is a firm trial setting. A continuance of the trial will be granted only upon showing of good cause consistent with the policies of the Civil Reduction Project." ³

Nevertheless, on October 16, 1981, the parties jointly filed a motion for continuance, stating that Owen's treating physician had advised that "plaintiff's condition is not yet stable and ... the parties believe ... it would be inappropriate to proceed to trial until there has been sufficient time for his condition to stabilize." Accordingly, the trial was continued to May 24, 1982.

All during this time, plaintiffs had made attempts to locate Donald and take his deposition. Plaintiffs did not undertake independent measures to locate Donald but, rather, inquired of defense counsel with regard to Donald's whereabouts and Thunderbird's ability to produce him for deposition. Through mutual mistake, evidently resulting from erroneous information provided by Thunderbird, both counsel believed that Donald's whereabouts were unknown. Actually, Donald was still located at the Palm Springs address at which he had been served with summons and complaint.

Eventually, plaintiffs decided not to rely further upon the defense and, by their own efforts, located Donald at his Palm Springs address. He was interviewed in December of 1981. At that time, plaintiffs' counsel first became aware of certain inconsistencies in the driver's logs which Donald had kept pursuant to Interstate Commerce Commission or United States Department of Transportation (DOT) regulations. When analyzed, the log entries at least supported an argument that Donald had violated DOT regulations which both limit the number of hours a driver may stay on the road and prescribe certain rest periods. After some weeks of attempting to get copies of Donald's logs for the few days prior to the accident, plaintiff's counsel obtained some further information and documentation from co-counsel in Washington, D. C. These arrived in March 1982, ⁴ and Donald's deposition was then reset for March 26, 1982. At the time of the deposition of Donald in Palm Springs on March 26, 1982, plaintiffs' counsel were allowed to look at the logs, but were unsuccessful in obtaining copies because defense counsel would not consent to their delivery to plaintiffs' counsel. ⁵

The motion for leave to file the second amended complaint was then filed with the court on April 6, 1982, some six weeks prior to the "firm trial date" of May 24 and The motion to amend was denied by minute entry order dated April 22, 1982. Plaintiffs then moved for reconsideration and rehearing, renewing the motion for leave to amend and filing a second form of proposed amended complaint. This proposed form of complaint alleged that Donald had been grossly negligent and that Thunderbird was therefore vicariously liable for both compensatory and punitive damages; ⁶ it also contained allegations of Thunderbird's independent gross negligence. Thus, by the second proposed form of the second amended complaint, plaintiffs sought punitive damages from Thunderbird both on the theory of vicarious liability and that of Thunderbird's independent gross negligence. This second attempt to amend was filed on April 27, 1982, and was equally unsuccessful; on May 18, 1982, the trial court made its minute entry order denying the motion to reconsider and the motion to amend. Plaintiffs claim that the order of April 22 denying the motion to amend and that of May 18, 1982 denying the motion for reconsideration and motion to amend were both an abuse of discretion.

almost three weeks prior to the discovery "cutoff date" which had been set by the trial court. The proposed form of the second amended complaint which was filed with the motion to amend contained allegations that Donald had been grossly negligent in his driving and that Thunderbird had been independently grossly negligent in its conduct by encouraging or permitting Donald to violate DOT regulations. Plaintiffs prayed for an award of punitive damages against Thunderbird on the basis of these allegations of Thunderbird's own, grossly negligent conduct. This was the first time that plaintiffs had alleged any independent negligence on the part of Thunderbird.

EFFECT OF THE TRIAL COURT'S RULING

On April 28, after having denied the first motion to amend, the trial judge heard oral argument on the motion to reconsider and to grant leave to amend by allowing the filing of the second form of proposed amended complaint. At that time the trial court indicated from the bench that the "main reason that I did not grant the (initial) motion to amend ... was that I felt you had run out of time for a punitive damage claim.... I did not accept your argument that you were unable to pursue that claim at an earlier time ...." Commenting, therefore, that he would re-read the original complaint to see if it set forth a punitive damage claim and would deny the motion to reconsider if it did not, he took the motion under advisement. Evidently concluding that the original complaint did not actually plead a claim for punitive damages, ⁷ he eventually denied the motion to reconsider and the second motion to amend by the minute entry order of May 18, 1982.

Thus, the breadth of the trial court's rulings is such that plaintiffs were prevented from amending the complaint to allege a claim for punitive damages on either of the following theories:

A. That Donald was grossly negligent and that Thunderbird is vicariously liable for such gross negligence and is thus vicariously liable for punitive damages.

B. That Thunderbird was grossly negligent in failing to properly supervise Donald's compliance with DOT regulations and is liable for punitive damages because of its own, independent acts of gross negligence.

The two theories present different issues, and will be dealt with separately in the remaining portion of the opinion.

LEGAL PRINCIPLES APPLICABLE

The parties more or less agree on the governing principles of law. Leave to amend is discretionary, but amendments will be liberally allowed; trial on the merits of the claim is favored, and amendment will be permitted unless there has been undue delay, dilatory action or undue prejudice. See Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962); Spitz v. Bache & Co., 122 Ariz. 530, 596 P.2d 365 (1979); Rule 15(a); Arizona Rules of Civil Procedure, 16 A.R.S. "Mere delay"-the mere fact that the attempt to amend comes late-is not justification for denial of leave to amend. Hageman v. Signal L. P. Gas, Inc., 486 F.2d 479, 484 (6th Cir. 1973). "Notice and substantial prejudice to the opposing party are critical factors in determining whether an amendment should be granted." Id. To justify denial of the motion, there must be "undue" delay, bad faith, dilatory motive, repeated failure to cure deficiencies by previous amendments or...