Bahre v. Liberty Group, Inc.

2000 ME 75, 750 A.2d 558, 2000 Me. LEXIS 78
CourtSupreme Judicial Court of Maine
DecidedApril 28, 2000
StatusPublished
Cited by26 cases

This text of 2000 ME 75 (Bahre v. Liberty Group, Inc.) is published on Counsel Stack Legal Research, covering Supreme Judicial Court of Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bahre v. Liberty Group, Inc., 2000 ME 75, 750 A.2d 558, 2000 Me. LEXIS 78 (Me. 2000).

Opinions

[559]*559RUDMAN, J.

[¶ 1] Liberty Group, Inc., Liberty Management, Inc., and Michael A. Liberty, individually, (collectively Liberty) appeal from a summary judgment entered in the Superior Court (Cumberland County, Mills, J.) in favor of Robert P. Bahre. Liberty asserts that the court abused its discretion when it (1) denied Liberty’s motion to amend its answer and (2) granted Bahre’s motion to strike two affidavits, and that the court erred when it granted Bahre a summary judgment. Finding neither abuse of discretion nor error, we affirm the judgment.

I.

[¶2] On July 31, 1996, Bahre and Liberty entered into a Forbearance Agreement, Release and Guaranty. Katahdin Corporation, Liberty Group, Inc., Liberty Management Inc., and Michael A. Liberty, individually, guaranteed payment of $1,000,000 by June 30, 1997, to Bahre to satisfy a $1,127,368.85 judgment Bahre held against Katahdin Corporation. The agreement provided for three payments: $600,000 by December 31, 1996; $100,000 by March 1, 1997; and $300,000 by June 30, 1997. The contract included a full integration clause that read:

This Agreement constitutes the entire agreement among the parties, superseding any prior written or other understandings and shall not be modified except by a written amendment signed by each of the parties.

In return for Liberty’s promise to pay $1,000,000, Bahre agreed to forbear his right to seek the appointment of a receiver for Katahdin Corporation, Liberty Group, Inc., and Liberty Management, Inc. Michael Liberty was a corporate officer and shareholder of Katahdin Corporation.

[¶ 3] Bahre received the first $600,000, pursuant to the forbearance agreement, but he has yet to receive the remaining $400,000. Bahre filed a complaint in Superior Court seeking the money owed on the contract. Liberty filed an answer in which Liberty admitted entering into the forbearance agreement. The answer did not deny that Liberty owed Bahre $400,000.

[¶ 4] After Liberty filed its answer admitting to the contract, Bahre filed a motion for a summary judgment. Liberty then filed a motion to amend its answer to include a counterclaim — Liberty filed this motion to amend four days after it could have done so as a matter of course. Liberty's motion did not provide a legal or factual basis for the counterclaim. Liberty was represented by the same attorney for the answer and motion to amend, yet Liberty’s only justification for the amendment of the unspecified omitted counterclaim was that Liberty had retained new counsel who intended to add a new counterclaim.1

[¶ 5] In response to Bahre’s motion for a summary judgment, Liberty submitted two affidavits asserting that the contract was unenforceable because it was induced by Bahre’s fraudulent misrepresentations. Liberty’s new attorney, Daniel G. Lilley, signed an affidavit stating that he was retained by Michael Liberty; that he had reviewed the “entire facts” of the case; and that the facts indicated that Liberty should file a counterclaim against Bahre for fraud. Michael Liberty also submitted an affidavit stating that Bahre’s promise to obtain NASCAR events for the Oxford Plains Speedway was the only reason he entered into the forbearance agreement. Liberty’s affidavit maintained that his attorney would, with leave of court, assert “the affirmative defense of fraud” and the counterclaim of slander.

[¶ 6] Liberty requested that the court deny the motion for summary judgment pursuant to M.R. Civ. P. 56(f). Bahre filed a motion to strike the Lilley and Liberty affidavits. The court denied Liberty’s mo[560]*560tion to amend its answer; granted Bahre’s motion to strike the Liberty and Lilley affidavits; and granted Bahre’s motion for a summary judgment. This appeal followed.

II.

[¶ 7] Liberty asserts that the court exceeded the bounds of its discretion by denying its motion to amend pursuant to M.R. Civ. P. 13(f) and 15(a).2 Bahre maintains, inter alia, that the court properly denied the motion to amend because Liberty did not comply with M.R. Civ. P. 7(b)(3). We review the denial of a motion to amend for abuse of discretion. See Thibodeau v. Cole, 1999 ME 150, ¶ 5, 740 A.2d 40, 42. A party seeking to overturn the denial of a motion to amend must demonstrate (1) that the court clearly and manifestly abused its discretion and (2) that the amendment is necessary to prevent injustice. See id.

[¶ 8] Because we review for abuse of discretion, we must examine the record before the court at the time the motion was filed. The Superior Court had before it a complaint that alleged contract liability and an answer that admitted entering into the contract and did not deny liability on that contract. In its answer, Liberty only asserted the defenses of laches and failure to state a claim upon which relief can be granted; moreover, Liberty did not assert any counterclaims.

[¶ 9] The court next received Bahre’s motion for summary judgment which in-eluded a statement of material facts and accompanying affidavits attesting to Liberty’s liability under the contract. Liberty then submitted a motion to amend its answer to include a counterclaim. The motion, and the incorporated memorandum of law supporting the motion, did not provide a legal or factual basis for the counterclaim. The motion merely asserted that Liberty should be allowed to include a permissive counterclaim because “leave to amend should be freely given” and the case was only six weeks old. Although Liberty cited to M.R. Civ. P. 13(f) which allows omitted counterclaims to be added upon a showing of “oversight, inadvertence, or excusable neglect, or when justice so requires,” Liberty never argued that any of those enumerated circumstances existed.

[¶ 10] Next, Liberty filed — in response to Bahre’s motion for summary judgment — two affidavits asserting that the contract was unenforceable due to the affirmative defense of fraud. Fraud must be pleaded with particularity and is waived if not pleaded in the answer. See M.R. Civ. P. 8(c) & 9(b). The court, however, first became aware that Liberty wanted to plead the “affirmative defense of fraud” and raise the counterclaim of slander when Liberty filed affidavits in opposition to Bahre’s motion for a summary judgment. Liberty’s affidavits referred to the affirmative defense of fraud while Liberty’s motion to amend only asked to assert a per[561]*561missive counterclaim — not an affirmative defense.

[¶ 11] Rule 7(b)(3) requires a moving party to include a draft order granting the motion and a specific statement of the relief to be granted with the motion to amend. See M.R. Civ. P. 7(b)(3). Contrary to Liberty’s contention at oral argument, Liberty did not submit a draft order or a specific statement informing the court of its desire to plead fraud with its motion to amend. To comply with Rule 7(b)(3), Liberty should have (1) described its fraud defense in its motion to amend; and (2) included a draft order granting it permission to include the fraud defense. Although not required by Rule 7(b)(3), Liberty would have been wise to include a draft pleading outlining the fraud defense. As we stated in Thibodeau, when the court is presented with a motion to amend with no facts indicating what the amendment would entail, the court has no choice but to deny the motion to amend. See Thibodeau, ¶ 5, 740 A.2d at 42.

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Bluebook (online)
2000 ME 75, 750 A.2d 558, 2000 Me. LEXIS 78, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bahre-v-liberty-group-inc-me-2000.