*1 1973] & Sons v Gunter Co BEN P. FYKE & SONS v GUNTER COMPANY Pleading—Amendment—Court Rules—Prejudice. 1. provides
A court pleadings rule leave to amend shall be freely given requires; Michigan Supreme' acknowledged Court has the Federal source of that rule and guided by precedents; has been Michigan rule, the Federal rule, designed as the Federal to facilitate the amendment of pleadings except prejudice opposing where to the (GCR1963,118.1). result Pleading—Amendment—Undue Delay—Bad Faith—Dilatory 2. Motive—Prejudice—Futility of Amendment. pleadings
A ordinarily motion granted, to amend should be and particularized only denied delay, reasons such as undue bad dilatory part movant, faith or repeated motive on the allowed, failure to cure previously deficiencies amendments prejudice opposing party by undue virtue of allowance of amendment, futility amendment; sought the leave should, (GCR requires, "freely given” as the rule 118.1). Pleading—Amendment—Discretion—Findings. 3. safeguard implement
To policy favoring the amendment pleadings, Michigan Supreme Court has directed that upon denial of motion to amend such exercise of discretion supported by specific findings should be as to reasons for the same. [17] [12, [9,18,19, 21, [11] [10] [1, [7, [3] [5, 6] 22] 2, 4, 61 Am Jur 61 Am Jur 61 Am JUr 61 Am Jur 61 Am Jur 18 Am Jur 61 Am Jur 8,13,14,15, 23] 2d, Pleading 2d, Pleading 2d, Pleading 2d, Pleading References 2d, Pleading 61 Am Jur 2d, Corporations 2d, Pleading 20] 61 Am Jur § for Points in Headnotes § §§ 133-155. 2d, Pleading § 309. §§ 295. 363. §§ 308-313. 152-160. § 2d, Pleading 174. §§ 125-168. § 305 et seq. 390 Mich Pleading—Amendment—Prejudice—Words and Phrases—Re- Rules. sult Trial—Court possible impact pleadings of allowance of an amendment *2 prejudice case is not the the outcome of a kind of contem- plated providing for pleadings; in the court rule amendments to "prejudice” prevent the refers to matter which word would a trial, having from a fair matter which he could not contest, e.g., surprised; possible properly prejudice when the allegations must stem from the fact that new are offered original pleading, late in the rather than and not from the fact opponent may lose his case on the if the merits allowed, may he amendment is whereas win it if the amend- (GCR 1963,118). ment is denied Pleading—Amendment—Discretion—Limitation—Court 5. Rules. judges The to trial discretion confided under the court rule pleadings] freely given standard that "leave amend shall be [to boundless; justice requires” language when so is not this im- poses necessitating a on the discretion of court limitation a finding justice would not be served the amendment (GCR 1963,118.1). Pleading—Amendment—Discretion—Claims—Defenses—Court 6. Rules.
A trial the discretion abuses confided to him under the pleadings court rule standard that leave to amend shall be given justice freely requires when he utilizes it to (GCR 1963,118.1).. recognized obviate a claim or defense Actions—Claims—Defenses—Corporations—Annual Report— 7. Fee—Statutes—Legislative Policy—Supreme Franchise Court. defenses, The substantive basis of all and "favored” and claims alike, Legislature "disfavored” are acts of the and the common- Michigan Supreme appel- law decisions of the Court or other Courts; Legislature stringent late concluded that measures necessary bring compliance were about with the annual corporations, requirements and franchise fee which for repealed, Michigan Supreme has now been and the Court has (MCLA450.87). steadily legislative policy enforced that Delay—Bad Pleading—Amendment—Litigant’s Right—Undue 8. Faith—Dilatory Motive—Prejudice—Futility of Amend- Rules. ment—Statutes—Common Law—Court pleading of of an is not an act allowance amendment to right grace, litigant seeking in the absence but a of a to amend & Sons Gunter Co any apparent delay, or declared reason such as undue bad motive, dilatory repeated deficiencies, faith or failure to cure amendment, prejudice, futility etc.; undue an individual judge may personal substitute his view of policy statutory, public and sound or common-law or apply. court rule meant Pleading—Amendment—Defenses—Limitation 9. of Actions.
