Tim Mcclincy, Resps. v. Miller Roofing Enterprises, Inc., App. ( 2013 )

SlAi E Or WASHlnG 111:
2013 DEC 16 AH 9^7
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
TIM McCLINCY, an individual; No. 69606-8-1
McCLINCY BROTHERS FLOOR
COVERING, INC., a Washington DIVISION ONE
corporation, dba McCLINCY'S HOME
DECORATING,
Respondents,
v.
MILLER ROOFING ENTERPRISES, UNPUBLISHED
INC.,
FILED: December 16. 2013
Appellant.
Cox, J. — This case is here on a CR 54(b) certification from the trial court
following an earlier appeal, reversal, and remand in part, for further proceedings.1
On remand, Miller Roofing Enterprises Inc. moved for leave to amend its answer.
Because the trial court properly exercised its discretion in denying Miller's
request to add 12 new affirmative defenses, we affirm.
This action arose out of a series of contracts between Miller and Tim
McClincy and related entities (collectively "McClincy"). Those contracts include a
written contract, entered into in 1997, and two oral contracts, entered into in
2006, for roofing work on a commercial building owned by a McClincy entity.
1 McClincy v. Miller Roofing Enters. Inc.. noted at 168 Wash. App. 1001,
2012 WL 1587914.
No. 69606-8-1/2
A bench trial in October 2010 culminated in a final judgment in favor of
McClincy in the amount of $1,388,193.59. Miller appealed, and this court
reversed in part in an unpublished decision.
As to the written contract claim, this court held that there was insufficient
evidence to support a particular finding, and it reversed the judgment to the
extent of that claim.
As to the oral contract claims, this court held that it was unclear whether
these claims were barred by the statute of limitations, whether Miller waived the
affirmative defense of untimely service of process, and when McClincy had
notice of the defects underlying its claims. This court noted that the damages on
which the breach of written contract claim was based were not segregated from
the damages awarded for the breach of the oral contract claims. Accordingly,
this court reversed the judgment on the two oral contract claims and remanded
for further proceedings. In no way can the prior decision of this court be
reasonably read as a "do-over" of the entire original trial.
In July 2012, following remand, Miller moved to amend its answer to
assert 12 new affirmative defenses in addition to the seven defenses it previously
asserted in the original trial. These new defenses included:
(8) Untimely service of process.
(9) Untimely notice of alleged defects.
(10) There is a lack of privity between Plaintiff McClincy
Brothers Floor Covering, Inc. and this Defendant and,
therefore Plaintiff McClincy Brothers Floor Covering,
Inc. lacks standing to pursue claims against
Defendant.
No. 69606-8-1/3
(11) The damages sustained by Plaintiffs are unavoidable
from the standpoint of this Defendant.
(12) Intervening and superseding cause.
(13) Plaintiffs accepted the performance of Defendants.
(14) Plaintiffs misused the product.
(15) No warranty was provided or any applicable warranty
expired.
(16) Plaintiffs' claim is barred by the rules governing
spoliation of evidence.
(17) Plaintiffs' claim for repair costs will result in an unjust
enrichment and substantial increase in the value of
the property and its reasonable useful life.
(18) Plaintiffs' claim and suit are barred by RCW
4.16.326(1)(g).
(19) The alleged breaches do not and will not adversely
affect the performance of the building(s) and any
adverse effect is merely technical and not significant
to a reasonable person.[2]
In its motion for leave to amend, Miller argued that several of these
defenses were "formalizing arguments made by Miller previously."
McClincy opposed the motion. McClincy correctly argued that the prior
decision of this court limited the scope of issues to be addressed on remand.
McClincy also argued that allowing the amendment would be prejudicial, that
Miller waived these affirmative defenses, and that the defenses were barred by
the doctrine of collateral estoppel.
Clerk's Papers at 9.
No. 69606-8-1/4
The trial court denied Miller's motion for leave to amend. It later entered
an order and certified it for immediate review pursuant to CR 54(b) as a final
appealable judgment.
