Rodriguez Perez v. Hospital Damas, Inc. , 769 F.3d 800 ( 2014 )

United States Court of Appeals
For the First Circuit
No. 13-1810
ALTAMIRA RODRÍGUEZ PÉREZ, ET AL.,
Plaintiffs, Appellants,
v.
HOSPITAL DAMAS, INC., ET AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Carmen C. Cerezo, U.S. District Judge]
Before
Howard, Lipez and Barron,
Circuit Judges.
Manuel San Juan for appellants.
Roberto Ruiz Comas, with whom RC Legal & Litigation Services
PSC was on brief, for appellees.
Freddie Pérez-González, with whom Freddie Pérez-González &
Assoc., P.S.C. was on brief, for Fundación Damas, Inc., intervenor-
appellee.
October 16, 2014
BARRON, Circuit Judge. This appeal asks us to reverse a
denial of a motion to amend a complaint in a medical malpractice
case. We cannot do so, however, because the District Court acted
within its discretion when it decided the plaintiffs had waited too
long before trying to add -- just weeks ahead of the trial's
scheduled start -- a new defendant.
I.
The underlying complaint concerns the medical treatment
Estella Rodríguez Pérez received in 2007 and 2008 at the Damas
Hospital in Ponce, Puerto Rico. The hospital admitted her in
November of 2007 for gastrointestinal distress. The hospital
discharged her seven months later in a persistent vegetative
state.1 In response, Pérez's sister and daughter -- Sonia Hodge
and Alma Sanchez-Rodríguez, respectively -- brought suit in
November of 2008.
The plaintiffs originally filed their complaint in the
Puerto Rico Court of First Instance. They then voluntarily
dismissed their suit and re-filed in federal court in October of
2009. It is that federal complaint -- and, in particular, the
plaintiffs' unsuccessful attempt to amend it -- that gives rise to
this appeal.
The federal complaint named Hospital Damas, Inc., various
hospital employees and staff members, and a number of unnamed
1
She died in May of 2009.
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entities as defendants. One of those unnamed defendants was listed
only as "Corporation ABC." Though the plaintiffs did not then know
the identity of "Corporation ABC," they nonetheless alleged it was,
along with Hospital Damas, Inc., the owner and operator of the
Damas Hospital.
On April 23, 2010, the District Court dismissed the
complaint as to all unnamed defendants, including "Corporation
ABC." The court explained "[t]he term to identify [unnamed]
defendants ha[d] expired." One week later, however, the plaintiffs
successfully filed an amended complaint that again listed the
unnamed "Corporation ABC" as a defendant.
Then, in September of 2010, Hospital Damas, Inc. filed
for Chapter 11 bankruptcy. In doing so, Hospital Damas, Inc.
provided information of potential relevance to the plaintiffs'
identification of "Corporation ABC" in the medical malpractice
case. Specifically, Hospital Damas, Inc. named Fundación Damas,
Inc. both as Hospital Damas, Inc.'s sole co-debtor and as the
lessor for the hospital property.
Although Hospital Damas, Inc. sought to stay the
malpractice case during the pendency of the bankruptcy proceedings,
the Bankruptcy Court allowed the malpractice case to proceed. And
so that suit headed towards trial until, on February 7, 2012 -- six
weeks before the scheduled start of the trial -- the plaintiffs
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filed a motion to amend their complaint to include Fundación Damas,
Inc. as a defendant.
The motion stated the plaintiffs had learned of Fundación
Damas, Inc.'s relationship to the hospital "as a result of" the
disclosures made in Hospital Damas, Inc.'s bankruptcy filings. The
plaintiffs also attached two documents they claimed "confirm that
Fundación Damas, Inc. is indeed the licensed, duly authorized owner
and operator of the Damas Hospital." One was a Puerto Rico
Department of Health license that listed Fundación Damas, Inc. as
the entity authorized to operate the hospital. The other was
entitled "Second Amendment to Deed of Trust" and showed that
Fundación Damas, Inc. had established a self-insurance trust fund
for the hospital.2
Hospital Damas, Inc. argued the District Court should
deny the motion so as not to reward the plaintiffs for their lack
of diligence in identifying "Corporation ABC." Hospital Damas,
Inc. also argued the addition of Fundación Damas, Inc. at such a
late date would unfairly delay the trial. The District Court
2
The plaintiffs later filed a supplemental motion to which
they attached a number of additional supporting documents. One of
these documents, which they obtained from the Puerto Rico
Department of Health, was a "Certificate of Need and Convenience"
and listed Fundación Damas, Inc. as the "owner" of the Damas
Hospital. In their supplemental motion, the plaintiffs argued that
this Certificate showed that the government recognized only
Fundación Damas, Inc., and not Hospital Damas, Inc., as the owner
and operator of the hospital.
