Carter v. Bourgoin Construction, Inc.

2015 UT App 198

THE UTAH COURT OF APPEALS

GAYLE CARTER AND LANETT CARTER,
Plaintiffs and Appellants,
v.
BOURGOIN CONSTRUCTION, INC. AND LANDMARK TESTING &
ENGINEERING, INC.,
Defendants and Appellee.

Memorandum Decision
No. 20140405-CA
Filed August 6, 2015

Fifth District Court, St. George Department
The Honorable Gary D. Stott
No. 090501861

Darwin C. Fisher, Attorney for Appellants
Jason C. Hunter, Attorney for Appellee

JUDGE STEPHEN L. ROTH authored this Memorandum Decision, in
which JUDGES MICHELE M. CHRISTIANSEN and JOHN A. PEARCE
concurred.

ROTH, Judge:

¶1 Gayle and Lanett Carter (the Carters) appeal the district
court’s denial of their motion to amend their complaint. We
affirm.

¶2 In 2003, A. Kent Cottam contracted with Landmark
Testing & Engineering, Inc. (Landmark) to perform a
geotechnical investigation on a parcel of land he was considering
purchasing in Washington, Utah. Landmark tested the soil for
both expansive and collapsible soils. Based on the results of the
report, Cottam went forward with the purchase of the land
which was then subdivided into residential lots. One of these
lots was sold to Bourgoin Construction, Inc., which in turn
Carter v. Landmark

contracted with the Carters to sell them the lot and construct a
home. In 2009, shifting and unstable soils resulted in significant
damage to the Carters’ home.

¶3 Shortly after, in June 2009, the Carters filed a complaint
against Bourgoin Construction, Inc.; Cottam and his wife (the
Cottams); Landmark; and other parties who had been involved
in the development of the subdivision (the Complaint). In
February 2011, the Carters filed an amended complaint adding a
new defendant to their suit. A couple of months later, the
Carters filed a second amended complaint adding claims against
Landmark. Cottam passed away at the end of 2011.

¶4 In June 2012, three years after the original Complaint was
filed, the Carters’ claims against Landmark were dismissed on
summary judgment, the court having determined that the
Carters were not in privity of contract with Landmark. The
Cottams, however, may have been in privity with Landmark
with regard to the subject matter of the Carters’ claims because
of the Cottams’ 2003 agreement with Landmark for geotechnical
investigation on the land underlying the Carters’ house. In fact,
in a separate case, the Cottams had sued Landmark for
fraudulent misrepresentation, fraudulent concealment, and
negligent misrepresentation after another property in the
Carters’ subdivision experienced similar soil-related damage.
The Cottams, however, had not asserted any claims against
Landmark in the Carters’ case. In any event, in May 2013, as part
of a settlement in the Cottams’ bankruptcy case, the Carters
acquired by assignment all claims the Cottams may have had
against Landmark related to the Carters’ property. Two months
later, the Carters filed a motion with the district court requesting
leave to amend the Complaint a third time in order to assert
those newly acquired claims. The district court denied the
motion, and the Carters appeal that decision.

¶5 We review a district court’s denial of a motion to amend
for abuse of discretion. Pride Stables v. Homestead Golf Club, Inc.,
2003 UT App 411, ¶ 11, 82 P.3d 198.

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Carter v. Landmark

¶6 ‚A party may amend his pleading once as a matter of
course at any time before a responsive pleading is served . . . .‛
Utah R. Civ. P. 15(a). Additional amendments may be filed ‚only
by leave of court or by written consent of the adverse party,‛ but
‚leave shall be freely given when justice so requires.‛ Id. ‚This
means that trial courts should ‘liberally allow amendments,’ but
certain factors, such as untimeliness, futility, prejudice to the
other side, and bad faith, ‘may weigh against the trial court’s
allowing amendment.’‛ Warner v. Warner, 2014 UT App 16, ¶ 53,
319 P.3d 711 (quoting Daniels v. Gamma W. Brachytherapy, LLC,
2009 UT 66, ¶ 58, 221 P.3d 256).

¶7 Here, the district court denied the motion on the basis that
too much time had passed to permit a third amendment to the
Complaint. The district court judge stated,

I am finding that plaintiff’s motion for leave
to file the third Amended Complaint is denied. The
circumstances as they exist in this case just prohibit
a granting of that motion. The original Complaint
was filed in June of 2009, . . . four plus years ago.
The second Amended Complaint was filed in April
of 2011, two plus years ago. We now have a lot of
factors in this case that simply do not weigh in
[favor of] this Court’s granting the motion . . . .

