Lanigan v. Lasalle National Bank

108 F.R.D. 660, 1985 U.S. Dist. LEXIS 13901
District Court, N.D. Illinois·Decided November 14, 1985·No. No. 84 C 9676·Published·Cited by 9 cases

Opinion

MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

Plaintiff Frances Lanigan (“Lanigan”) filed this diversity action against LaSalle National Bank and eight individual defendants alleging a breach of fiduciary duty relating to a trust in which Lanigan holds a beneficial interest. Lanigan has moved for leave to amend her complaint to add a second count, an additional individual defendant and a claim for attorneys’ fees. For the following reasons, the motion is granted.

I. Factual Background

This case arose from a trust agreement executed on July 13, 1962. The agreement resulted from previous transactions involving the trust property, a tract of real estate known as the “Fair Oaks property.” Defendant Kalman Lieberman (“Lieberman”) purchased the Fair Oaks property in 1958 in behalf of himself and several other persons (“the Lieberman group”). Another group of people, the “Deany group,” sought to redeem the Fair Oaks property soon after the Lieberman group purchase. A settlement agreement was entered between the two groups by which a tax deed issued to Lieberman, with each group holding an individual beneficial interest in a percentage of the property. After the Lieberman group split up into two separate groups, each holding an individual interest in part of the property, the resulting three groups executed a twenty-year trust agreement whereby the Fair Oaks property was conveyed to defendant LaSalle National Bank as trustee. Each of the three groups maintained a beneficial interest in the trust property. Two members of each group signed the trust agreement as representatives of the individual interest holders, including Lanigan’s late husband, who was her predecessor in interest to her beneficial interest.

The trust was to expire by its own terms on July 13,1982, twenty years following its inception. This case involves the attempted extension of the trust agreement for an additional twenty years by purported representatives of each of these groups. Lanigan, an individual beneficial interest holder in the Deany group, claims that defendants breached the fiduciary duty owed to her as [662]*662a trust beneficiary by extending the trust agreement without her consent. She alleges that the parties to the original settlement agreement between the Lieberman group and the Deany group agreed that the trust property was to be sold as soon as a reasonable offer was received.

Plaintiff Lanigan now seeks to amend her complaint for three purposes.

First, she wants to add a second count, asking this Court to declare the extension of the trust agreement void and to put the trust property into receivership in order to have it sold and the proceeds distributed in proportion to the various ownership interests. She also seeks an accounting and requests that each individual defendant be held personally liable for the alleged breach.

Second, she moves to add Jerome T. Murphy, counsel for three of the individual defendants, as a defendant in this matter on both the original count and the proposed second count. She alleges that Jerome Murphy was involved in the extension of the trust agreement in that he had acted as a representative for the “Deany group” and that he “encouraged” defendant Robert Hunter to sign the extension even though the latter had already resigned his position as a Deany group representative.

Finally, plaintiff wishes to add a claim for attorneys’ fees to the breach of fiduciary duty claim (Count I).

II. Motion to Add Count II

Under Rule 15(a) of the Federal Rules of Civil Procedure, once a defendant has answered, the plaintiff may amend the complaint “only by leave of the court or by written consent of the adverse party.” Fed.R.Civ.P. 15(a). Rule 15(a) directs the courts to grant leave to amend freely “when justice so requires,” and the courts have consistently applied this liberal standard. Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962); Stern v. United States Gypsum, Inc., 547 F.2d 1329, 1334 (7th Cir.), cert, denied, 434 U.S. 975, 98 S.Ct. 533, 54 L.Ed.2d 467 (1977). This does not mean, however, that the interests of defendants are not to be considered. In situations where there is “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party, etc.,” motions to amend will not be allowed. Foman, 371 U.S. at 182, 83 S.Ct. at 230. The determination as to whether leave to amend should be granted is committed to the discretion of the trial court. Id.

It should be noted initially that virtually every amendment to a complaint results in some degree of prejudice to the defendant in that the potential for additional discovery arises as well as the possibility of a delay of the trial date. Thus, we have held that a motion for leave to amend will be denied only where such amendment would cause “undue prejudice” to the defendant. Hess v. Gray, 85 F.R.D. 15, 20 (N.D.I11. 1979). Undue prejudice has been found, for example, in cases where the amendment “brings entirely new and separate claims, adds new parties, or at least entails more than an alternative claim or a change in the allegations of the complaint” and where the amendment would require expensive and time-consuming additional discovery. A. Chemey Disposal Co. v. Chicago & Suburban Refuse Disposal Corp., 68 F.R.D. 383, 385 (N.D.I11.1975).

Given these standards, we must now examine the history of this litigation in order to determine whether allowance of the plaintiff’s motion will impose undue prejudice on defendants. The plaintiff originally filed this case on November 7, 1984, after which defendants answered and filed a counterclaim. Since then, there have been numerous discovery disputes, primarily involving defendants’ refusal to produce certain documents. As a result of these disputes, on June 7, 1985, plaintiff found it necessary to request an extension of the original date for closing discovery and filing of a pretrial order from June 1985 until September 1985. The request was granted, and the pretrial date has [663]*663since been pushed back two additional times.

Through the course of discovery, plaintiff maintains that she discovered facts which lead her to believe that the trust extension was invalid in that it did not occur before the date the trust expired and was hot signed by a legitimate representative of the Deany group, of which plaintiff was a beneficiary. It is not uncommon that facts disclosed in discovery lead to new claims, and courts may properly allow the plaintiff to amend the complaint in light of this new information. See, e.g., Farr v. United Airlines, Inc., 84 F.R.D. 618, 620 (N.D.I11.1979); 6 C. Wright & A. Miller, Federal Practice and Procedure § 1488 (1971).

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Lanigan v. Lasalle National Bank, 108 F.R.D. 660, 1985 U.S. Dist. LEXIS 13901 (N.D. Ill. 1985).

108 F.R.D. 660 (Lanigan v. Lasalle National Bank) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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