A can statute limitations defense be raised amendment to pleadings any like other matter. Pleading—Amendment—Disposition of Case—Issues—Facts— Law. probable disposition The allowance of aof case to abe factor deciding permit pleadings whether deny parties issues, hearing would full on all the facts law, inevitably produce and and decisions based on scanty composed pleadings moving papers records possibly argument. oral *3 Pleading—Amendment—Merits 11. of Claim—Merits of Defense —Futility of Amendment. court, pleadings, ignore A on a motion to amend should legally substantive merits of a claim or defense unless it is insufficient on face and would be futile to allow the amendment. Pleading—Amendment—Tardy Amendment—Expense Oppo- 12. to Party—Affirmative Defense—Discovery—Interrogato- site ries. prejudice unnecessary expense No in terms of was to a caused plaintiff by delay seeking defendant’s three-month to amend complaint allege its answer to a to an affirmative defense pretrial only discovery where the was defendant’s submission plaintiff’s response interrogatories and the focus interrogatories to, of, directly related indeed the basis defendant’s amendment. Pleading—Amendment—Claim-t-Defense—Statutes—Rule 13. Law. judge may grappling
A
avoid
with the nettlesome
problem applying
creating
special
by
facts to law
rule for a
case where the claim or
raised
imploring
an
confronted with
factual
or
situation and a statute
appear
require
contrary
of law
rule
which would
a result
sense of
reason or
his
of the situation.
Delay by moving offering party pleadings amendment to major prejudice can opposing be a source of die, may evidentiary because may witnesses material be lost or destroyed, expense unnecessary may during be incurred pretrial proceedings, litigation may proceecf and the point to a opposing party reasonably expected where the cannot against amendment; especially pertinent defend this is an of, during, factor on the eve after trial. Pleading—Amendment—Delay—Bad Faith—Prejudice—Bur- 15.
den of Proof. delay showing Mere in the absence of a of either bad faith or prejudice actual does not warrant denial of a motion to amend pleadings, though generally prejudice the risk of substantial time; passage increases with the all amendments have they common that pleading are offered later in time than the they seek to amend. Pleading—Contracts—Amendment—Delay—Corporations— Report—Franchise Annual Fees—Affirmative Defense—In- terrogatories. seeking payment Defendant’s failure in a suit for services ren- agreement dered under an to raise the defense in its initial plaintiff corporation answer that had been in default in filing paying its annual franchise fees when it was aware at shortly about the time of the answer or thereaf- corporation ter the had been in default did not constitute bad justify setting up faith and denial of an amendment such an defense, affirmative where defendant asserted it did not have sufficient information to determine if the contract had been entered into while the inwas until it default reviewed plaintiff’s interrogatories good answer to and the faith of de- interrogato- fendant’s assertion is attested its service of the eight days ries within of its answer. *4 Pleading—More Statement—Discovery—Court 17. Definite Rules. party
A court rule allows a to move for a more definite statement responsive pleading opponent’s pleading before if the vague ambiguous comply is so that it fails to with the requirements rules; regarding of the other information adversary’s through discovery claim or defense is to be obtained (GCR 1963,115.1). Fyke & Sons Gunter Co Pleading—Complaint—More 18. Definite Statement—Amendment —Answer—Discovery. complaint properly
Plaintiff’s set forth sufficient facts to state "his cause action” and "to inform the adverse of the upon defend”; nature is of the cause he called to in this context, judge might properly grant where the have refused to statement, a motion a more definite for the defendant’s failure justify to make a does not a such motion refusal to allow an defendant’s answer based on information ob- (GCR 1963,111.1). through discovery tained Pleading—Answer—Amendment—Affirmative 19. Defenses. defenses, answer, even Affirmative if asserted in the initial may by amendment; consequence be introduced of a failure affirmative include an defense an answer is that testi- mony support may rejected of the defense unless the pleadings by defect in the is cured amendment.
Dissenting Opinion Coleman, T. E. Brennan and M. S. JJ. Pleading—Amendment—Court 20. Rules. provides pleadings A court rule that leave to amend should be granted freely requires”; general proposi- "when as a tion the effect of the amendment on ñnal outcome of the case, is, usually that merits the amendment are not to be by determining "justice considered the trial whether (GCR requires" 1963,118.1). granted that leave amend be Pleading—Answer—Amendment. 21.