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denied the plaintiffs' motion for leave to amend on May 12, 2012,
and this appeal followed.
II.
Our decision turns on Rule 15 of the Federal Rules of
Civil Procedure, which provides that district courts "should freely
give leave [to amend] when justice so requires." Fed. R. Civ. P.
15(a)(2). Ordinarily, the district court is best positioned to
decide whether that standard has been met, which is why we "review
denials of leave to amend under Rule 15 for abuse of discretion,
deferring to the district court for any adequate reason apparent
from the record." Resolution Trust Corp. v. Gold, 30 F.3d 251, 253
(1st Cir. 1994).
Here, the District Court denied the motion because of the
plaintiffs' delay. We have previously explained that "undue delay
in moving to amend, even standing alone, may be . . . an adequate
reason" to deny such a motion. In re Lombardo, 755 F.3d 1, 3 (1st
Cir. 2014) (citing Acosta–Mestre v. Hilton Int'l of P.R., Inc., 156
F.3d 49, 51–52 (1st Cir. 1998)). We thus must decide whether the
District Court acted within its discretion in deciding on this
record that the delay was undue.
As we have said on a number of occasions, "when
'considerable time has elapsed between the filing of the complaint
and the motion to amend, the movant has [at the very least] the
burden of showing some valid reason for his neglect and delay.'"
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Id. (quoting Stepanischen v. Merchs. Despatch Transp. Corp., 722
F.2d 922, 933 (1st Cir. 1983)) (alteration in original). And a
"considerable" amount of time certainly passed here. See id.(discussing cases imposing on the movant the burden to explain
grounds for delay when the delay was fourteen, fifteen, and
seventeen months, respectively). More than two years elapsed
between the filing of the plaintiffs' original complaint and their
motion for leave to amend it. And more than sixteen months passed
after Hospital Damas, Inc. made its September 2010 bankruptcy
filing disclosing the ties between the two entities. The
plaintiffs thus bore the burden of explaining their attempt to add
Fundación Damas, Inc. so late in the case.
The District Court found the plaintiffs' explanation
inadequate. The court doubted "that it was impossible to obtain"
the information about the ties between the two entities before the
plaintiffs finally did. And the court noted the plaintiffs'
initial complaint alleged there might be another corporation --
then named "Corporation ABC" -- that owned and operated the
hospital. The court therefore thought the plaintiffs were "in a
poor position" to argue they could not have named Fundación Damas,
Inc. sooner, especially because their motion for leave to amend
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relied on publicly available documents to show that entity's
connection to Hospital Damas, Inc.3
The plaintiffs respond by, in effect, disputing the
availability of one of those documents -- the Health Department
license. They argue the license shows how important Fundación
Damas, Inc. is to their case. They contend the license establishes
that only Fundación Damas, Inc. had the authority to run the
hospital at the time the malpractice allegedly occurred. They
further argue they could not have responsibly moved to add this
critical defendant until they had actually received the license.
And they tie up their argument by saying they did not get that
license from the Health Department until days before they filed
their motion. Thus, they say, they acted swiftly in moving to
amend the complaint.
But the plaintiffs' explanation is incomplete. Even if
we were to agree that the license's receipt was a necessary
predicate for the plaintiffs' motion, we would still lack an
adequate explanation for why the plaintiffs took so long to get
that document. The plaintiffs do not say when they first requested
the license from the Health Department. They also do not say how
3
The District Court also rejected the plaintiffs' argument
based on the Certificate of Need and Convenience. The court saw no
reason under Puerto Rico law why an owner of a health facility that
had the requisite Certificate could not lease the facility to its
wholly owned subsidiary, which it appeared that Fundación Damas,
Inc. had done.