As part of its oral ruling, the district court quoted Kelly v. Hard
Money Funding, Inc., 2004 UT App 44, 87 P.3d 734. Kelly states
that motions to amend ‚filed in the advanced procedural stages
of the litigation process‛ are ‚typically deemed untimely.‛ Id.
¶ 29. Kelly further states that motions ‚filed several years into the
litigation‛ are also generally untimely. Id. ¶ 30. This is so
because

[i]n such cases, the ongoing passage of time makes
it increasingly difficult for the nonmoving party to
effectively respond to the new allegations or
claims. Parties in such circumstances are often
hindered by witnesses who have since moved or

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Carter v. Landmark

died, by their shaky memories and recollections, or
by documents which have since been lost or
destroyed.

Id. While the district court did not go through each of the Kelly
concerns one by one, its ruling determined that a number were
present in the case at hand and that too much time had passed to
justify a grant of the motion to amend. In addition, the district
court pointed to the fact that the attorney currently representing
the Cottams, against whose assigned claims Landmark would
have to defend, ‚doesn’t even know where his clients are
anymore‛ and ‚can’t even get them to cooperate.‛

¶8 We find no abuse of discretion in the district court’s
decision. Here, one of the parties had died,1 his family
members—who would be at least tangentially involved in the
litigation should the assigned claims be filed—had become
difficult to locate or work with, and more than four years had
passed since the filing of the Complaint. The Carters, however,
contend that the court’s decision was an abuse of discretion
because, by filing within a couple of months after being assigned
the Cottams’ claims, and within a month of the stay in the
Cottams’ bankruptcy case being lifted, they ‚acted promptly in
filing the motion to amend.‛ Thus, they argue, ‚the filing of the
motion to amend four years after the original Complaint and
two years after the Second Amended Complaint are not a
reasonable basis for the trial court’s ruling.‛ We disagree.

¶9 ‚*A+n assignee cannot stand in a better position than its
assignor.‛ Sunridge Dev. Corp. v. RB&G Eng’g, Inc., 2010 UT 6,

1. The Carters contend that Cottam’s death was not a reasonable
basis for the district court’s determination that the motion to
amend was untimely because Cottam had already testified
during a deposition ‚regarding the material facts on which the
assigned claims are based.‛ Because of the way we resolve the
issue on appeal, we need not address this specific argument.

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Carter v. Landmark

¶ 16, 230 P.3d 1000; see also 6 Am. Jur. 2d Assignments § 108
(2008) (‚*T+he assignee has no greater rights than the assignor.‛).
‚In other words, the common law puts the assignee in the
assignor’s shoes, whatever the shoe size.‛ Sunridge, 2010 UT 6,
¶ 13 (citation and internal quotation marks omitted).
Accordingly, the Cottams’ timeliness in bringing their claims
against Landmark in this case is of as much consequence here as
the Carters’ timeliness in bringing their motion to amend. The
Carters assert that the Cottams ‚discover*ed+ their claims‛
against Landmark in February 20102 but were justified in failing
to assert them during the three years or so prior to the
assignment because between September 2010 and June 2013 ‚the
claims were the property of the *Cottams’+ bankruptcy estate.‛
But the Carters concede that, while the Cottams’ decision to
delay filing their claims against Landmark until their bankruptcy
case had been resolved might have been prudent or
advantageous to the Cottams, the ‚Cottams could have
continued this case during the bankruptcy, but chose not to.‛
The Carters’ contention that the assigned claims against
Landmark were brought in a timely fashion is not convincing
given that more than three years passed between the time the
claims were discovered and the time when the Carters brought
their motion to amend. Rather, the Carters stand in the shoes of
the Cottams on the assigned claims, see id., and must bear the
consequences of the Cottams’ decision not to pursue their claims
against Landmark during their bankruptcy proceedings.

¶10 The Carters further argue that, under Kelly, the district
court had discretion to deny their third motion to amend only if
it found the ‚late filing was due to a dilatory motive, a bad faith
effort during the pleading process, or unreasonable neglect in
terms of pleading preparation.‛ (Citing Kelly, 2004 UT App 44,

2. Landmark argues that the Cottams discovered their claims as
early as June 2009 when the Carters filed the Complaint. For
purposes of our analysis, we accept the date put forward by the
Carters.

