Opinion
ORDER GRANTING PLAINTIFF'S MOTION TO AMEND THE COMPLAINT
HOWARD R. LLOYD, Magistrate Judge.
On July 27, 2004, this court heard the motion to amend the complaint filed by plaintiff Kwi C. Butler ("plaintiff"). Defendant Aaron Medical Industries, Inc. ("defendant" or "Aaron") opposed the motion. Having considered the papers filed by the parties, as well as the arguments of counsel, the court grants the motion.
I. BACKGROUND
On January 17, 2003, plaintiff filed this products liability suit in Monterey Superior Court, seeking damages for personal injuries sustained in May 2002 during cosmetic eye surgery at Travis Air Force Base. She alleges that defendant's failure to give adequate warnings and instructions as to its disposable cautery resulted in the ignition of surgical draping around her face during the procedure, causing first and second degree burns to her face. Defendant removed the matter to this court on the basis of diversity jurisdiction.
Plaintiff now moves for leave to amend the complaint to add a claim for fraud by concealment. She claims that documents and testimony produced by defendant in March 2004 indicates that Aaron (1) revised its warning in August 2001 at the suggestion of the U.S. Food and Drug Administration; (2) was aware that cauteries with the old warning were being used, including by the Travis Air Force Base; but (3) took no action to provide the military hospitals with the revised warning. Defendant contends that the amendment will be futile because plaintiff cannot state a claim for fraud by concealment. It further argues that the motion should be denied in any event because the requested amendment is being sought in bad faith and will cause undue delay and prejudice.
II. LEGAL STANDARD
Rule 15(a) of the Federal Rules of Civil Procedure governs motions for leave to amend and provides that "leave shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). The decision whether to grant leave to amend under Rule 15(a) is committed to the sound discretion of the trial court. See Waits v. Weller , 653 F.2d 1288, 1290 (9th Cir. 1981). Leave need not be granted, however, where the amendment would cause the opposing party undue prejudice, is sought in bad faith, constitutes an exercise in futility, or creates undue delay. Foman v. Davis , 371 U.S. 178, 182 (1962). "Absent prejudice, or a strong showing of any of the remaining Foman factors, there exists a presumption under Rule 15(a) in favor of granting leave to amend." Eminence Capital LLC v. Aspeon, Inc. , 316 F.3d 1048, 1052 (9th Cir. 2003).
III. DISCUSSION
A. Futility
Defendant argues that the amendment will be futile because plaintiff cannot state a claim for relief. In order to establish a claim for fraud by concealment, a plaintiff must show that (1) the defendant concealed or suppressed a material fact, (2) the defendant had a duty to disclose the fact to the plaintiff, (3) the defendant intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as she did if she had known of the concealed or suppressed fact, and (5) the plaintiff suffered damage as a result of the concealment or suppression of the fact. Lovejoy v. AT&T Corp. , 92 Cal.App.4th 85, 96 (2001) (citing Marketing West, Inc. v. Sanyo Fisher (USA) Corp. , 6 Cal.App.4th 603, 612-13 (1992)).
In this case, plaintiff's proposed amended complaint alleges that:
• Defendants had a duty to disclose to plaintiff and her physicians the "true facts" that the AA03 "was dangerous, defective and contained insufficient and inadequate warnings regarding the potential hazards of its use and how it was likely to cause serious injuries";
• Defendants "made representations to the general public, the medical community and plaintiff's physicians" that the AA03 was "safe for use in surgical procedures and ophthalmologic procedures, including the procedure performed on plaintiff";
• Defendants made these representations at a time when it knew or should have known that the AA03 was "extremely dangerous and unsafe for use by the medical community during such procedures" and that its warning was "vague, ambiguous and inadequate";
• Defendants "intentionally, willfully and maliciously concealed or suppressed" these facts "from plaintiff's physicians, and therefore from plaintiff, with the intent to defraud";
• Plaintiff's physicians reasonably relied on such representations;
• Plaintiff and her physicians were unaware of the true facts, and would not have acted as they if they had been aware of the true facts; and
• As a result of the concealment and suppression of facts, plaintiff suffered severe injuries.
(Proposed Amended Complaint, ¶¶ 25-36).
Defendant argues, in effect, that plaintiff should not be permitted to plead a claim for fraud by concealment because she will never be able to prove it. Here, it contends that it had no duty to warn because the evidence shows that the risk of fire was already well known to the medical community and to plaintiff's surgeon and that plaintiff's surgeon admitted that he would not have changed his conduct. Plaintiff disputes that contention. Each side will have an opportunity to present its arguments as to the evidence. Whether plaintiff will succeed in proving her claim remains to be seen. On the present motion, however, the only issue is whether plaintiff should be permitted to plead a claim for relief. The court concludes that she has alleged sufficient facts to state a claim for fraud by concealment.
B. Undue Delay, Bad Faith and Prejudice
Defendant argues that plaintiff has unduly delayed in seeking the amendment because she has had the information that she asserts as the basis for the amendment for four months. It further contends that plaintiff has acted in bad faith because she (1) mischaracterizes the evidence, and (2) filed the present motion in response to Aaron's summary judgment motion in an attempt to avoid inevitable dismissal of her case. Finally, defendant asserts that prejudice will result because (1) it will need to spend more time and resources developing a new defense and (2) trial will need to be continued for a second time.
Plaintiff previously requested a continuance when it became apparent that the original May 3, 2004 trial date in this action would conflict with the trial of another matter being handled by plaintiff's counsel before the District Court. This court subsequently approved the parties' stipulation that trial in the instant action be continued to August 9, 2004.
Plaintiff says that she learned of the pertinent facts in March 2004 only after this court granted her motion to compel discovery on March 9, 2004. Pursuant to that order, defendant produced further documents, and plaintiff deposed Aaron's President, Jon Saron. Although the present motion was not filed until after the close of discovery, in these circumstances, the court cannot conclude that plaintiff unduly delayed in seeking the amendment.
Nor does the court find that the amendment is being sought in bad faith. The court has considered and denied defendant's motion for summary judgment. Defendant does not agree with plaintiff's characterization of the evidence, but the court is not persuaded that the present motion should be denied on that basis. As noted above, each side will have an opportunity to present their arguments as to the evidence at trial.
Defendant argues that it will be prejudiced if it is not given additional time to prepare supplemental expert reports addressing the alleged fraudulent concealment. At the same time, however, it contends that it will be prejudiced if the amendment is allowed and trial is continued. The court is unpersuaded by this latter argument, and concludes that any prejudice to defendant's ability to adequately prepare a defense is curable. Although plaintiff contends that further discovery and a trial continuance are not necessary, she does not object to a brief continuance to allow for preparation of possible supplemental expert reports and expert depositions.
Neither party contends that additional fact discovery will be necessary.
IV. ORDER
1. Based on the foregoing, plaintiff's motion to amend the complaint is GRANTED. Plaintiff shall file and serve her amended complaint forthwith. Defendant shall file its answer within ten days after service of the amended pleading.
2. No later than September 17, 2004, the parties shall have completed (1) submission of supplemental expert reports (if any) by defendant; (2) submission of supplemental expert reports (if any) by plaintiff; and (3) supplemental expert depositions (if any).
3. The August 3, 2004 pretrial conference is continued to October 5, 2004, 10:00 a.m.
4. The trial is continued to October 12, 2004.