Knutkowski v. Cross
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Plaintiff, individually and as personal representative of the estate of George D. Knutkowski, asserted claims against defendant, the decedent's widow, for, among other things, failing to repay two loans that decedent made to defendant. Defendant filed an answer denying that she had failed to repay any loans but did not raise any other defenses to the loan claims. Defendant subsequently moved to amend her answer to add the statue of limitations, laches, and waiver as affirmative defenses to the loan claims. The Master in Chancery granted that motion in a Final Report and plaintiff filed exceptions to the Final Report. The court held that the Master correctly exercised his discretion in allowing the amendment. Therefore, plaintiff's exceptions to that decision were denied. Plaintiff's exception to the Master's decision not to award him the attorney's fees and costs he incurred in opposing the amendment was also denied.
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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE GEORGE D. KNUTKOWSKI, II, individually and GEORGE D. KNUTKOWSKI, II, as personal representative of the ESTATE OF GEORGE D. KNUTKOWSKI, Plaintiffs, v. NONNIE CROSS, a/k/a NONNIE KNUTKOWSKI, a/k/a CHONGHAN KIM, Defendant. : : : : : : : : : : : : : : : C.A. No. 4889-VCG MEMORANDUM OPINION Date Submitted: September 27, 2011 Date Decided: December 22, 2011 Kashif I. Chowdhry, Esquire of Parkowski, Guerke & Swayze P.A., Dover, Delaware, Attorney for Plaintiffs. Michael G. Rushe, Esquire of Hudson, Jones, Jaywork & Fisher, LLC, Dover, Delaware, Attorney for Defendant. NOBLE, Vice Chancellor I. INTRODUCTION This case involves the estate of George D. Knutkowski Plaintiff George D. Knutkowski, II is the decedent is the decedent . . Defendant Nonnie Cross widow. The plaintiff, individually and as personal representative of the Estate, has asserted claims against the defendant for, among other things, failing to repay two loans that the decedent made to the defendant . In her answer, filed on October 9, 2009, the defendant denied that she had failed to repay any loans,1 but did not raise any other defenses to the Loan Claims. On August 27, 2010, the defendant moved to amend her answer (the to add the statute of limitations, laches, and waiver as affirmative defenses to the Loan Claims. The Master in Chancery granted that motion in a ) issued on June 2, 2011. The plaintiff has filed s decision on those exceptions. II. CONTENTIONS The plaintiff takes exception to Amendment. granting the The plaintiff argues that the defendant waived any statute of limitations, laches, waiver, or other time bar defense when the defendant purposefully chose not to raise any of those defenses in her answer. The plaintiff 1 See id. 1 also highlights that the parties engaged in at least eight months of litigation activities after the defendant filed her original answer. The plaintiff argues that, in light of that extensive litigation activity, it would be unfair and inequitable to allow the defendant now to change the scope of the litigation. Although the Master the Master explained extra litigation burden caused, not by the defenses themselves, but by the delay in 2 Thus, the Master determined: at the conclusion of this litigation, I will allow the plaintiff to demonstrate the reasonable amount of expenditures he incurred, representing the difference between what this litigation cost and what it would have cost if the defenses had been raised in the answer (and excluding the cost of litigating the . . . [Amendment]). That amount shall be entered as a court cost against the defendant, and on behalf of the plaintiff.3 T fees and costs he incurred in opposing the Amendment. The defendant responds that the plaintiff will not suffer any demonstrable prejudice if the defendant amends her answer. The defendant also argues that she is not seeking to raise additional defenses on the eve of trial or at the time of a case dispositive motion and, therefore, that leave to amend should be freely granted under Court of Chancery Rule 15. Finally, in 2 3 Final Report at 8-9 (citation omitted). Id. at 9. 2 to for which the plaintiff will have to bear his own c 4 III. ANALYSIS This Court reviews a Master's Report de novo as to both findings of fact and conclusions of law. 5 Court of Chancery Rule 8(c) provides that pleading, a party shall set forth affirmatively . . . laches . . . , statute of limitations, waiver, fact, to a claim for relief in any pleading . . . shall be asserted in the responsive Our Supreme Court has determined that Superior Court Rules 8(c) and 12(b), which are analogous to Court of Chancery require a defendant to raise the defense of limitations either 6 That determination, however, does not necessarily address when a defendant may amend a responsive pleading to add affirmative defenses that were originally omitted. Court of Chancery Rule 15(a), which specifically addresses amendments, 4 Id. at 7 (citation omitted). Brown v. Wiltbank, 2011 WL 5027057, at *5 (Del. Ch. Oct. 13, 2011) (citing DiGiacobbe v. Sestak, 743 A.2d 180, 184 (Del. 1999)). See Ct. Ch. R. 144. 6 Gadow v. Parker, 865 A.2d 515, 516 (Del. 2005). 