MOTION TO AMEND ANSWER
Miller argues that the trial court manifestly abused its discretion by
denying its motion for leave to amend the answer and affirmative defenses.
Specifically, it argues that Washington law permits amendments to pleadings
after remand and that the amendment is proper under CR 15. We hold that the
trial court properly exercised its discretion when it denied this motion.
The decision to grant leave to amend pleadings is within the sound
discretion of the trial court.3 When reviewing the trial court's decision to grant or
to deny leave to amend, the reviewing court applies a manifest abuse of
discretion test.4
Our review of the trial court's exercise of discretion is guided by principles
stated in In re Marriage of Littlefield and the authorities on which it relies.5 In that
case, the supreme court stated:
A court's decision is manifestly unreasonable if it is outside
the range of acceptable choices, given the facts and the applicable
legal standard; it is based on untenable grounds if the factual
3 Hines v. Todd Pac. Shipyards Corp.. 127 Wash. App. 356, 373-74, 112
P.3d 522 (2005).
4 Herron v. Tribune Publ'q Co.. Inc., 108 Wash. 2d 162, 165, 736 P.2d 249
(1987) (citing Del Guzzi Constr. Co. v. Global Nw.. Ltd.. 105 Wash. 2d 878, 888,
719P.2d 120(1986)).
5 In re Marriage of Littlefield. 133 Wash. 2d 39, 940 P.2d 1362 (1997).
No. 69606-8-1/5
findings are unsupported by the record; it is based on untenable
reasons if it is based on an incorrect standard or the facts do not
meet the requirements ofthe correct standard.[6]
Here, the trial court correctly construed the remand to be about limited
issues, not the whole case. At oral argument, the trial court stated:
And they knocked out a few things, which I think narrows it.
In fact, they did take the time to narrow the issues on remand.
They didn't just say it's a do-over, they said specifically what I'm
to consider. They didn't say open up the record. They didn't
say open up discovery again. They said, directly, you need to
find enough evidence, one way or the other.
But I think it would be absolutely prejudicial to allow the
amendment at this late stage in the proceedings. It's like saying
everything that [Miller's prior counsel] did doesn't count.[7]
The question is whether the trial court's decision is outside the range of
acceptable choices, given our prior decision and the facts and the applicable
legal standard.
Miller argues that "longstanding Washington law" broadly permits
amendments to pleadings after remand, citing to various cases. McClincy
argues that because this case was remanded with instructions to retry only
certain discrete issues, circumstances in this case are "starkly different" from the
circumstances in the cases cited by Miller. Which of these contrasting views is
correct under the circumstances of this case is at issue.
6Id at 47 (citing State v. Rundguist. 79 Wash. App. 786, 793, 905 P.2d 922
(1995)).
7 Report of Proceedings (Oct. 30, 2012) at 17 (emphasis added).
No. 69606-8-1/6
Neither party cites the supreme court's opinion in Ennis v. Ring.8 But dicta
in that case supports the trial court's decision.
That case involved two appeals.9 The original action was brought by court
commissioners for rent and for breach of lease.10 At the conclusion of the case,
the trial judge entered a judgment of dismissal without prejudice.11 The supreme
court, on the first appeal, reversed in part with instructions to grant a new trial
upon the causes of action which had been dismissed erroneously.12 On remand,
the lessees amended their answer to include a counterclaim.13 The case was
appealed a second time, and the plaintiffs urged that "the trial court should not
have permitted amendment of the answer to include an entirely new defense
after remand for retrial on specific issues."u In its opinion, the court stated:
"We have no quarrel with this contention, in proper circumstances, but it is clear it
is not applicable to the instant case."15 Although this statement was dicta, it
8 56 Wash. 2d 465, 341 P.2d 885 (1959).
9 Id at 469.
10 jd
11 Id
12 Id
13 Id
14 Id. at 470 (emphasis in original).
15 Id.
No. 69606-8-1/7
supports the trial court's exercise of discretion in this case. In sum, a "remand for
retrial on specific issues" is different from a general remand.
