JR Tobacco v Burlington Outlet Mall, (03-1002) 05/04/2004

Appeal by defendants from an order entered 28 April 2003 by Judge Donald W. Stephens in Alamance County Superior Court. Heard in the Court of Appeals 19 April 2004.

Daughtry, Woodard, Lawrence & Starling, L.L.P., by Luther D. Starling; Maupin Taylor, P.A., by Elizabeth D. Scott and Keith P. Anthony, for plaintiffs and third-party defendant.

Vernon, Vernon, Wooten, Brown, Andrews & Garrett, P.A., by E. Lawson Brown, Jr. and Benjamin D. Overby, for defendants and third-party plaintiffs.

HUNTER, Judge.

    In December of 1997, J.R. Tobacco of America, Inc. and J.R. Tobacco of Burlington, Inc. (“plaintiffs”) entered into an “Agreement of Sale” and an “Easement Agreement” with Burlington Outlet Mall Joint Venture, LLP, the Cordish Company and HeritageProperties (“defendants”) to purchase a shopping center located on forty acres in Burlington, North Carolina. On 24 January 2001, plaintiffs filed a complaint for injunctive relief restraining defendants from breaching the Easement Agreement. Plaintiffs subsequently filed an amended complaint seeking compensatory and treble damages against defendants for breach of contract, fraud in the inducement and unfair and deceptive trade practices. Defendants answered on 8 March 2002 and denied the material allegations.
    On 1 October 2002, defendants filed a motion for leave to file an amendment to its answer by adding a counterclaim and third-party complaint. The “Amended Answer, Counterclaim, and Third-Party Compliant” alleged that plaintiffs' agent, Maureen Colleton (“Colleton”), had orally promised defendants access across plaintiffs' property and, therefore, plaintiffs and their agent, Colleton, had committed fraud, breach of contract, easement by estoppel and unfair and deceptive trade practices. In December 2002, plaintiffs and third-party defendant Colleton replied to the counterclaims, denying the allegations and asserting defenses. After several continuances, the parties were notified in a 14 February 2003 letter by the trial court that the case was to be tried on 23 June 2003.
    On 26 March 2003, defendants filed another motion for leave to file an amended answer and counterclaim. Defendants alleged that third-party defendant Colleton had orally promised to waive a 100,000 square foot retail restriction on the property and thatthey relied upon the promise in entering into the contract with plaintiffs. Defendants alleged that plaintiffs' failure to subsequently waive the restriction also supported its fraud and breach of contract claims. The next month, plaintiffs and third- party defendant Colleton moved for summary judgment on defendants' counterclaims and third-party claims and plaintiffs' breach of contract claim against defendants.
    The trial court conducted a hearing on defendants' second motion to amend and entered an order denying the motion on the grounds of undue delay and prejudice to plaintiffs and third-party defendant. The trial court subsequently entered partial judgment in favor of plaintiffs and third-party defendant on defendants' counterclaims and third-party claims. Defendants appeal from the order denying their motion to amend.
    Defendants contend the trial court erred in denying their second motion to amend their answer and counterclaim. We disagree.
    Amendments to pleadings are governed by N.C. Gen. Stat. § 1A-1, Rule 15(a) (2003) which provides that a pleading may be amended after a responsive pleading has been filed “only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires.”
    A motion to amend is left to the sound discretion of the trial court, and a denial of such motion is reviewable only upon a clear showing of abuse of discretion. Walker v. Sloan, 137 N.C. App. 387, 402, 529 S.E.2d 236, 247 (2000). The trial court's ruling “is to be accorded great deference and will be upset only upon ashowing that it was so arbitrary that it could not have been the result of a reasoned decision.” White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985).
    In its order, the trial court articulated clear reasons for denying defendants' motion to amend its answer:
        the facts sought to be alleged by amendment have been available to Defendants at all times during this litigation, that Defendants have failed to state any good cause for their failure to allege these facts prior to their motion to amend, that this case is calendared for trial on 23 June 2003 and will not be continued for further discovery, that Defendants unduly delayed in moving to amend, that amendment at this time would unduly prejudice Plaintiffs and Third-Party Defendant[.]

Defendants concede that the denial of its motion to amend was within the discretion of the trial court since they had no right to amend their answer as a matter of course and plaintiffs did not consent to the amendment.
    Upon careful consideration, we conclude that the trial court did not abuse its discretion by denying defendants' motion to amend its answer to allege additional factual allegations to support its fraud and breach of contract claims. Here, defendants filed their second motion to amend over two years after plaintiffs instituted this suit, a year after defendants initially answered the complaint, seven months after their first amended answer and ninety days before the trial. Defendants claim that their counsel did not uncover the fact that third-party defendant Colleton made an oral promise to waive the retail restriction until preparing for depositions taken in March of 2003. However, defendants alleged intheir proposed amended answer that they relied on this oral promise to enter into the multi-million dollar contract in December of 1997, five years before the depositions were taken. Thus, as the trial court found, the information regarding the oral promise to waive the retail restriction was available to defendants throughout the litigation. Furthermore, given the amount of discovery that had taken place and the potential that the burden of proof would have shifted to the plaintiffs, we agree that undue prejudice would have resulted with a new factual theory. Thus, having carefully reviewed defendants' contentions under the circumstances presented, we find no abuse of discretion by the trial court in denying defendants' motion to amend its answer and counterclaim.
    Affirmed.
    Judges WYNN and McCULLOUGH concur.
    Report per Rule 30(e).

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