Civ Pro 2 Notes 9/3/04

More on Zielinkski v. Philadelphia Piers, Inc.

The end result here is that the court requires that there is a deemed admission that PPI is the owner of the forklift, which means, essentially, they’ll be subject to liability if it can be proved that they were negligent. The judge gives us several reasons for this: (1) It was an ineffective denial under the Rules. A proper denial would have broken down the component parts, which would have been a signal to the plaintiff that the plaintiff sued the wrong party. The plaintiff could have then amended his pleadings. (2) The judge finds that there was no bad faith. This is often a consideration when judges decide what to do on the pleadings. What really underlies this case is the party in interest here: the insurance company, which insures both PPI and CCI. As a practical matter, neither defendant will pay the judgment. The insurance company will pay. So it doesn’t really matter who gets sued! The liability will pass through. But you can’t ignore all the Federal Rules of Civil Procedure to get to that result: so the judge says that it’s an ineffective denial. But we can see how this fact colors the procedural ruling. It seems like a harsh penalty, but in reality it may not be since the insurance company pays either way!

Affirmative defenses – Layman v. Southwestern Bell Telephone Co.

The classic defense is the statute of limitations. Affirmative defenses must be set forth affirmatively! There’s a big list in the rules. If you fail to set out your defenses in your answer, you can have big problems! Bell is laying cable on Layman’s land. She thinks that they’ve trespassed on her land, causing the value of her land to depreciate. They dug a hole in her land and buried a cable…hmm. What’s the response of Bell? They ultimately claim that they had an easement granted by a previous owner to a predecessor company. The phone company made a special denial: it’s a general denial. Bell denied everything and demanded proof of everything in the complaint. You can actually do this in some states! But in federal court, you can’t just sloppily deny everything. Never do a general denial in federal court! There will be something that you’ve ineffectively denied that gets admitted! Bell wins at trial because of the easement evidence that the judge lets in. Was that evidence proper? It depends on whether they should have told her sooner (in their answer).

Layman argues her case in the Court of Appeals. She says that an easement must be pleaded as an affirmative defense, but it turns out that it’s not listed in the Missouri equivalent of the Federal Rule! But we go under the “other matter” phrase of the rule. The test is that if there are any facts that would let the defendant avoid any legal responsibility, the defendant must put them in the answer. That’s the case here! What should have happened is that Bell should have had a general denial in their answer, then their affirmative defense dealing with the easement. Yeazell tries to point out what motivates the court to find some things as affirmative defenses and other things not affirmative defenses. Consider the blueprint for the case: the pleadings spell out to the parties what is at issue. When you get to the trial, Layman has no idea that there will be this easement evidence. There is a surprise and notice element embodied in the court’s application of this rule. These pleading rules are used to foster notice and avoid surprise.

What if easement evidence had come out in the discovery phase? Then there would have been no surprise. Layman would have had notice and would have been able to properly proceed to trial on the merits. The court says that Bell should have said up front if they had an easement. The case isn’t tossed out, but rather it’s remanded for a new trial.

Some states, like New York, codify this idea. They require that “all matters, which if not pleaded would be likely to take the adverse party by surprise or would raise issues of fact not appearing on the face of a prior pleading” must be in the answer. This gets away from having to characterize every defense as affirmative or not. So, if in doubt, plead everything if you’re not sure whether it’s an affirmative defense. If you think you have any colorable argument for it, list it. You can always drop it later. But don’t be stupid! You might get Rule 11’d.

Amendments

These relate both to amending the complaint and amending the answer. This is in Rule 15. There are three ways to amend: one way for the plaintiff, one way for the defendant, and one way the judge can help you out. You may amend once “as a matter of course” before you get the answer. This is basically a plaintiff’s rule. The plaintiff files a complaint, and you can amend it once before the answer comes back. If there is no responsive pleading due (like an answer, because there’s nothing that comes after it), you have 20 days to amend it. Typically, you also have 20 days to answer the complaint, so it’s kind of a mirrored rule. If you don’t qualify for one of these two windows, you must ask for the leave of the court, which will be freely given as justice requires. But just what does justice require?

Beeck v. Aquaslide ‘N’ Dive Corp.

Beeck gets injured by a waterslide. Doh! He sues the manufacturer. He sues Aquaslide on product liability claims. They bring in the insurance companies. They all check out the slides and they’re positive that Aquaslide really made it. After the lawsuit is filed, Aquaslide answers, and in the answer they admit that they make the slide. On the basis of the insurance companies telling Aquaslide that it was their slide, they say in discovery that it really was their slide. The statute of limitations runs! Now the president of the company goes to look at the slide, and lo and behold, it’s not an Aquaslide after all! In his deposition, he says so. After the statute of limitations has run out, Aquaslide wants to amend their answer to change their response as to whether it was really their slide. They’re obviously out of the 20 day window, so they have to throw themselves on the mercy of the court! Why didn’t this happen in Zielinski? It turns out that the Rule didn’t exist then! That would have been the appropriate procedural remedy if it had existed at the time.

There’s a Supreme Court case on this: Foman v. Davis gives us a test. Leave to amend will be freely given in the absence of any reason that leave shouldn’t be granted. Courts mustn’t allow delay, bad faith, or prejudice. Is there a good reason for why you messed up in the first place? Will fixing it not hurt the other side too much? They’ll always be hurt some because your being better off always makes them at least a little worse off. Let’s apply the law. Aquaslide is not said to have acted in bad faith because their answer and interrogatory responses were based on the insurance company, and you’d think that their investigation would be accurate! The court says that “blame should be shared equally”…the plaintiff could have made this discovery in the course of their own investigation…but then again, if the insurance company couldn’t tell, how could the plaintiffs? Did the plaintiffs really do anything wrong? There’s a good reason to grant leave to amend, though.

The plaintiff says that there is prejudice, though, because the statute of limitations has run! The plaintiff can’t turn around and sue the true manufacturer for personal injury. But the court says that the plaintiff might have causes of action that can get around the statute of limitations, the court says that the prejudice isn’t so great as the plaintiff says. There’s a later state court suit filed by the plaintiffs against Aquaslide for misrepresentation in their federal pleadings (lying in the federal lawsuit) because it was discovered that the company knew there were counterfeit slides all over the country! It wasn’t a one time thing! That’s why the president went to go and look: he knew ahead of time that it might not be their slide. Armed with that knowledge, the state courts were much more generous with the plaintiffs.

Statute of limitations and relating back

Absent some absolute cutoff, you can always beg the court to amend. But if the statute of limitations has run, the cause of action is cut off. Rule 15(c) talks to us about what we can do with regard to amending our petitions and having those amendments relate back to when we initially filed the complaint. This is a tool to get around limitations. If we can get our amendment to relate back, then we’ve avoided the statute of limitations problem. It will relate back if it relates to the same “conduct, transaction, or occurrence”. This was an unclear, problematic amendment when it was adopted, but now there is more clarity about when it applies.

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