Nonetheless, even if an amendment to a pleading in this circumstance is
procedurally proper, the amendment is still governed by CR 15. For that reason,
we next consider the decision under that rule.
CR 15(a) governs amendments of pleadings. The rule provides that leave
to amend "shall be freely given when justice so requires."16 The purpose ofthe
rule is to "facilitate proper decisions on the merits, to provide parties with
adequate notice of the basis for claims and defenses asserted against them, and
to allow amendment of the pleadings except where amendment would result in
prejudice to the opposing party."17
The factors a court may consider in determining prejudice include undue
delay, unfair surprise, and whether the amendment is likely to result in jury
confusion, introduce remote issues, or lead to a lengthy trial.18 The timing ofa
motion to amend pleadings, in terms of the "progress of litigation," may result in
prejudice but otherwise is not dispositive.19 Similarly, the fact that an amendment
could have been included in an earlier pleading will not preclude amendment
16
CR 15(a).
17 Wilson v. Horslev. 137 Wash. 2d 500, 505, 974 P.2d 316 (1999) (citing
Caruso v. Local Union No. 690. 100 Wash. 2d 343, 349, 670 P.2d 240 (1983)).
18 Herron, 108 Wash. 2d at 165-66.
19 ]d at 166 (citing Caruso. 100 Wash. 2d at 349-50)).
No. 69606-8-1/8
absent prejudice.20 Overall, the "touchstone" for the denial of a motion to amend
is the prejudice such an amendment would cause to the nonmoving party.21 A
showing of actual prejudice must rise beyond conclusory assertions.22
Here, the trial court explicitly stated that its justification for the court's
denial of the motion was the prejudice that McClincy would endure:
I don't think that's what this opinion is telling me to do, is to reopen
the record on all issues and allow [Miller] to plead affirmative
defenses that were never pled by [Miller's prior counsel] in the first
place. That's prejudicial; that would be a manifest abuse of
discretion.[22]
The trial court's determination of prejudice is well supported. McClincy's
counsel argued to "[pjrove up affirmative defenses that were not pled require[s]
new discovery, new evidence, [and] new expense."24 He stated that "the
prejudice is the time, the delay, and the extraordinary expense," and he argued
that "[McClincy] doesn't have the resources available to [it]."25
McClincy also submitted a declaration from its attorney outlining the
impact of such an amendment. McClincy's counsel indicated that some or all of
the 13 witnesses who testified at trial would have to be re-deposed, and some or
20 Caruso. 100 Wash. 2d at 350.
21 Wilson. 137Wn.2dat505.
22 See Walla v. Johnson, 50 Wash. App. 879, 884, 751 P.2d 334 (1988);
Caruso. 100 Wash. 2d at 351.
23 Report of Proceedings (Oct. 30, 2012) at 18.
24 ]d at 14.
25 Id.
No. 69606-8-1/9
all would have to be recalled for trial testimony. He stated that even if Miller did
not intend to engage in discovery, McClincy would still have to marshal evidence
in opposition.
Although McClincy was not able to pinpoint the exact cost of relitigating
these issues, McClincy's arguments rise beyond mere conclusory assertions.
McClincy clearly identifies each defense that will require new evidence and
expert testimony.
In Oliver v. Flow International Corp., this court held that the opponent's
showing of prejudice was adequate to justify denial of a motion to amend the
complaint because "[a] new round ofdiscovery would have been necessary."26
As discussed above, this would be a similar concern here.
In sum, given the trial court's concern about reopening the record, and
McClincy's arguments that the amendment would be prejudicial, the trial court did
not manifestly abuse its discretion when it denied Miller's motion.
Miller makes a number of arguments that the amendment is proper under
CR 15, but they are not persuasive. Accordingly, we reject all of them.