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long it took the Department to process their request. Nor do they
point to anything in the record that would supply us with that
missing information. Indeed, counsel for the plaintiffs conceded
at oral argument that he was unaware of anything in the record that
would "give us any indication" of the precise timing of the
plaintiffs' request to the Health Department. And, when asked how
long it took the plaintiffs to receive the license after requesting
it from the Health Department, counsel responded only that he
"could not really tell [us] exactly," and that it was a "months-
long" process.4
But without greater clarity about the timing, we cannot
know whether the plaintiffs' failure to pursue the license
diligently best explains their late-in-litigation filing, or
whether some reason beyond their control is instead to blame. And
our concern that the former may be the case is heightened because
the record shows the plaintiffs, by their own account, seem to have
known of Fundación Damas, Inc.'s connection to the hospital more
than a year before they say they first received the license from
the Health Department.
Specifically, the plaintiffs acknowledge they knew in
late 2010 about Hospital Damas, Inc.’s bankruptcy filing, which not
only named Fundación Damas, Inc. as Hospital Damas, Inc.'s sole
4
The plaintiffs similarly failed to explain the precise
timing of their actions in their motions before the District Court.
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co-debtor, but also listed Fundación Damas, Inc. as the lessor for
the hospital property. And even if that filing for some reason did
not suffice to make the plaintiffs aware of those ties, the
plaintiffs do concede they became aware "in early 2011" "of the
details of Hospital Damas, Inc.’s relationship with Fundación
Damas, Inc.," a time that is itself potentially more than a year
before the plaintiffs filed their motion for leave to amend in
February 2012.
Thus, even if we accept that the plaintiffs could not
file their motion until they actually received the license, and
even if, beyond that, we accept that the plaintiffs had no
obligation to pursue the identity of "Corporation ABC" before
Hospital Damas, Inc. filed for bankruptcy,5 the record still leaves
unexplained the reason for a good chunk of the seemingly year-long
delay between the time the plaintiffs say they first learned of the
hospital's potential tie to Fundación Damas, Inc. and the date they
filed their motion to add that defendant to their complaint. In
5
In their supplemental motion, the plaintiffs claimed that,
during discovery, they sent a request to Hospital Damas, Inc. for
"all documents of ownership of Hospital Damas at the time of the
events alleged in the Complaint to the present time," but that
Hospital Damas, Inc. failed to respond to the request. Hospital
Damas, Inc., however, claimed in its opposition that they never
received such a discovery request. We need not resolve this issue,
though. Whether or not the plaintiffs made that discovery request,
we hold that the District Court did not abuse its discretion in
denying leave to amend because of the plaintiffs' inadequate
explanation of their delay in obtaining the license until right
before trial.
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light of our obligation to affirm the District Court's exercise of
discretion "for any adequate reason apparent from the record,"
Resolution Trust Corp., 30 F.3d at 253, and given the length of
unexplained delay involved, we cannot say the District Court abused
its discretion in concluding the plaintiffs failed to act with
sufficient speed in seeking to add the new defendant. See
Calderón-Serra v. Wilmington Trust Co., 715 F.3d 14, 19-20 (1st
Cir. 2013) (affirming denial of motion for leave to amend in light
of eleven-month delay); Villanueva v. United States, 662 F.3d 124,
127 (1st Cir. 2011) (per curiam) (affirming finding of undue delay
when only four months had elapsed before motion was filed); Kay v.
N.H. Democratic Party, 821 F.2d 31, 34 (1st Cir. 1987) (per curiam)
(delay of less than three months constituted undue delay).
Accordingly, the District Court's denial of the plaintiffs' motion
for leave to amend the complaint to add the new defendant is
AFFIRMED.6
6
During the course of this appeal, we provisionally granted
Fundación Damas, Inc. leave to intervene. Because we affirm the
District Court without relying on any argument contained in
Fundación Damas, Inc.'s brief, we deny the motion to intervene.
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