No. 91-006
IN THE SUPREME COURT OF THE STATE OF MONTANA
HOBBLE-DIAMOND CATTLE COMPANY, a Montana Corporation,
plaintiff and Appellant,
-vs-
TRIANGLE IRRIGATION COMPANY, a Montana corporation,
R U G 1 5 1991
APPEAL FROM: District Court of the Sixth Judicial ~istrict,
In and for the County of Sweet Grass,
The Honorable Byron L. Robb, Judge presiding,
COUNSEL OF RECORD:
For Appellant:
Charles A. Murray, Jr., and Christopher P. Thimsen,
Attorneys at Law; Billings, Montana.
Far Respondent:
James E. Aiken; J a r d i n e , Stephenson, BLewett &
Weaver, Great Falls, Montana.
Submitted on briefs: July 11, 1991
Decided: ~ u g u s t15, 1991
Filed:
C
Clerk
Justice R. C. McDonough delivered the Opinion of the Court.
The plaintiff Hobble-Diamond Cattle Company (Hobble-Diamond)
appeals the order of the Sixth ~udicialDistrict Court, Sweetgrass
County, denying Hobble-Diamond leave to amend its complaint in its
lawsuit against the defendant Triangle Irrigation Company
(Triangle). The District Court denied the motion on the grounds
that it was untimely and it would impeach the plaintiff's
principal's deposition testimony. The sole issue on appeal is
whether the ~istrict
Court abused its discretion in denying Hobble-
Diamond's motion to amend its complaint and the pretrial order,
and, if so, whether such error was harmless. We reverse and
remand.
On January 2, 1986, Hobble-Diamond filed a complaint against
Triangle seeking damages allegedly sustained as the result of
deficiencies in the design, installation, and repair of a pivot
sprinkler system at the plaintiff's ranch property. Trial was held
on July 19, 1989, and the court entered its Findings of Fact and
Conclusions of Law against Hobble-Diamond on all issues on November
16, 1990.
Hobble-Diamond's complaint alleges damages resulting from the
malfunction of two main components in the irrigation system
installed by Triangle, namely irrigation pivot nos. 3 and 6. The
complaint does not allege any damages arising from the malfunction
of pivot no. 5. In his deposition taken February 13, 1987, Hobble-
Diamond's principal, "Montyt1Kimble gave the following testimony
regarding pivot no. 5:
Q. Mr. Kimble, directing your attention to pivot
No. 5. Are you claiming to have had some problems with
surging and with the pump on Pivot No. 5?
A. That was a problem that we had for some time,
yes. It was--I'm going to say it probably went on for
almost the full season of '84.
Q. Describe for me those problems.
A. Well, I'm not an engineer, so -- hydraulic
engineer, so I don't really know the cause of it.
Q. I just want to know what you perceive the
problem to have been.
A. The water would surge, and the pump -- The
pivots would stop. We had a surge, and I understand the
surge was because the pump wasn't adequate.
Q. And according to the contract, Pump No. 5 was
rated a thousand gallons per minutes; is that correct?
A. I believe so.
Q. Has that pump ever been changed?
A. Pump has not been changed, but the nozzles,
unbenounced [sic] to me, with one of Triangle's or
whatever the case may be, employees. His name is lain -
- I don't know his last name.
. . .
Q. Leninger [sic].
A. He stated to me that in order to stop the pump
from surging, that they lowered the capacity of the
nozzles.
Q. And did that take care of the problem?
A. Yeah, I haven't had any problem since that has
been done, and I really don't know when it was done. It
was done unbenounced [sic] to me.
Q. But it was done by Triangle personnel, to the
best of your recollection, --
A. Yes.
Q. or their predecessor.
A. Yes.
Q. Are you claiming to sustain any crop loss of any
sort with respect to the surge in the season of 1985?
A. No, my claim is, we had to spend a lot of time
there.
Q. My inquiry must be directed to what, if any,
amount of money damages are you claiming as a result of
--
A. I don't think I am
Q. You're not claiming anything ...
Prior to trial, Hobble-Diamond filed two motions to amend its
pleadings. On January 11, 1989, some twenty-three months after
Kimble was deposed and one week prior to the original trial date,
Hobble-Diamond moved to amend its complaint to include crop loss
under pivot no. 5. Hobble-Diamond alleges that at this time it
became aware of damages resulting from problems with this system.
That month Hobble-Diamond received two reports---the first prepared
by Triangle's employee, Mr. Lininger, the second prepared by an
independent engineering consultant---discussing the inadequacies
associated with pivot no. 5 of the system. On January 19, 1989 the
District Court denied this first motion and continued the trial
date to July 19, 1989. On March 3, 1989, Hobble-Diamond again
moved to amend its complaint to allege crop loss due to pivot no.