20140405-CA 5 2015 UT App 198
Carter v. Landmark

¶¶ 37–38.) But the Carters have misunderstood the law. In other
words, the Carters did not buy new claims, they bought claims
that had been shelved for years; even though they were new to
the Carters, they were still claims that could have been pursued
earlier.

¶11 Kelly discussed three factors that trial courts may analyze
in determining whether to grant a motion to amend:
(1) timeliness, (2) prejudice, and (3) justification. Kelly, 2004 UT
App 44, ¶¶ 26, 28–38. Under the justification prong, a district
court should ‚focus*+ on the reasons offered by the moving
party‛ for failing to include the new ‚facts or allegations in the
original complaint.‛ Id. ¶ 38. In doing so, a court should look for
‚a dilatory motive, a bad faith effort . . . , or unreasonable
neglect.‛ Id. The Carters argue that ‚there is no evidence that
*the Cottams’+ failure to file claims against Landmark and their
failure to prosecute their claims against Landmark during the
bankruptcy case [were] due to a dilatory motive, a bad faith
effort during the pleading process, or unreasonable neglect in
terms of pleading preparation.‛ Accordingly, the Carters argue
that it was improper for the district court to deny their motion to
amend.

¶12 But district courts are not required to find that all three
factors (timeliness, prejudice, and justification) are satisfied
before denying a motion to amend. Kelly v. Hard Money Funding,
Inc., 2004 UT App 44, ¶ 42, 87 P.3d 734. Rather, ‚a court’s ruling
on a motion to amend can be predicated on only one or two of
the particular factors,‛ and ‚depending on the facts of a
particular case, the weight that a court gives to one or another
particular factor may vary.‛ Id. Indeed, ‚a court is under no
obligation to consider any or all of the [three] specific factors that
we have discussed above,‛ as long as the court provides an
explanation for its decision grounded in the ‚appropriate
principles of law or the factual circumstances that necessitate a
particular result.‛ See id. Thus, a finding of untimeliness alone,
without consideration of the justification or prejudice factors,
can be a sufficient ground for a district court to deny a motion to

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Carter v. Landmark

amend. See id. (‚‘*A+ district court acts within the bounds of its
discretion when it denies leave to amend for ‚untimeliness‛ or
‚undue delay.‛ Prejudice to the opposing party need not be
shown also.’‛ (quoting First City Bank, NA v. Air Capitol Aircraft
Sales, Inc., 820 F.2d 1127, 1133 (10th Cir. 1987))).

¶13 We have previously affirmed district court decisions to
deny motions to amend on the grounds of untimeliness even
where no accompanying finding of prejudice or specific
discussion regarding a movant’s ‚dilatory motive,‛ ‚bad faith
effort,‛ or ‚unreasonable neglect‛ was apparent. See, e.g., Failor v.
MegaDyne Med. Prods., Inc., 2009 UT App 179, ¶¶ 27–29, 213 P.3d
899 (affirming the trial court’s denial of a motion to amend on
the grounds of untimeliness alone because ‚[t]rial courts are in a
much better position than appellate courts to make such case-
specific determinations as to whether too much time has passed
to fairly allow an amendment‛ (alteration in original)); Raiser v.
Brigham Young Univ., 2007 UT App 105U, paras. 8–10 (per
curiam) (affirming the district court’s decision to deny a motion
to amend on grounds of untimeliness where the appellant had
failed to state any grounds in support of allowing a motion to
amend so late into the litigation). Thus, the district court was not
required, as the Carters contend, to find the delay in bringing the
claims was specifically a result of a ‚dilatory motive, a bad faith
effort during the pleading process, or unreasonable neglect in
terms of pleading preparation‛ before denying their motion to
amend. Rather, the district court was within its discretion to
make a ‚case-specific determination*+,‛ see Failor, 2009 UT App
179, ¶ 28, to deny the Carters’ third motion to amend on the
ground that it was untimely—a determination we have already
concluded was justified under the circumstances here where
several years had passed between the filing of the original
Complaint and the third motion to amend.

¶14 Accordingly, we affirm.

20140405-CA 7 2015 UT App 198