The mere fact that an a amendment to defendant’s answer would provide complete plaintiffs a defense to the claim should not be ground refusing but, leave to amend the nature of the may evaluating be considered the trial court preferred lateness of the amendment. Corporations—Annual Reports—Franchise Fees—Statutes— Equity—Discretion. Forfeiture—Taxation— capacity permitted by providing The defense of lack of a statute corporation any shall not maintain action while in Sling required reports paying default in its annual or in forfeiture, accurately designed franchise fees more civil compliance corpora- Sling requirements enforce with the and, tion laws it extent enures to beneSt of individuals, bounty, is no than a offered state more government corporate as a device Iran- to insure collection of *5 Mich forfeitures, taxes; permits although equity law such chise ought judge required not to trial and the abhors them impact eyes the exercise of his discretion close his (MCLA450.87). Pleading—Answer—Amendment—Discretion—Corporations— 23. Fees—Contracts—Interrogato- Report—Franchise Annual ries. upon judge to exercise his discretion The circuit when called answer, refusing amendment to defendant’s belated its to allow corporation plaintiff lacked to raise a defense agreement capacity because the maintain the action between performed the work while them entered into and was pay failure to file annual and was in default for that the contract considered was admit- franchise fees defendant, it follows that defendant’s officers ted because agreement, agents fully aware of the the date of and were knowledge parties agreement equally within the was interrogatories to determine whether for there was no need period plaintiff’s corporate contract was made within
default. Division Bron- Appeals, Court of Appeal from JJ., Valkenburg, son, J.,P. Danhof and Van Oakland, Hampton, P. J. Sub- affirming William (No. Term October mitted October 18, 1973. 54,414.) Decided December Docket No. App 43 Mich 144 reversed. Sons, Inc., against P.
Complaint by Fyke Ben seeking for services Company payment The Gunter Defendant’s motion agreement. under an rendered an affirmative to amend its answer to include to the Court of appealed Defendant defense denied. Affirmed. Defendant granted. on leave Appeals pro- for further appeals. Reversed and remanded ceedings. Simon), plaintiff. F. (by & Rice David
Hyman for defendant. Greenberg, Allan G. & Sons v Gunter Co Appeals J. The Court held that
Levin, justified denying trial the motion of Company, *6 defendant, The Gunter to amend its up an affirmative answer set defense based on Fyke Sons, P. Ben Inc.’s failure file report pay annual an and franchise fees. re-We verse.
Fyke seeking payment for services rendered agreement under an with Gunter. Gunter’s answer Fyke performed obligations its admits that under agreement. also Gunter admitted that it had pay and failed refused to invoices submitted Fyke. filing answer,
Three months after Gunter sought allege to amend to as affirmative de- repealed 450.87; fense under now MCLA MSA Fyke capacity 21.871 that lacked the to maintain agreement this action because the was entered performed and into default for the work while inwas report pay file failure to its annual and franchise fees.
During argument Fyke’s motion, oral on the greater counsel attributed the than six-months lapse paying the annual fran- distraught chise fees to the frame of mind of the person entrusted with the task whose husband suffering a from serious illness. judge, noting after the services had performed finding Fyke’s non-filing "jus-
been tifiable”, Responding Gunter’s,
denied motion. [to amend] GCR 118.1’s standard that "leave freely given requires”, when, shall be judge permit amendment, stated that to which possibly escape potential allow Gunter to liability $21,000, excess of would constitute justice”. "mockery of 450.87; repealed by MSA PA 1 MCLA 21.87 was which 21.200(1098). 1,1973. January 450.2098;
became effective MCLA MSA Mich granted appeal. sought leave to and was Gunter upholding Appeals, denial The Court of proposed amendment, said that a trial the may properly respective parties’ the merits of the "evaluate deciding per- whether to claims” mit an amendment. granted leave to consider whether further
We or defense a seeks to claim "merits” of a may properly be considered raise in deciding allow the amendment. whether
I acknowledged the Federal source of have We guided by the Federal been Rule 118 and have precedents. Cooper, 401, 405; 376 Mich LaBar v *7 (1965). 137 NW2d "designed rule, is rule, Federal as the Our except pleadings
facilitate where party opposing prejudice re- Hougham, 310, 316; 364 US v States United sult”. 81 S (1960). A motion to 13, 18; 5 L Ed 2d Ct granted, ordinarily denied should be amend only particularized reasons: for reason— apparent or declared any "In the absence of on the dilatory motive delay, faith or undue bad such as movant, to cure deficiencies repeated part of the failure allowed, prejudice to undue previously by amendments of the amend- of allowance opposing party by virtue the ment, sought amendment, leave etc.—the futility of ” given.’ Foman should, require, 'freely the rules be as 230; Ed 2d Davis, 178, 182; 9 L 83 S Ct 371 US (1962). favoring policy implement safeguard To upon amendment, directed this Court has exercise "such to amend of a motion denial discretion should findings specific by supported Fyke & Sons v Gunter Co as to reasons the same”. LaBar v Cooper, supra, p (Emphasis supplied.)
