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Brief Fact Summary. Plaintiffs sued Defendant for personal injuries sustained from an accident involving a slide allegedly manufactured by Plaintiff. Defendant admitted in its answer to Plaintiffs’ complaint that it manufactured the slide based on the determination by three insurance companies that Defendant had manufactured the slide. After the statute of limitations had run, Defendant discovered that it had not manufactured the slide and sought leave to amend its answer, which the District Court granted.
Synopsis of Rule of Law. Under Rule 15(a) of the Federal Rules of Civil Procedure, a party can amend its pleading only with leave of court or consent of the other party. Leave shall be freely given. Leave to amend should only be denied if the party opposing the amendment can show bad faith, undue delay, or prejudice.
Issue. Did the District Court abuse its discretion by granting Defendant leave to amend its complaint and deny ownership of the slide?
Held. No. Affirmed. Under Rule 15(a) of the Federal Rules of Civil Procedure, a party may move to amend the pleadings at any time. As stated in Rule 15(a), leave to amend shall be “freely given as justice so requires.” The party opposing the motion to amend must demonstrate prejudice from such amendment. The trial court determined that there was no evidence of “bad faith, prejudice or undue delay.” Defendant’s reliance on three insurance companies’ determinations that Defendant manufactured the slide demonstrates that the admission was made in good faith. Plaintiffs will not be prejudiced to the extent that Defendant will prevail at trial and Plaintiffs will not be allowed to proceed against other parties. The relevant issue for the Court’s consideration is to contest the factual issue of who manufactured the slide. The insurer investigating manufacture of the slide was not lacking in diligence so as to preclude Defendant from litigating the issue.
Discussion. This case demonstrates the broad federal policy of Rule 15(a) of the Federal Rules of Civil Procedure granting leave to amend the pleadings. Note that the burden is on the party opposing the amendment to show prejudice or any misconduct by the moving party. In addition, the trial court has broad discretion when granting leave to amend.