Don't Bet the Business

Attorneys learn in the first year of law school that in Michigan “leave to amend pleadings should be freely given when justice so requires.” MCR 2.118(A)(2). 

We also know that leave to amend can, and should, be denied when there is a showing of undue delay, bad faith or dilatory motive on the part of the moving party, when there has been repeated failure to cure deficiencies by amendment previously allowed, when the amendment will result in undue prejudice to the opposing party, or when the amendment would be futile.

When leave to amend is granted, Michigan law also provides that the amendment, in certain circumstances, will relate back to the date of the original filing.  A close reading of the applicable rule governing the relation back of a new claim or defense can actually make or break your case.  Here’s how.

The relation back doctrine appears in MCR 2.118(D) and states that an amendment adding “a claim or a defense” will relate back to the date of the original filing if the new claim or defense arises out of the “conduct, transaction, or occurrence set forth, or attempted to be set forth, in the original pleading.”  What this means is that new claims or defenses that are unrelated to the facts underlying the original claims or defenses as pled may not relate back to the original pleading date.  So why is that important, you ask?

It’s important if your new claim is time-barred when you file your amendment but would have been timely when the complaint was originally filed.  Put another way, if your new claim relates to the original “conduct, transaction, or occurrence” pled in the original complaint your time-barred claim is essentially resurrected because it will be treated as if it was filed when the case was first brought.  If, however, your new claims are unrelated to the “conduct, transaction, or occurrence” as originally pled or attempted to be pled, you may be out of luck.

Moreover, it is important to realize that the relation back doctrine in MCR 2.118(D) only applies to new claims and defenses.  That rule does not extend to the addition of new parties. 

Accordingly, if when bringing a new claim you also seek to add a new party, your new claim may proceed against existing parties if the claim arises out of the “conduct, transaction, or occurrence” as originally pled or attempted to be pled. However, your new claim could be time-barred as to any new party since your filing date as to the new party will be deemed the date of the amendment and not when the original complaint was filed.

In short, your attempt to amend may proceed as to your new claim but your attempt to add a new party could well be untimely and deemed futile.This exclusionary rule does not apply when the requested amendment would do no more than correct a misnomer of an existing party, unless of course the amendment actually effects an entire change of parties.   

This rule is just one example of why a thorough investigation is essential before a lawsuit is filed, particularly when there is concern over the applicable statute of limitations.