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Case: Beeck v Aquaslide 'N' Dive Corp.

Procedural History: on appeal from the trial court's exercise of discretion on

procedural matters in a diversity personal injury action

Facts: Beeck gets injured on a waterslide, and sues the manufacturer, Aquaslide
on product liability claims. Aquaslide's insurance company does an investigation
and say that they were manufactured by Aquaslide. After the lawsuit is filed,
Aquaslide answers, and in it they admit that they are the manufacturer of the
slide. On the basis of the insurance company telling Aquaslide that it was
theirs, they say so in discovery. The President of the company later goes to look
at the slide and realizes that its not their slide, but the statute of
limitations has run out. Aquaslide wants to amend their answer to change their
response as to whether it was really their slide, but they're out of the 20-day
window, so they have to throw themselves on the mercy of the court.

Issue: Can Aquaslide still amend their answer to the complaint after the statute
of limitations has run out?

Holding: Court issued new trial to decide if slide was manufactured by Aquaslide.
Found that it was not.

Reasoning: In Foman v Davis, court says - Leave to amend will be freely given
in the absence of any reason that leave shouldn’t be granted; courts mustn't allow
delay, bad faith, or prejudice. Aquaslide did not act in bad faith because their
answer and interrogatory responses were based on the insurance company, and it
should have been safe to assume their investigation would be accurate. The court
says that "blame should be shared equally" - the plaintiffs could have made this
discovery in the course of their own investigation… but then again, if the
insurance company couldn’t tell, how could the plaintiffs? The plaintiffs didn’t
really do anything wrong, but theirs a good reason to grant leave to amend. The
plaintiffs says that there is prejudice though, because the statute of limitations
has run out - the plainitffs cannot now sue the true manufacturer for personal
injury. But the court says the plaintiff might have causes of action that can get
around the statute of limitations, so the prejudice isnt as great as the plaintiff

Rule 15: Amended and Supplemental Pleadings
(a) Amendments.
A party may amend the party's pleading once as a matter of course at any time
before a responsive pleading is served or, if the pleading is one to which no
responsive pleading is permitted and the action has not been placed upon the trial
calendar, the party may so amend it at any time within 20 days after it is served.
Otherwise a party may amend the party's pleading only by leave of court or by
written consent of the adverse party; and leave shall be freely given when justice
so requires. A party shall plead in response to an amended pleading within the
time remaining for response to the original pleading or within 10 days after
service of the amended pleading, whichever period may be the longer, unless the
court otherwise orders.

Beeck later sued Aquaslide on fraud - they reasonably relied on a false statement
of fact causing Beeck damages. (app 307) Found that Aquaslide knew or should have
known that other companies were copying Aquaslide's designs. They’ve had other
lawsuits based on copied slides. President didn’t look at the slide until right
before trial. If we had known this before this raises a Rule 11 problem. What is
reasonable under the circumstances. It would have been reasonable, under the
circumstances, for the President to check the slide better before answering the
complaint. He failed to make a reasonable inquiry before filing the answer, which
kept plaintiff from suing the right party (and then barring them from doing so
because of the statute of limitations). Court may have denied his amendment, if
they had this information.