First, Miller argues that there is no prejudice to McClincy because
McClincy did not object to Miller's jury demand. That is irrelevant. Equally
irrelevant is that no trial date has been set. The issue is not whether McClincy
would have ample time to conduct discovery, amend its complaint, or identify
26
137 Wash. App. 655, 664, 155 P.3d 140 (2006).
No. 69606-8-1/10
new witnesses. Rather, the issue is whether McClincy would have to do this at
all. Thus, Miller's arguments are not helpful.
Second, Miller contends that McClincy's argument that it will have to
reopen discovery at enormous cost is made "without any evidentiary support, and
fails to acknowledge recoveries by [McClincy]." But, as discussed above, the
declaration submitted by McClincy's counsel, as well as the arguments made at
oral argument, both demonstrate the expense that McClincy might incur if
discovery was reopened. Although McClincy could not pinpoint the cost, this
showing was adequate. Additionally, Miller's suggestion that McClincy could
move for a protective order is irrelevant. Miller cites no authority for the
proposition that this is the "proper remedy" for potential prejudice, or that this is to
be considered in a CR 15 analysis when determining whether the opposing party
will suffer prejudice. Thus, we reject these arguments.27
Third, Miller argues that the evidence establishes that "Miller, and not
[McClincy], would be severely prejudiced if Miller were forced to try this matter
without some limited discovery." But again, Miller has cited no authority that
requires a court to consider prejudice to the moving party or that instructs a
court to weigh the competing prejudices.
Fourth, Miller argues that many of these defenses are now appropriate "in
light of the changed procedural posture of the case" and that the issues are "now
27 State v. Dennison, 115 Wash. 2d 609, 629, 801 P.2d 193 (1990): Cowiche
Canyon Conservancy v. Boslev, 118 Wash. 2d 801, 809, 828 P.2d 549 (1992).
10
No. 69606-8-1/11
reconfigured." Miller's argument has no weight. As discussed above, the issues
are not "reconfigured" on remand.
Finally, Miller argues that several of the affirmative defenses are proper
under CR 15(b), which provides that "[w]hen issues not raised [in] the pleadings
are tried by express or implied consent of the parties, they shall be treated as if
they had been raised in the pleadings."28 Miller argues that a number ofthese
defenses "merely formalize arguments previously made by Miller."
Under CR 15(b), "failure so to amend does not affect the result of the trial
of [those] issues." Accordingly, whether McClincy impliedly consented to any of
these defenses must still be addressed.
In determining whether the parties impliedly tried an issue, an appellate
court will consider the record as a whole.29 But the record that is presently
before this court in this review is very limited. It obviously is not the same record
that was before this court on the prior review. Thus, we are not able to make the
determination about which of these defenses, if any, were impliedly consented to
by McClincy in the prior trial. The trial court is in the best position to make this
determination in the first instance. We defer to the trial court to make that
determination in this case.
In this court's prior opinion, this court expressly directed the trial court, on
remand, to consider whether Miller waived one of these defenses (service of
28
CR 15(b).
29 Dewey v. Tacoma Sch. Dist. No. 10, 95 Wash. App. 18, 26, 974 P.2d 847
(1999).
11
No. 69606-8-1/12
process). The trial court indicated in its oral ruling that it would follow this court's
instructions: "I'm going to just go paragraph by paragraph, based on what their
remand directs this Court to do."30 Accordingly, even if Miller's answer does not
formally reflect the addition of these defenses, the trial court will consider the
relevant defenses, including any defenses that may have been impliedly
consented to, on remand.
In sum, we conclude that the trial court did not manifestly abuse its
discretion in denying the motion for leave to amend. McClincy would be
prejudiced by such an amendment. Further, whether there is a formal
amendment does not affect the trial court's limited review and consideration of
the relevant issues.
WAIVER, COLLATERAL ESTOPPEL, AND STARE DECISIS
McClincy argues that the proposed affirmative defenses are barred by
waiver, by the doctrine of collateral estoppel, and by stare decisis. Because of
our disposition, we need not address these arguments.
We affirm the order denying the motion to amend.
X
WE CONCUR:
'-US^t-y Aca: tyjud^
30 Report of Proceedings (Oct. 30, 2012) at 17.
12