II trial Underlying judge’s denial of Gunter’s motion to amend and the Court of Appeals’ affirm- ance was the stated concern that allowance of the amendment would cause lose its otherwise meritorious claim and thereby "prejudice” it. possible impact of allowance of an amend- ment on the outcome of a case is not the kind of prejudice contemplated by Rule 118.1. The Com- mittee Comment accompanying Rule spells out the particular meaning of the word "prejudice” in this context: " 'Prejudice’ refers prevent to matter which would matter, party trial, having from a fair which he could contest, e.g. It does not surprised. ” refer to effect on the result of the trial otherwise.
(Emphasis supplied.)
A number of courts have held that
although
proffered
allowance of the
amendment may cause
opposing
to lose on
ultimately
the merits
this is not a factor
to be
considered
deciding
grant
whether
the motion.2
question of
"[T]he
prejudice
presented
is
by the time at
which
is
plaintiff,
indeed,
prejudiced
"In
a sense the
the amendment
allowed,
.
prepared
reason of the fact that
if it be
he must be
trial,
upon
*8
meet
it
if
defendant should
establish
to the
fact,
deprive plaintiff
satisfaction of the trier of
it will
of success in
However,
advantage
his action.
this
to the defendant and disadvan
tage
justify
is
sufficient to
denial of
a
defendant’s
application.”
Nebbia,
813,
(Sup
Nebbia v
111
816
NYS2d
Ct Monroe
1952).
Co,
(ED
Similarly,
Co,
Pa,
see Schwartz v
Stores
FRD 38
American
1958);
293;
Brink v Central School
No
63 Misc 2d
District
Ct,
(Sup
Term,
Co,
Spec
1970);
NYS2d
Trial and
Dutchess
York,
Term,
(Sup Ct,
Kings
Iacono New
NYS2d
Trial
1954).
Co,
Apart from immaterial "prejudice” of ulti- case, mately losing neither Fyke argument findings nor the trial in his judge mentioned any other prejudice. source of
Ill Fyke contends that "the jus- furtherance tice” a consider may properly resulting equities proffered amendment. This is much contention, discussed, like the just that the merito- riousness of the claim or defense be consid- may in deciding ered whether its allowance would be "prejudicial”. argues is, that the annual defense be, ought
or "disfavored” and that a judge may properly disallow a disfavored claim offered by amendment.
The discretion confided to trial
judges under
standard,
given
"leave shall be freely
justice
Burg
v B & B
requires”,
is not boundless.
In
Enterprises,
2 Mich App
496, 500;
3 Similarly, Kentucky Appeals in Ashland Oil Court of *9 659 & Sons v Gunter Co Opinion Court parameters admittedly judge’s
While incapable being precisely discretion are deline- ated, a abuses this discretion when he uti- recognized lizes to obviate a claim or defense. The substantive basis of all claims defenses, and alike, "favored” and "disfavored” are acts of the Legislature this and the common-law decisions of appellate Legislature, or other Courts. The not **4 stringent criticism,* without concluded that mea necessary bring compliance sures were about require with the annual and franchise fee steadily legis ments. This Court has enforced that policy.5 lative The allowance of an amendment is not an act of
grace,
right
litigant seeking
but a
of a
to amend
any apparent
"[i]n the absence of
or declared
delay,
dilatory
reason—such as undue
motive
bad faith or
* * * repeated
,
failure to cure deficiencies
* *
*
* * *
prejudice
,
futility
,
undue
of amend
supra, p
ment,
Davis,
etc.” Foman v
recognize
judge’s personal
If we were to
view
rejecting
of a claim or defense as a valid reason for
amendment,
we would find it difficult to ex-
plain why
personal
his
view should not also be
assaying
relevant
a claim or defense raised in
pleading.
the initial
Refining
Phillips,
449,
1966),
(Ky,
explained
Co v
404 SW2d
450
working
providing
of its court rule also
leave to amend shall be
"freely given
justice
requires.”
effect,
In
the Court stated
"justice” "requiring”
prerequisite
that
amendment.
would work "an
was not a
for the
of an
Rather,
only
such an amendment will be denied
if it
injustice
particular
in the
circumstance”.
