Frugal Flamingo Quick Stop v. Farm Bureau Mut. Ins. Co., 420 P.3d 57

From 2010–2011 an employee stole cash and merchandise from The Frugal Flamingo Quick Stop (Store). The Store had an insurance policy with Farm Bureau Mutual (Insurance Company) including $5,000 employee-dishonesty coverage per occurrence.
On November 10, 2011 Store notified Insurance Company of over $121,000 in losses. On November 15, 2011 Insurance Company delivered a $5,000 check to Store’s owner.
On December 7, 2011 Store sued only the Employee for conversion, fraud, and civil conspiracy; it did not assert claims against Insurance Company.
Store sought to join Insurance Company as a party in January 2014; the district court did not act immediately. The court finally granted joinder in August 2015, and Insurance Company was served in September 2015.
Store moved to amend its complaint in January 2016 to add breach of contract, breach of the covenant of good faith and fair dealing, and bad-faith claims against Insurance Company. Insurance Company moved to dismiss, arguing the claims were time-barred.
The district court denied leave to amend as futile (statute of limitations expired in November 2014) and as untimely and unjustified; Store appealed, arguing the amendment should “relate back” to the 2011 complaint.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the proposed insurance claims "relate back" to the original complaint so they are timely	Relation-back doctrine applies because the insurer’s liability is tied to the same occurrences and the insurer had notice	Relation-back does not apply: claims against insurer arise from different conduct (post-loss handling) and insurer lacked timely notice	Relation-back does not apply; claims did not arise from same transaction and insurer lacked notice before limitations ran
Whether amendment would be futile because of the statute of limitations	Amendment is timely if relation back applies	Amendment is futile because claims accrued in Nov 2011 and limitations expired Nov 2014	Amendment would be futile absent relation back; district court correctly found futility
Whether district court abused discretion by denying leave to amend as untimely/unsupported	Delay was excusable given ongoing investigation and practical reasons for late amendment	Motion to amend was filed more than four years after filing, after resolution against Employee, with no adequate justification	No abuse of discretion; denial for undue delay and lack of justification affirmed
Whether the court plainly erred by not sua sponte applying relation-back	Court should have considered relation-back even if not argued below	Relation-back was inapplicable on the record; no plain, obvious, harmful error	No plain error — relation-back inapplicable and not established on either element

Nelson v. Target Corp., 334 P.3d 1010 (Utah Ct. App. 2014) (standard for reviewing futility of amendment tied to motion-to-dismiss standards)
Ottens v. McNeil, 239 P.3d 308 (Utah Ct. App. 2010) (relation-back for new parties limited to misnomer or identity-of-interest situations)
Doxey-Layton Co. v. Clark, 548 P.2d 902 (Utah 1976) (relation-back generally not allowed for adding new parties because it would defeat statutes of limitation)
Highlands at Jordanelle, LLC v. Wasatch County, 355 P.3d 1047 (Utah Ct. App. 2015) (new or different acts of misconduct create new claims that cannot relate back)
Penrose v. Ross, 71 P.3d 631 (Utah Ct. App. 2003) (relation-back unavailable where original defendant’s defenses differ materially from added party’s defenses)
Shah v. Intermountain Health Care, Inc., 314 P.3d 1079 (Utah Ct. App. 2013) (court may deny amendment as futile if the proposed claims would not survive a motion to dismiss)