Tennessee Court of Appeals Gives Guidance on Motions to Amend and Motions to Intervene

Do you need to file (or oppose) a motion to amend or a motion to intervene in Tennessee state court?  If so, start your research with this new case from the Eastern Section of the Tennessee Court of Appeals.

The appeal arises from the sale of residential real estate.   Plaintiff alleged fraud and negligent misrepresentation by the defendants for failing to disclose water drainage issues, water damage and basement flooding in the Tennessee Residential Disclosure form.  During discovery, the defendants moved for summary judgment claiming the plaintiff lacked standing to pursue the case.  Plaintiff opposed the motion and moved to amend her complaint.  In addition, the plaintiff’s sons moved to intervene.  The trial court denied the motion to amend and the motion to intervene and granted the defendants’ motion for summary judgment.   The court based the ruling on the plaintiff’s lack of standing.  The court also concluded the intervention would not correct the standing issue since the sons were not parties to the contract for the sale of the property.

Below are the key facts:

  • The contract dictated the warranty deed be made in the name of Earlene Singleton Gregory.
  • In plaintiff’s deposition, she testified she knew her sons’ names were on the deed but that she was also an owner of the property.
  • The deed was actually only in the name of the plaintiff’s three sons.
  • After defendants filed their motion, plaintiff submitted an affidavit stating the property was supposed to have been conveyed to her for the remainder of her life with the remainder been split equally between her sons.
  • Plaintiff’s sons all submitted similar documents regarding the intention of the parties at the time of the conveyance.

On the motion to amend issue, the Court of Appeals reviewed Tenn. R. Civ. P. 15.01 and the case law interpreting it.   As a starting point, the court noted the rule itself indicates “leave [to amend] shall be freely given when justice so requires” and a trial court’s discretion is tempered by this language.  While the rule should be construed liberally, the Court of Appeals noted six factors that militate against allowing an amendment:  (1) undue delay in seeking to amend; (2) repeated failures by the moving party to cure deficiencies in earlier amendments (3) lack of notice to the opposing party; (4) futility of the amendment; (5) bad faith or dilatory motive of the moving party; (6) undue prejudice to the opposing party (which the Court of Appeals found to be the most important of all the factors) If the trial court denies a motion to amend, a “reasoned explanation” must be given.

In this case, the trial court’s order suggested the basis for the denial was undue delay in that plaintiff waited to file her motion until one year after her deposition (when the issue was first suggested) and two months after the motion summary judgment was filed. The Court of Appeals found the plaintiff’s deposition testimony inconclusive on the issue of ownership and noted other documents supported the plaintiff’s belief that she was the owner of the property.   Moreover, the plaintiff moved to amend within 2 months of the defendant’s motion for summary judgment, which the Court of Appeals considered timely.

The only other factor discussed was undue prejudice, and the Court of Appeals quickly dismissed any notion that simply being forced to defend the claim could constitute the level of prejudice necessary to deny the motion to amend.  In conclusion on the issue, the Court of Appeals cited a litany of cases standing for the proposition that cases should be decided on their merits rather than technicalities.

As for the motion to intervene, the Court of Appeals concluded the sons should have been allowed to intervene under Tenn. R. Civ. P 24 because as owners of the property they clearly had an interest in the subject matter of the suit and they had not unnecessarily delayed in filing their motion to intervene.  

In short, the Court of Appeals concluded both the motion to amend and the motion to intervene should have been granted as it put the proper parties before the court and allowed the case to be decided on the merits.   

The case is Gregory v. Melhorn, No. E2012-02417-COA-R3-CV  ( Tenn. Ct. App. Dec. 27, 2013).