See, also,
Cooper, supra,
Congregation
LaBar v
B’nai Sholom v
Martin,
659, 669;
(1969);
Chesapeake
382 Mich
(1924). 390 Mich op Opinion the Court judge may
An individual substitute personal public policy his view sound statutory, *10 the or common-law court rule apply. meant early principally statements,
There are some cases where a statute limitations defense was may properly amendment, offered a court deny an amendment which seeks to introduce a Today plea”.6 "disfavored a statute of limitations any raised defense can be like 14). (see early fn matter other Those statements impulse. have thus their For this lost reason and stated, the other reasons we do not find these persuasive. statements probable
We observe further to allow the disposition deciding of a case to be a factor permit deny an whether to amendment would parties hearing issues, a full on all the facts and inevitably produce law, and decisions based composed scanty pleadings on records and mov- ing papers possibly, argu- case, as in this oral ment. present hearing
No witnesses were at on testimony amend; Gunter’s motion no challenge Fyke’s taken. Gunter had no occasion to justifying factual late assertions of its report. gleaned annual All the "facts” were from Fyke’s unverified statements. ignore amend,
On a motion to a court should substantive merits a claim or defense unless legally and, thus, on insufficient its face as expressed supra, Davis, in Foman v it would be Wright "futile” to allow amendment. See p Miller, Procedure, § 1487, Federal Practice & 6 See, (1852). e.g., Spears, Cooke Cal 409 & Sons v Gunter Co op Opinion the Court
IV
Fyke, relying
Eubanks;
Wilson v
36 Mich
App
(1971),
287, 293;
In Wilson v allowed years the amendment two after the action was initially commenced. Had the defendant raised the plaintiffs spared defense the two-year would have been prosecuting During cost of their action. *11 period, plaintiffs participated pre- this the had in discovery, trial of none which was related to the of statute limitations defense. The costs incurred by plaintiffs during two-year delay the the in the assertion of the defense was a factor the Court Appeals’ permit of refusal to the amendment. assuming
Even both that Gunter’s amendment asserts a defense that technical its three- delay raising month the was a failure to square pre- "cut corners”, we discern no similar judice unnecessary expense terms caused Fyke by pretrial only Gunter’s tardiness. The dis- covery Fyke’s was Gunter’s submission and re- sponse interrogatories; interrog- to the focus of the directly to, of, atories was related indeed the basis Gunter’s amendment.7 opinion
As the author of the in Wilson v Eu- Nicholas, A., Contrast v Bouas S. 252 F Sociedad Maritima San (SD NY, Supp 1965); 646; 1025; L 86 Ct cert den 382 US S (1966): defendants, having Ed 2d "The with burdened the pretrial procedures years alleged over the after the settlement was 390 Mich op Opinion the Court banks, opinion to that supra, confess I wish it appears to rest to the extent on a goes astray Uniform Statute of the Limita personal view *8 opinion Act.* The Claims rea Foreign tions on statutes are borrowing enacted to that since soned to avoid shopping forum interminable prevent non-residence, to periods due tolling of limitational to apply of the Act beyond policy it is Wayne Circuit Court commenced in action Detroit against another resident. Detroit residents attempt It not now appropriate Eubanks, in Wilson v the rule stated redefine I supra. am now convinced say Suffice it to imploring with an factual judge, that a confronted or rule of which would a statute law situation and contrary to his sense of require a result appear situation, may the reason or prob- grappling with nettlesome properly avoid creating special to law facts applying lem of or defense is raised for a where claim rule case by amendment. Eubanks, supra, Wilson mentioned,
As on a to but did not rest decision Court adverted controlling statute. possible construction question statutory too is a Underlying this case prevail, if is to appears It construction. existing precedent must be reexamined. (1972 284; PA Corporation Act Business
The new seq.) et seq.; MCLA 450.1101 et MSA 21.200[101] aon con- of an action does not bar maintenance *12 in of default during period tract into a entered fees. report franchise filing paying an annual might justify policy in change legislative This as the existing precedent reconsideration it, informing plaintiff’s attorneys now should not about made without deny day his in court.” be allowed 600.5861; MSA 27A.5861. MCLA & Sons v Gunter Co purpose penalties terrorem of the harsh longer former act are no functional. question
The constructional has not raised, been argued. allegations sup- briefed The factual port Fyke’s filing claim that the late of its report justified proven. annual have not been question could We present appeal. reach this on the
V affirming In disallowance the amendment Appeals the Court of said that Gunter’s failure "timely present its amendment constituted the primary judge’s basis for the trial denial”.
