Pichowicz v. Atlantic Richfield CV-92-388-M 02/08/96 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Nicholas and Joan Pichowicz, Plaintiffs, and NH VT Health Service, Intervenor-Plaintiff,
v. Civil No. 92-388-M
Atlantic Richfield, Defendant/Counter-Claimant, and Stephen Bronstein; James Fokas; and Herbert Miller, Defendants/ Cross-Claimants/Counter-Defendants.
O R D E R
Plaintiffs, Nicholas and Joan Pichowicz, have sued
defendants. Pearl Hoyt, et al., seeking compensation for damage
to their property caused by defendants' alleged release of
contaminants. In an order dated January 4, 1995, the magistrate
judge denied defendants' motion for leave to amend their answer
to assert the affirmative defense of contractual release from
liability.
The proposed affirmative defense is based on a "General
Release" (the "Release") that plaintiffs allegedly gave
defendants in 1988 in settlement of a prior lawsuit. Defendants
obtained a copy of the Release from plaintiffs' counsel through
informal discovery in October 1995. Prior to that date,
defendants claim they did not specifically recall the existence
of the Release or its terms and could not locate their own copy of the Release. Nor, it appears, were defendants' counsel aware
of the Release before late 1995, not having represented
defendants in the earlier lawsuit or settlement.
Pursuant to Fed. R. Civ. P. 72, defendants now appeal the
magistrate judge's order and reguest this court to grant their
motion for leave to amend. For the reasons stated below, the
defendants' motion for leave to amend is granted.
I. STANDARD OF REVIEW
Federal Rule of Civil Procedure 72 governs objections to
non-dispositive orders issued by a magistrate judge: "The
district judge to whom the case is assigned shall consider such
objections and shall modify or set aside any portion of the
magistrate judge's order found to be clearly erroneous or
contrary to law." Fed. R. Civ. P. 72(a) (emphasis added).1 A
magistrate judge's factual finding is considered clearly
erroneous when it is contrary to the "clear weight of the
evidence or when the court has a definite and firm conviction
1 Defendants argue that this court should employ the less deferential de novo standard that Fed. R. Civ. P. 72(b) prescribes for review of a magistrate judge's report and recommendation on a dispositive pretrial matter. Because, in this case, the magistrate judge's order must be reversed even under the more deferential standard of review applicable to non- dispositive matters, the court need not decide whether defendants' motion to amend to assert a potentially dispositive affirmative defense constitutes a dispositive pretrial matter under Fed. R. Civ. P. 72(b).
2 that a mistake has been committed." Havden v. Gravstone, No.
C93-112-JD, slip op. at 2 (D.N.H. Aug. 30, 1995) (DiClerico,
C.J.) (quotation omitted).
II. DISCUSSION
Federal Rule of Civil Procedure 15 governs leave to amend
pleadings: "[A] party may amend the party's pleading only by
leave of court or by written consent of the adverse party; and
leave shall be freely given when justice so requires." Fed. R.
Civ. P . 15(a).
In the absence of any apparent or declared reason — such as 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 by virtue of the allowance of the amendment, futility of the amendment, etc. — the leave sought should, as the rules require, be "freely given."
Foman v. Davis, 371 U.S. 178, 182 (19 62); see also Executive
Leasing Corp. v. Banco Popular, 48 F.3d 66, 71 (1st Cir. 1995).
Plaintiffs do not claim, nor did the magistrate judge find,
bad faith, dilatory motive, or repeated failure to cure
deficiencies on the part of defendants. In addition, the
magistrate judge correctly concluded that the proposed amendment
is not futile. The Release is facially broad, and, absent clear
and convincing evidence that it does not express the parties'
3 intentions — evidence lacking here — it would normally be given
full effect under New Hampshire law. Maltais v. National Grange
Mut. Ins. C o ., 118 N.H. 318, 320 (1978). Rather, the magistrate
judge based his denial of defendants' motion to amend on a
finding that defendants' undue delay in moving to amend their
answer would prejudice plaintiffs if the motion for leave to
amend were granted.
Delay, standing alone, is usually an insufficient basis on
which to deny leave to amend. Greenberg v. Mvnczvwor, 667 F.
Supp. 901, 905 (D.N.H. 1987) (citing Carter v. Supermarkets Gen'1
Corp., 684 F.2d 187, 192 (1st Cir. 1982)). However, "unseemly
delay, in combination with other factors, may warrant denial of a
suggested amendment." Quaker State Oil Ref, v. Garritv Oil Co.,
884 F.2d 1510, 1517 (1st Cir. 1989) (emphasis added).
Specifically, the "district court must consider prejudice to the
opposing party." Greenberg, 667 F. Supp. at 905. Prejudice is
present when the amendment would reguire the non-movant to expend
significant additional resources to conduct discovery and prepare
for trial. Block v. First Blood Assoc., 988 F.2d 344, 350 (2d
Cir. 1993), or deprive the non-movant of the opportunity to
present facts or evidence. Bryn Mawr Hosp. v. Coatesville Elec.
