DOOLEY, J. Plaintiff appeals from the trial court's grant of summary judgment to defendant in this negligence action. Plaintiff argues that the trial court abused its discretion by denying his motion to amend his complaint to add a new liability theory. We reverse and remand.
The original complaint, filed in August 2014, included a single negligence claim, in which he alleged that defendant owed a duty of reasonable care in the design, condition, and maintenance of his premises to those lawfully on his property; that the frost-covered roof presented an unreasonable risk of harm; and that defendant breached his duty of care by demanding that plaintiff work on the roof when it presented an unreasonable risk. Defendant pled as affirmative defenses that there was no privity between plaintiff and defendant.
The parties agreed by stipulation to conclude all discovery by November 13, 2015, and to present any legal challenge to liability by motions for summary judgment to be filed on or before December 31, 2015. Defendant filed a motion for summary judgment on January 4, 2016.
Three days after filing his response to defendant's motion for summary judgment, plaintiff filed a motion to amend his complaint to add distinct counts entitled premises liability and negligence/safe workplace. The court denied plaintiff's motion to amend his complaint based on three factors: (1) the claim in the amendment was entirely new and based on different facts; (2) the plaintiff did not show good cause for the delayed timing of the amendment; and (3) the case had been pending for eighteen months, discovery had closed, and defendant had filed a motion for summary judgment.
We have summarized the limit on the trial court's discretion to deny a motion to amend: "When there is no prejudice to the objecting party, and when the proposed amendment is not obviously frivolous nor made as a dilatory maneuver in bad faith, it is an abuse of discretion to deny the motion." Bevins v. King, 143 Vt. 252, 254-55, 465 A.2d 282, 283 (1983). We conclude by this standard that the trial court abused its discretion by denying plaintiff's motion to amend his complaint.
We recognize that we have previously affirmed a trial court's decision not to allow an amendment to pleadings after the other party has filed for summary judgment. Gauthier v. Keurig, 2015 VT 108, 200 Vt. 125, 129 A.3d 108.. But in Gauthier, the amendment's timing was not dispositive.
The absence of good cause for the delay is not a ground under Bevins to deny the motion to amend. The trial court did not find the proposed amendment to be "obviously frivolous" or "a dilatory maneuver in bad faith." Thus, the question comes down to whether granting the amendment would prejudice defendant.
There was no prejudice. Although the theory that defendant was plaintiff's employer was formally introduced in plaintiff's motion to amend, its genesis lies in defendant's answer, discovery, and motion for summary judgment. By the time the trial court considered the motion to amend, the issue of who was plaintiff's employer, and the effect of that determination, was squarely at issue in the case. It is clear from the summary judgment record that defendant did extensive discovery on the issue so the fact that discovery was closed when the court considered the motion to amend the complaint should not have weighed in favor of denying the motion.
Because plaintiff's claim in the motion to amend was addressed at length in defendant's own summary judgment motion, the court’s ruling on the motion to amend was governed by the policy in Rule 15(b) for claims "tried by express or implied consent of the parties." When a party, such as defendant here, impliedly consents to trial of issues not raised in the pleadings, Rule 15(b) states that "amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time."
The original complaint, filed in August 2014, included a single negligence claim, in which he alleged that defendant owed a duty of reasonable care in the design, condition, and maintenance of his premises to those lawfully on his property; that the frost-covered roof presented an unreasonable risk of harm; and that defendant breached his duty of care by demanding that plaintiff work on the roof when it presented an unreasonable risk. Defendant pled as affirmative defenses that there was no privity between plaintiff and defendant.
The parties agreed by stipulation to conclude all discovery by November 13, 2015, and to present any legal challenge to liability by motions for summary judgment to be filed on or before December 31, 2015. Defendant filed a motion for summary judgment on January 4, 2016.
Three days after filing his response to defendant's motion for summary judgment, plaintiff filed a motion to amend his complaint to add distinct counts entitled premises liability and negligence/safe workplace. The court denied plaintiff's motion to amend his complaint based on three factors: (1) the claim in the amendment was entirely new and based on different facts; (2) the plaintiff did not show good cause for the delayed timing of the amendment; and (3) the case had been pending for eighteen months, discovery had closed, and defendant had filed a motion for summary judgment.
We have summarized the limit on the trial court's discretion to deny a motion to amend: "When there is no prejudice to the objecting party, and when the proposed amendment is not obviously frivolous nor made as a dilatory maneuver in bad faith, it is an abuse of discretion to deny the motion." Bevins v. King, 143 Vt. 252, 254-55, 465 A.2d 282, 283 (1983). We conclude by this standard that the trial court abused its discretion by denying plaintiff's motion to amend his complaint.
We recognize that we have previously affirmed a trial court's decision not to allow an amendment to pleadings after the other party has filed for summary judgment. Gauthier v. Keurig, 2015 VT 108, 200 Vt. 125, 129 A.3d 108.. But in Gauthier, the amendment's timing was not dispositive.
The absence of good cause for the delay is not a ground under Bevins to deny the motion to amend. The trial court did not find the proposed amendment to be "obviously frivolous" or "a dilatory maneuver in bad faith." Thus, the question comes down to whether granting the amendment would prejudice defendant.