Delay by moving party offering an amend- major prejudice ment can abe source of opposing party. may Evidentiary Witnesses die. may destroyed. Unnecessary material be lost or expense may during pretrial pro- be incurred ceedings. litigation may proceed point to a opposing party reasonably where the cannot expected against amendment; defend this is especially pertinent of, factor the eve dur- ing, or after trial. interrogatories seeking
Gunter submitted infor- eight mation relevant the annual days after its answer. No trial date had been Fyke’s pretrial prepara- set or was even imminent. delayed, put tion was not nor was it to unneces- sary expenditures raising delay Gunter’s defense. general "[a]s rule,
While the risk of substan- prejudice passage time,”9 tial increases with the showing in the of a absence of either bad faith or prejudice, delay actual mere does not warrant Miller, Procedure, Wright p Federal Practice & § *13 649 390 Mich 664 op Opinion Court the "All amend.10 motion to of a denial amendments they are offered later in this in common: have they pleading seek amend.” time than the p (emphasis by 5.2, Procedure, § 158 James, Civil author). VI filing shortly its of answer At about time response to thereafter, from a learned Gunter Department Michigan Treasury inquiry Fyke in default its annual been that had paying Fyke contends that be- fees. knowledge, Gunter should have of this cause its in its initial answer and raised justifies bad faith and so constitutes failure do of the amendment. denial it did then have knowl-
Gunter concedes edge asserts, however, until It the default. interrogatories seeking Fyke to de- answered Fyke and between when the contract termine not, due to the into it did was entered Gunter inadequacy records, in- have sufficient own of its good plead faith the defense. formation to service Gunter attested assertion this eight days interrogatories of its within answer. Pittsburgh Electri Co v In Standard Insurance (WD Pa, Insulation, Inc, 185, 187 29 FRD
cal 1961), saying, allowed an amendment court required pertinently, "should not 10 Corp, Development 392 Co S. M.W. See Middle Atlantic Utilities v County (CA York 2, 1968); of New 380, Public Administrator 384 F2d Fli-Fab, (SD NY, 1963); Curtiss-Wright, Inc v Supp 224 F v United States, (D v Insurance Co RI, 1954); Standard FRD (WD 1961); Pa, Insulation, Inc, Pittsburgh Electrical 29 FRD Miller, Practice, 901; Wright 15.08[4], p & Federal § 3 Moore’s Procedure, 1488, p 438. & § Federal Practice Sons Gunter Co allegations suspicion alone; fact, make upon law frowns frivolous and unsubstantial *14 enough to file was time the claims. claim when It. gained it had. some substantial evidence.” The opposed contending defendant had acting plaintiff bad faith because it knowledge had of the for basis the amendment pleading plaintiff when its initial was filed. The "suspected” possibility admitted that of an explained additional claim but that as it had no process documentary proof, "it needed the of the discovery procedures courts and its to ferret out such evidence”. Refining Phillips,
In Co Ashland Oil & v 404 1966), (Ky, again SW2d 449 the facts were similar plaintiff sought to those here. The to amend the complaint gleaned the basis information interrogatories. from the defendant’s answers to denying court, motion, The trial ascribed no specific Appeals, for reason its action. The Court of reversing, any prejudice noted the absence to large the defendant and attributed a share of the delay blame for the to the defendant’s tardiness answering interrogatories.11 sought August
Gunter leave to amend on 11. Its interrogatories Fyke May to had been served on days. Fyke and answers were due within 15 failed period. respond within that On June 16 Gunter August .4 moved for and on a obtained court order compelling very day, answer. On that the answers were served. 11 accord, Court, Morgan Superior 527; App In see v 172 Cal 2d (1959) (when complaint P2d her for she filed divorce suspected Spicer positive proof adultery); did but not have of defendant’s 1961) (the Co, (ED Pa, Pennsylvania Supp R 196 P defendant, answer, year filing and a half was allowed after its incorporate gained through interrogatories to amend information filed).