Supply C o ., 776 F. Supp. 181, 186 (E.D. Pa. 1991) (citing Foman,
371 U.S. at 182.) .
4 The magistrate judge based his conclusion that defendants'
tardy amendment would prejudice plaintiffs on two findings: (1)
that plaintiffs had already expended considerable resources in
preparing this case; and (2) that "discovery closes in less than
sixty days." (Order at 6.) The first finding, while certainly
unassailable, does not speak to the type of prejudice
contemplated by Rule 15, and the second finding is incorrect due
to an oversight.
The parties have undoubtedly spent much time and money
litigating this case. But the real guestion is whether
permitting defendants to add an affirmative defense at this point
will prejudice plaintiffs by reguiring them to expend significant
additional resources. Implicit in the magistrate judge's ruling
Free access — add to your briefcase to read the full text and ask questions with AI
Pichowicz v. Atlantic Richfield CV-92-388-M 02/08/96 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Nicholas and Joan Pichowicz, Plaintiffs, and NH VT Health Service, Intervenor-Plaintiff,
v. Civil No. 92-388-M
Atlantic Richfield, Defendant/Counter-Claimant, and Stephen Bronstein; James Fokas; and Herbert Miller, Defendants/ Cross-Claimants/Counter-Defendants.
O R D E R
Plaintiffs, Nicholas and Joan Pichowicz, have sued
defendants. Pearl Hoyt, et al., seeking compensation for damage
to their property caused by defendants' alleged release of
contaminants. In an order dated January 4, 1995, the magistrate
judge denied defendants' motion for leave to amend their answer
to assert the affirmative defense of contractual release from
liability.
The proposed affirmative defense is based on a "General
Release" (the "Release") that plaintiffs allegedly gave
defendants in 1988 in settlement of a prior lawsuit. Defendants
obtained a copy of the Release from plaintiffs' counsel through
informal discovery in October 1995. Prior to that date,
defendants claim they did not specifically recall the existence
of the Release or its terms and could not locate their own copy of the Release. Nor, it appears, were defendants' counsel aware
of the Release before late 1995, not having represented
defendants in the earlier lawsuit or settlement.
Pursuant to Fed. R. Civ. P. 72, defendants now appeal the
magistrate judge's order and reguest this court to grant their
motion for leave to amend. For the reasons stated below, the
defendants' motion for leave to amend is granted.
I. STANDARD OF REVIEW
Federal Rule of Civil Procedure 72 governs objections to
non-dispositive orders issued by a magistrate judge: "The
district judge to whom the case is assigned shall consider such
objections and shall modify or set aside any portion of the
magistrate judge's order found to be clearly erroneous or
contrary to law." Fed. R. Civ. P. 72(a) (emphasis added).1 A
magistrate judge's factual finding is considered clearly
erroneous when it is contrary to the "clear weight of the
evidence or when the court has a definite and firm conviction
1 Defendants argue that this court should employ the less deferential de novo standard that Fed. R. Civ. P. 72(b) prescribes for review of a magistrate judge's report and recommendation on a dispositive pretrial matter. Because, in this case, the magistrate judge's order must be reversed even under the more deferential standard of review applicable to non- dispositive matters, the court need not decide whether defendants' motion to amend to assert a potentially dispositive affirmative defense constitutes a dispositive pretrial matter under Fed. R. Civ. P. 72(b).
2 that a mistake has been committed." Havden v. Gravstone, No.
C93-112-JD, slip op. at 2 (D.N.H. Aug. 30, 1995) (DiClerico,
C.J.) (quotation omitted).
II. DISCUSSION
Federal Rule of Civil Procedure 15 governs leave to amend
pleadings: "[A] party may amend the party's pleading only by
leave of court or by written consent of the adverse party; and
leave shall be freely given when justice so requires." Fed. R.
Civ. P . 15(a).
In the absence of any apparent or declared reason — such as 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 by virtue of the allowance of the amendment, futility of the amendment, etc. — the leave sought should, as the rules require, be "freely given."
Foman v. Davis, 371 U.S. 178, 182 (19 62); see also Executive
Leasing Corp. v. Banco Popular, 48 F.3d 66, 71 (1st Cir. 1995).
Plaintiffs do not claim, nor did the magistrate judge find,
bad faith, dilatory motive, or repeated failure to cure
deficiencies on the part of defendants. In addition, the
magistrate judge correctly concluded that the proposed amendment
is not futile. The Release is facially broad, and, absent clear
and convincing evidence that it does not express the parties'
3 intentions — evidence lacking here — it would normally be given
full effect under New Hampshire law. Maltais v. National Grange
Mut. Ins. C o ., 118 N.H. 318, 320 (1978). Rather, the magistrate
judge based his denial of defendants' motion to amend on a
finding that defendants' undue delay in moving to amend their
answer would prejudice plaintiffs if the motion for leave to
amend were granted.
Delay, standing alone, is usually an insufficient basis on
which to deny leave to amend. Greenberg v. Mvnczvwor, 667 F.
Supp. 901, 905 (D.N.H. 1987) (citing Carter v. Supermarkets Gen'1
Corp., 684 F.2d 187, 192 (1st Cir. 1982)). However, "unseemly
delay, in combination with other factors, may warrant denial of a
suggested amendment." Quaker State Oil Ref, v. Garritv Oil Co.,
884 F.2d 1510, 1517 (1st Cir. 1989) (emphasis added).
Specifically, the "district court must consider prejudice to the
opposing party." Greenberg, 667 F. Supp. at 905. Prejudice is
present when the amendment would reguire the non-movant to expend
significant additional resources to conduct discovery and prepare
for trial. Block v. First Blood Assoc., 988 F.2d 344, 350 (2d
Cir. 1993), or deprive the non-movant of the opportunity to
present facts or evidence. Bryn Mawr Hosp. v. Coatesville Elec.
Supply C o ., 776 F. Supp. 181, 186 (E.D. Pa. 1991) (citing Foman,
371 U.S. at 182.) .
4 The magistrate judge based his conclusion that defendants'
tardy amendment would prejudice plaintiffs on two findings: (1)
that plaintiffs had already expended considerable resources in
preparing this case; and (2) that "discovery closes in less than
sixty days." (Order at 6.) The first finding, while certainly
unassailable, does not speak to the type of prejudice
contemplated by Rule 15, and the second finding is incorrect due
to an oversight.
The parties have undoubtedly spent much time and money
litigating this case. But the real guestion is whether
permitting defendants to add an affirmative defense at this point
will prejudice plaintiffs by reguiring them to expend significant
additional resources. Implicit in the magistrate judge's ruling
is a determination that had the Release been asserted earlier
plaintiffs may not have gone forward to this point and now,
having made the trek, should not have their efforts rendered
futile by the late interposition of a valid defense. That
approach, however, ignores the fact that plaintiffs signed and
delivered the Release in 1988, knew of its existence throughout
this litigation, and possessed a copy of the Release as well.
Indeed, prior to October 1995, when defendants specifically
reguested and received a copy of the Release from plaintiffs,
plaintiffs' counsel had independently researched the
applicability and effect of the Release on the present
5 litigation. Therefore, plaintiffs cannot claim to be either
surprised by the existence of the Release or by defendants'
belated reliance on it. The only likely surprise to plaintiffs
is that defendants did not invoke the Release long ago. In any
event, surprised or not, invocation of the Release should not
reguire plaintiffs to expend significant additional resources.
Any prejudice that plaintiffs might suffer is fairly well
mitigated by the fact that discovery need not be completed until
September 1, 1996. Originally, the discovery deadline was set
for March 1, 1996, the closing date the magistrate judge
apparently relied on in denying defendants leave to amend.
However, the record discloses that on October 11, 1995, the court
granted a joint motion to extend the discovery deadline by six
months (document no. 70). Thus, plaintiffs have nearly seven
months from the date of this order to conduct discovery relating
to defendants' new affirmative defense, and they have nearly nine
months prior to trial to conduct any necessary additional
research on the effect of the Release. Defendants have also
indicated their willingness to consent to reasonable extensions
reguested by plaintiffs, though none should be necessary.
Finally, allowing defendants to amend their answer to
include the affirmative defense of release is consistent with the
purpose and spirit of Fed. R. Civ. P. 15 — that, whenever
6 possible, cases should be determined on their merits. Foman, 371
U.S. at 181-82.
III. CONCLUSION
Defendants' motion for leave to amend (document no. 73) is
granted.
SO ORDERED.
Steven J. McAuliffe United States District Judge
February 8, 1996
cc: Linda J. Argenti, Esg. Joseph G. Abromovitz, Esg. M. Ellen LaBrecgue, Esg. Charles P. Bauer, Esg. Peter S. Wright, Jr., Esg. Thomas H. Richard, Esg.