There was no prejudice. Although the theory that defendant was plaintiff's employer was formally introduced in plaintiff's motion to amend, its genesis lies in defendant's answer, discovery, and motion for summary judgment. By the time the trial court considered the motion to amend, the issue of who was plaintiff's employer, and the effect of that determination, was squarely at issue in the case. It is clear from the summary judgment record that defendant did extensive discovery on the issue so the fact that discovery was closed when the court considered the motion to amend the complaint should not have weighed in favor of denying the motion.
Because plaintiff's claim in the motion to amend was addressed at length in defendant's own summary judgment motion, the court’s ruling on the motion to amend was governed by the policy in Rule 15(b) for claims "tried by express or implied consent of the parties." When a party, such as defendant here, impliedly consents to trial of issues not raised in the pleadings, Rule 15(b) states that "amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time."
We hold that when an issue enters a case during the summary judgment phase in part through the party later opposing its consideration, as here, the issue is effectively being tried based on the implied consent of the parties, and thus a contemporaneous motion to amend a pleading to include that issue should be freely granted.
SCOVT NOTE. It has long been settled that it is error to deny a motion to amend on the grounds that the proposed complaint states a "new cause of action." Perkins v. Windsor Hosp. Corp., 142 Vt. 305, 313, 455 A.2d 810, 815 (1982) The oft-cited test in Perkins requires the trial court to consider the propriety of a motion to amend by examining four factors: (1) undue delay; (2) bad faith; (3) futility of amendment; and (4) prejudice to the opposing party. Id.
SCOVT NOTE. It has long been settled that it is error to deny a motion to amend on the grounds that the proposed complaint states a "new cause of action." Perkins v. Windsor Hosp. Corp., 142 Vt. 305, 313, 455 A.2d 810, 815 (1982) The oft-cited test in Perkins requires the trial court to consider the propriety of a motion to amend by examining four factors: (1) undue delay; (2) bad faith; (3) futility of amendment; and (4) prejudice to the opposing party. Id.
Leclair's explicit rejection of “absence of good cause for delay” as a basis to deny amendment means Perkins' "undue delay" now has either no or limited meaning independent of the issues of bad faith and prejudice, as stated in Bevins v. King, (“[W]hen there is no prejudice to the objecting party, and when the proposed amendment is not obviously frivolous nor made as a dilatory maneuver in bad faith, it is an abuse of discretion to deny the motion.")
Compare Ferrisburgh Realty Investors v. Schumacher, 2010 VT 6 (proper to deny an amendment that would require a continuance to accommodate additional discovery); Colby v. Umbrella, Inc., 2008 VT 20, ¶ 4, 184 Vt. 1, 955 A.2d 1082 (denial of a motion under Rule 15(a) may be justified based upon a consideration of undue delay, among other factors).
A motion during trial is not necessarily too late. In Bevins v. King,the Court reversed the trial court's denial of a motion to amend an answer made on the day of trial. In Lillicrap v. Martin 156 Vt. 165, 591 A.2d 41(1991) the Court affirmed the trial court’s discretion in allowing an amended answer on the sixth day of trial.
With stronger force, the pendency of a summary judgment motion is no barrier to amendment. In Gauthier v. Keurig the appellant argued and LeClair implicitly recognizes "[t]here simply is no rule… that requests to amend must be denied when the opposing party has filed a summary judgment [motion]" Leclair statesthat in Gauthier the amendment's timing was not dispositive.
(Yet more recent authority erroneously suggests in dictum that implied consent was key to LeClair, and is required whenever a motion to amend is made after summary judgment is pending. Bonk v Bonk, 2018 VT 15 ¶ 12.)
Note that under Rule 15(b) a motion to amend to conform to the evidence may be made “at any time, even after judgment.” By case law, the right of to amend under Rule 15(a) terminates only when judgment is entered. See Felis v. Downs Rachlin Martin, PLLC, 2015 VT 129, ¶¶ 26-27.
Standards for denial of a Rule 15 motion to amend pleadings
Under the rules of civil procedure, leave to amend the
complaint "shall be freely given when justice so requires." V.R.C.P.
15(a); Lillicrap v. Martin, 156 Vt. 165, 170, 591 A.2d 41, 43-44 (1989). The
principal reasons underlying the liberal amendment policy are (1) to provide
maximum opportunity for each claim to be decided on its merits rather than on a
procedural technicality, (2) to give notice of the nature of the claim or
defense, and (3) to enable a party to assert matters that were overlooked or
unknown to him at an earlier stage in the proceedings. Id. (quoting Bevins v.
King, 143 Vt. 252, 255, 465 A.2d 282, 283 (1983)).
In rare cases, denial
of a motion under Rule 15(a) may be justified based upon a consideration of the
following factors: "(1) undue delay; (2) bad faith; (3) futility of
amendment; and (4) prejudice to the opposing party." Colby v. Umbrella, Inc., 2008 VT 20, ¶4, 184 Vt. 1, 955
A.2d 1082. (quoting Perkins v. Windsor Hosp. Corp., 142 Vt. 305, 313, 455 A.2d 810,
815 (1982).
This means that "[w]hen there is no prejudice to the
objecting party, and when the proposed amendment is not obviously frivolous nor
made as a dilatory maneuver in bad faith, it is an abuse of discretion to deny
the motion." Bevins v.
King, 143 Vt. 252, 254-55, 465 A.2d 282, 283 (1983)).
Other factors may not be considered. For example, the Court recently held “the
absence of good cause for the delay [] does not implement a requirement under Bevins and it is not a ground to deny
the motion to amend.” LeClair v. LeClair, 2017 VT 34 ¶ 29
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