three the motion to months before amend was 390 Mich
VII proper proce- that Gunter’s further asserts remedy the desired to obtain information dural regarding was to move for the dates a more in accordance with GCR statement definite failure to so that Gunter’s move is 115.1 and justifies faith and indicium of bad another proposed amendment. court’s disallowance Rule 115.1 allows move a more responsive statement before definite pleading ambiguous "pleading vague opponent’s is so if the comply require- with the that it fails regarding information of the rules.” Other ments adversary’s or defense to be obtained claim through discovery.12 *15 complaint properly
Fyke’s set forth sufficient of "to inform "his cause action” and state facts the adverse party of he of the nature the cause is upon 1963, 111.1. In to defend”. GCR this called context, might judge have
where grant for a more definite a motion refused statement, motion
Gunter’s to make such a failure justify to allow an amendment not a refusal does discovery. through information obtained based on unwisely encourage contrary liti- A rule would gants routinely more state- move for definite discovery. proceeding The re- with ments before sulting proliferation 115 of Rule motions not be constructive.
VIII relying GCR The trial also erred 12 Hawkins, Honigman Michigan Rules Annotated 1 & Court See (2d ed), purpose of concerning function Authors’ Comments 75, App Co, rule, 283-284; Trucking Major 15 Mich pp v Schmidt this 517.(1968). 82; 166 NW2d & Sons v Gunter Co Dissenting Opinion by T. E. Brennan, J. 1963, 111.7 to defeat the 111.3 and amendment. defenses, if even Affirmative asserted in the may by answer, be initial introduced amendment. consequence of a failure to include an affirma- testimony in an answer is that tive defense support "may rejected, be unless the by pleadings cured defect in the (Emphasis supplied.) amendment”.13 align majority We with the ourselves vast holding may that an courts affirmative defense be raised amendment.14 proceedings Reversed and remanded further opinion. appellant. consistent with this Costs to J., T. M. C. and T. G. Kavanagh, Kavanagh, JJ., Swainson, concurred with Williams, Levin, J. (dissenting).
T. E. J. On or about the Brennan, July, employed plaintiff 1969, 28th of defendant earth-moving golf do certain work on a course Comments, Hawkins, Honigman Michigan See Authors’ & (2d ed), p Court Rules Annotated Miller, comparable Procedure, 1278, Wright p Federal & Practice § rule, discussing federal states: "Moreover, even if defendant does not assert an affirmative defense * * * answer, 15(a) may pleading in his he amend his under Rule period 20-day grace during may after the which amendments [even * * * right] filed as of to assert an omitted affirmative defense on the court, written consent the adverse leave of the which ” freely given requires.’ 'shall be 1966) (CA (statute Davison, Groninger 364 F2d *16 limitations); 714, Corp Corp, Emich Motors v General Motors 229 F2d (CA 1956) (statute 7, Leschin, limitations); 716-718 4 of Kraushaar v (ED 1944) (statute 144, Pa, limitations); Systems FRD 145 of Inc (CA 1964) (dictum 465, 3, Bridge Co, Electronics 335 F2d 466 in case duress); misrepresentation, where defense was and fraud economic Co, 30, 33; App Villamor v Premier 13 Mich 163 697 Insurance NW2d (1968) (statute limitations); Lakes, Rumery of Great Inc v Construc (1970) Co, Inc, 501, 506; (suspension App tion 23 Mich 36 of NW2d plaintiff’s powers for failure to file at time contract annual into). Co, Douglas Aircraft entered (CA 1968). Contrast Strauss v F2d 2, Mich Brennan, Opinion Dissenting T. E. J. Michigan. agreement This Memphis, located made, compensation to be with based orally was the use for bulldozer rates and upon hourly operated by plaintiff. the and draglines owned 1969, 1,1, 28, 1969, and October July Between agreed work the the defend- performed plaintiff $21,834. charge of for a total ant paid plaintiff the has for this defendant work. 1971, commenced plaintiff an ac- April
On County. Court for Oakland the Circuit tion defendant, on which filed an Complaint served was the admitting contract May on answer disputing performance, only its indebted to the defendant was in which amount plaintiff. 18, 1971, defendant filed and served on May On eight interrogatories, essen- a series of plaintiff’s seeking particulars on claim. tially oral specific asked for date Defendant description and of all ser- contract, date and the interrogatories These were an- performed. vices 2,1971. August on swered
Thereafter, 11,1971, filed a August on defendant answer, alleging for leave to amend motion "indi- interrogatories answer plaintiff’s should be raised to defendant a defense which cate summary judgment judg- and/or accelerated ment.” court certificate filed in circuit
Defendant May dated Michigan Department Treasury, 5,1971. as follows: It was Come: All To Whom These Presents Shall
"7b Michigan, Green, of the State of Treasurer Allison ’% Certify That Hereby Do SONS, Inc., Michigan corpora- "BEN P. FYKE & 30,1954. tion, incorporated in this State March *17 Sons v Gunter Co Brennan, Opinion by Dissenting T. E. J. corporation reports "The filed all annual paid and up fees connection therewith to and including the report. "I FURTHER CERTIFY that report the 1968 annual fees, 15, 1968, May and May due were received this office report accepted 1968 and the was filing for February report fees, 1969. The May due 15, 1969, January were received and the 18,1970. accepted for March "This in due form certificate is and made me as officer, proper and is entitled to have full faith and given every credit it court and office within the United States. whereof, "In I testimony have hereunto my set hand Department, affixed the Seal City of
Lansing, May, this of day 5th
"(s) Allison Green "State Treasurer.” The circuit refused to allow the amend- ment. Appeals saying, affirmed,
The Court of present possessed "The defendant knowledge accurate corporation was a at the time its answer transcript was filed. The proceedings had on its motion further reveals defendant’s admission that knowledge plaintiff’s either had statutory violation immediately before its answer was filed or thereafter. explanation Defendant no waiting offers meritorious approximately three months to file its motion to amend possessing knowledge. while such A review of the trial judge’s primary basis for decision and an evaluation supplementary his consideration fails to reveal error. discretion, Finding no abuse of we affirm the denial pleadings. motion to amend defendant’s
"Affirmed.” My correctly points Brother out that GCR Levin provides plead- leave to amend 1963, 118.1, ings granted freely should be "when 390 Mich Brennan, Dissenting Opinion by T. E. J. correctly requires”. concludes that as He also *18 general proposition the of the effect amendment case, is, of the that the final outcome on the merits usually to be are of the amendment considered determining "justice by whether the trial granted. requires” be to amend that leave Thus, that an fact amendment the mere provide complete a answer would de- defendant’s fense to the for ground plaintiff’s should not claim be refusing to amend. leave designed every all, is to im- After amending party. prove position the the may But, the the defense be consid- nature evaluating by the lateness trial court ered of the proferred the amendment. present by in the raised defendant
The defense merely procedural advan- a technical case is not by tage permitted the law the overall effort to parties. justice The the statute of statute of do limitations between might so described. be similarly intended advance the cause frauds is contracting parties. as between 338.1516; harsh rule of MCLA MSA Even 18.86(116) prohibiting by unlicensed residen- suit designed afford blanket of tial contractors protection to consumers. permitted capacity
But, the of lack of defense purpose. 450.87; 21.87 no MSA has such MCLA designed accurately forfeiture, a civil It is more filing compliance requirements with the to enforce of the corporation laws. the benefit of that enures to
To the extent here, it is no individuals, such as defendant government bounty, state than a offered more corporate fran- as device to insure collection of chise taxes. in a had raised the
If the defendant permitted it timely fashion, law have Fyke & Sons Gunter Co Dissenting Opinion Bkennan, by T. E. J. unjustly enriched in the $21,834, amount of severely punishing eight thus for its delay pay- month ing the annual May 15, fees due permits although But, forfeitures, law such equity judge ought abhors them. The trial not be required eyes impact to close his exercise of his discretion. Department
Here, the certificate of of Trea- sury days was issued five before the defendant’s alleged fact, answer was In filed. answer defendant was "without sufficient information to identity form a belief as to the the status of Plaintiff.” of Plaintiff or as to argument The thrust of defendant’s that, *19 although plaintiff’s delay its 1969 agree- known, annual the fact that the during period corporate ment was made default was not of the
apparent August 2, 1971, until when interrogatories. filed answers to the defendant’s In view of the fact that the contract between parties by defendant, was admitted it follows that agents fully defendant’s officers and were aware of agreement. agreement date awas matter equally knowledge parties. within the There interrogatories was no need for to determine period whether of the contract was made within the c plaintiff’s corporate default. These were considerations before the upon circuit when called to exercise his discretion to allow the defendant’s belated amend- ment.
I would affirm the courts below. J., M. S. Coleman, concurred with T. E. Bren- nan, J.