5 3 hen justice so oth our Supreme Court and our Superior Court have suggested that, at least in certain circumstances, a defendant may amend her answer to add affirmative defenses, which were not originally pled.7 Thus, taken together, Rules 8(c), 12(b), and 15(a) suggest that a defendant is required to plead affirmative defenses in her answer, but that, if the defendant fails to do so, the Court has discretion to allow the defendant to amend her answer. Many Federal Courts have come to a similar conclusion in interpreting Federal Rules of Civil Procedure 8(c) and 15(a),8 which are very similar to Court 7 See Abdi v. NVR, Inc., 945 A.2d 1167, 2008 WL 787564, at *2 (Del. Mar. 25, 2008) (TABLE) ( to amend its answer [to add a statute of limitations defense] was filed on December 1, 2005-within the deadline prescribed by the Superior Court's Scheduling Order for filing motions to amend or supplement pleadings. Nothing in the record indicates that the omitted); James v. Glazer exception to the general rule, that affirmative defenses are waived if not pled, has been recognized when evidence of an Kaplan v. Jackson, 1994 WL 45429, defense, he or she waives that defense. . . . However, Delaware courts have recognized an exception to this general rule where evidence of an unpled affirmative defense is admitted 8 See, e.g., Anthony v. City of New York, 339 F.3d 129, 138 n.5 (2d Cir. 2003) affirmative defenses like qualified immunity must be pleaded in response to a pleading, see Fed. R. Civ. P. 8(c), the district court may, in its discretion, construe a motion for summary judgment as a motion pursuant to Fed. R. Civ. P. 15(a) for leave to amend the defendant's answer. . . . Because there was no showing of bad faith or undue prejudice, the district court did not abuse its discretion in construing defendants' motion for summary judgment as a motion to amend their answer to assert a qualified immunity defense. The defense of qualified immunity therefore was Jackson v. Rockford Hous. Auth., 213 F.3d 389, 392-93 to plead a statute of limitations defense and any other affirmative defense in its answer to the complaint. See FED. R. CIV. P. 8(c). On the other hand, the district court has the discretion to allow an answer to be amended to assert an affirmative defense not raised initially. See FED. R. CIV. P. 15(a). 4 of Chancery Rules 8(c) and 15(a).9 The general rule in the Federal Courts is that a defendant is allowed to amend her answer to add affirmative defenses as long as the amendment does not unduly surprise or prejudice the plaintiff.10 That is the rule that should be applied in this Court as well. The plaintiff cannot tenably claim that he was unduly surprised by the Amendment because the basis for the Loan Claims is two dated promissory notes, mplaint. The existence of time bar defenses was apparent from documents that the plaintiff filed. Moreover, although the plaintiff claims to have been prejudiced by the Amendment, any s is not a situation where the matter is on the eve of trial or in the midst of case-dispositive Rule See id. As a rule, we have allowed defendants to amend when the plaintiff had adequate notice that a statute of limitations defense was available, and had an adequate opportunity to respond to it despite the defendant omitted); Manson v. City of Chicago, 795 F. Supp. 2d 763, 769-70 (N.D. Ill. 2011) ( requires that affirmative defenses be raised in a defendant's answer, Rule 15(a) instructs that courts should amend fulfilled so long as a plaintiff receives notice of ) (citation omitted). 9 Federal Rule of Civil Procedure 8(c) provides Federal Rule of Civil Procedure 15(a)(2) 10 See, e.g., Jackson, surprise or prejudice to the plaintiff is Brinkley v. Harbour Recreation Club, 180 F.3d 598, 612-13 (4th Cir. 1999)); Brinkley, 180 F.3d e defense in the appropriate pleading results in waiver, . . . there is ample authority in this Circuit for the proposition that absent unfair surprise or prejudice to the plaintiff, a defendant's affirmative defense is not waived when it is first raised in a pre-trial dispositive motion. . . . This view is in accord with the vast majority of our cases). 5 11 motions, nor does a discovery cut- Although Rules 8(c) and 12(b) required the defendant to plead any affirmative defenses in her answer, the Court, owing the Amendment Moving to the him fees and costs, the Master correctly recognized oppose the motion was a tactical decision, for which the plaintiff will have to bear 12 The plaintiff correctly points out that the defendant failed to include certain affirmative defenses in her answer. But from that fact, the plaintiff seems to suggest that any attempt by the defendant to amend her answer is somehow problematic and, therefore, that the plaintiff is almost required to oppose the Amendment. That is not true. The defendant took the perfectly permissible action, under Rule 15(a), of seeking leave to amend her answer. The plaintiff then s request. That also was a perfectly permissible action. But, it was, as the Master explained, . Therefore, the fees and costs he incurred in opposing the Amendment is denied. 11 12 Final Report at 8. Id. at 7. 6 IV. CONCLUSION denied. An implementing order will be entered. 7
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