Motion for leave to amend an adversary complaint
This blog post will briefly discuss the issues involved for a party that wants to file a motion for leave to amend an adversary complaint in United States Bankruptcy Court. Note that as the author is located in California, the cases cited below are from the Ninth Circuit Court of Appeals, and a reader who is located in a state that is located in another circuit should research the cases for their particular circuit.
Federal Rules of Bankruptcy Procedure 7015 and 7016 expressly provide that Rules 15 and 16 respectively, of the Federal Rules of Civil Procedure apply in bankruptcy proceedings.
Rule 15 of the Federal Rules of Civil Procedure (“FRCP”) states in pertinent part that,
“A party may amend its pleading once as a matter of course within:
(A) 21 days after serving it, or
(B) if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier.
(2) Other Amendments. In all other cases, a party may amend its pleading only with the opposing party’s written consent or the court’s leave. The court should freely give leave when justice so requires.”
And the claims in the first amended adversary complaint relate back to the original complaint if they assert claims arising out of the conduct, transactions and occurrences that were set out, or attempted to be set out in the original complaint. See FRCP Rule 15[c](1)(B).
Under Rule 15(a), leave to amend should be granted as a matter of course, at least until the defendant files a responsive pleading. After that point, leave to amend should be granted unless amendment would cause prejudice to the opposing party, is sought in bad faith, is futile, or creates undue delay. Johnson v. Mammoth Recreations, 975 F.2d 604, 607 (9th Cir. 1992).
However, the situation changes once the Court has issued a pre-trial scheduling order. Once a pre-trial scheduling order has been issued the Court must look to the pre-trial scheduling order to determine what standards to apply to any motion to amend. Johnson, supra at 608. If no pre-trial scheduling order has been issued which makes any mention of any timetable for amending pleadings then a very good argument can be made that the more liberal standards of Rule 15 should apply.
Rule 15′s policy favoring amendments is applied liberally by us. Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989). Note that the Court in Ascon at 1160 also stated that leave to amend could be denied where plaintiff has previously amended their complaint. Thus it is imperative that a party seeking leave to amend their original complaint ensure that their amended complaint does in fact state a claim.
The author of this article, Stan Burman, is a freelance paralegal with over 15 years of experience in civil litigation in California and Federal Courts. Mr. Burman may be contacted by e-mail at DivParalgl@yahoo.com for more information.
