Beeck v Aquaslide 'N' Dive Corp.

Procedural History: on appeal from the trial court's exercise of discretion on procedural matters in a diversity personal injury action Facts: Beeck gets injured on a waterslide, and sues the manufacturer, Aquaslide on product liability claims. Aquaslide's insurance company does an investigation and say that they were manufactured by Aquaslide. After the lawsuit is filed, Aquaslide answers, and in it they admit that they are the manufacturer of the slide. On the basis of the insurance company telling Aquaslide that it was theirs, they say so in discovery. The President of the company later goes to look at the slide and realizes that its not their slide, but the statute of limitations has run out. Aquaslide wants to amend their answer to change their response as to whether it was really their slide, but they're out of the 20-day window, so they have to throw themselves on the mercy of the court. Issue: Can Aquaslide still amend their answer to the complaint after the statute of limitations has run out? Holding: Court issued new trial to decide if slide was manufactured by Aquaslide. Found that it was not. Reasoning: In Foman v Davis, court says - Leave to amend will be freely given in the absence of any reason that leave shouldn’t be granted; courts mustn't allow delay, bad faith, or prejudice. Aquaslide did not act in bad faith because their answer and interrogatory responses were based on the insurance company, and it should have been safe to assume their investigation would be accurate. The court says that "blame should be shared equally" - the plaintiffs could have made this discovery in the course of their own investigation… but then again, if the insurance company couldn’t tell, how could the plaintiffs? The plaintiffs didn’t really do anything wrong, but theirs a good reason to grant leave to amend. The plaintiffs says that there is prejudice though, because the statute of limitations has run out - the plainitffs cannot now sue the true manufacturer for personal injury. But the court says the plaintiff might have causes of action that can get around the statute of limitations, so the prejudice isnt as great as the plaintiff says. RULE: Rule 15: Amended and Supplemental Pleadings (a) Amendments. A party may amend the party's pleading 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, the party may so amend it at any time within 20 days after it is served. Otherwise 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. A party shall plead in response to an amended pleading within the time remaining for response to the original pleading or within 10 days after service of the amended pleading, whichever period may be the longer, unless the court otherwise orders. Notes Beeck later sued Aquaslide on fraud - they reasonably relied on a false statement of fact causing Beeck damages. (app 307) Found that Aquaslide knew or should have known that other companies were copying Aquaslide's designs. They’ve had other lawsuits based on copied slides. President didn’t look at the slide until right before trial. If we had known this before this raises a Rule 11 problem. What is

reasonable under the circumstances. It would have been reasonable, under the circumstances, for the President to check the slide better before answering the complaint. He failed to make a reasonable inquiry before filing the answer, which kept plaintiff from suing the right party (and then barring them from doing so because of the statute of limitations). Court may have denied his amendment, if they had this information.