5. Along with this motion, Hobble-Diamond filed the affidavit of
Kimble, alleging that he had believed low crop yields in the
vicinity of pivot no. 5 had been due to factors other than
inadequate watering but now believed--based on the reports--that
the reduced yields were directly a result of the inadequate system.
The reports were filed as exhibits to the affidavit. The District
Court denied the motion on the grounds that it was (1) untimely and
(2) it would impeach Kimble's deposition testimony. Hobble-
Diamond only appeals the order of the District Court denying its
second motion to amend.
Rule 15(a), M.R.Civ.P. controls amendments to pleadings. It
provides in pertinent part:
Rule l S ( a ) . Amendments. A party may amend his pleadings
once as a matter of course at any time before a
responsive pleading is served or, if the pleading is one
to which no responsive pleading is permitted and the
action has not been placed upon the trial calendar, he
may so amend it at any time within 20 days after it is
served. Otherwise a partv mav amend his ~leadincronly
bv leave of court or bv written consent of the adverse
party; and leave shall be freely qiven when iustice so
requires. ...
(Emphasis added.)
We have interpreted the Rule liberally, allowing amendment of
pleadings as the general rule and denying leave to amend as the
exception. Priest v. Taylor (1987), 227 Mont. 370, 377-78, 740
P.2d 648, 653.
Although leave to amend is properly denied when the amendment
is futile or legally insufficient to support the requested relief,
it is an abuse of discretion to deny leave to amend where it cannot
be said that the pleader can develop no set of facts under its
proposed amendment that would entitle the pleader to the relief
sought. Letizia v. Prudential Bache Securities, Inc. (9th Cir.
1986), 802 F.2d 1185, 1189 (construing the nearly identical Federal
Rule). Here, Hobble-Diamond supported its motion to amend with
evidence that it had new information available to it regarding
possible crop loss due to an inadequate pivot no. 5. To what
extent the proposed amendment would impeach Kimblels prior
deposition testimony is relevant to his credibility as a witness
rather than the merits of the amendment. Generally, the merits of
a proposed amended claim are not to be considered, unless the claim
is frivolous, meritless, or futile. Davis v. Coler (N.D. Ill.
1984), 601 F. Supp. 444, 447. Hobble-Diamond was precluded from
introducing evidence--including the engineering reports--at trial
regarding pivot no. 5. We cannot determine, based on the record
developed at trial, whether the amendment was frivolous, meritless,
or futile.
Furthermore, 'I[l]eave of court to amend a complaint in order
5
to correct a mistake should be freely given when the amendment will
not mislead defendants to their prejudice. I' Haugen Trust v. Warner
(1983), 204 Mont. 508, 512, 665 P.2d 1132, 1135. In Hauqen Trust,
the defendants inadvertently failed to allege damages for a
particular year in their third party complaint. The District Court
denied the defendants leave to amend, and this Court reversed
holding that such denial was an abuse of discretion. Hausen Trust,
665 P.2d at 1135. While in this case the mistake was not
inadvertent, it appears to have been based on a lack of information
that later became available to Hobble-Diamond regarding the
specific inadequacies of pivot no. 5. The District Court denied
the first motion on January 19, 1989, and in the same order
continued the trial date until July 19. Hobble-Diamond filed its
second motion on March 3, some four months prior to the re-
scheduled trial date. If the amendment were granted, defendants
would have had sufficient time to conduct additional d iscovery , and
would not have been prejudiced by the amendment.
"Refusal to permit an amendment to a complaint which should
be made in the furtherance of justice is an abuse of discretion."
Hauqen Trust, 665 P.2d at 1135. We hold that the District Court
abused its discretion in denying Hobble-Diamond leave to amend its
complaint. Furthermore, we see no merit in Triangle's contention
that the error was harmless. Hobble-Diamond was precluded from
asserting a cause of action based on inadequacies in pivot no. 5,
and suffered obvious prejudice due to the District Court's order.
The order of the District Court is REVERSED end the cause
REMANDED f o r further proceedings c o n s i s t e n t w i t h this opinion.
We Concur: ,/?
August 15, 1991
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:
Charles A. Murray, Jr., Esq.
Christopher P. Thimsen, Esq.
2812 First Ave. No., Ste. 210
Billings, MT 59101
James E. Aiken, Esq.
Jardine, Stephenson, Blewett & Weaver
P.O. Box 2269
Great Falls, MT 59403
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA