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04/28/92 HOWARD UNIVERSITY v. GOOD FOOD SERVICES

April 28, 1992

HOWARD UNIVERSITY, APPELLANT
v.
GOOD FOOD SERVICES, INC., APPELLEE



Appeal from the Superior Court of the District of Columbia; (Hon. Richard A. Levie, Trial Judge)

Before Rogers, Chief Judge, and Ferren and Steadman, Associate Judges.

The opinion of the court was delivered by: Ferren

FERREN, Associate Judge : In a third party complaint, appellant Howard University alleged that appellee Good Food Services (GFS) owed the University indemnification for any liability arising out of a suit against the University for personal injuries filed by a GFS employee who was injured while working as a cook in a University kitchen operated by GFS. The University also alleged that GFS violated its contract with the University by failing to name the University as an additional insured on GFS's insurance policy covering its restaurant operation at the University. The trial court granted GFS's motion for summary judgment on both claims. The University appeals both rulings and also argues on appeal that the trial court abused its discretion by denying the University's motion for leave to amend its third party complaint to add a claim of promissory estoppel. We conclude that the trial court did not abuse its discretion in denying the University's motion to amend, and we affirm the order granting summary judgment on the University's indemnification claim. But we reverse the order granting summary judgment on the contract claim and remand the case for further findings on the preliminary factual question whether the parties' written agreement was completely integrated.

I.

On July 1, 1983, GFS and the University signed a written agreement under which GFS contracted to operate the University's food service facilities and provide meals for students and others authorized to use the University's food services. The agreement makes clear that the University retained ownership of, and ultimate control over and responsibility for, the kitchen facilities and equipment, whereas GFS had day-to-day responsibilities such as keeping the kitchen facilities clean, supervising GFS employees in the kitchens, and implementing University food service policies. The agreement required GFS to submit to the University an insurance certificate indicating that GFS had purchased various types of insurance, including worker's compensation and liability coverage, "in such amounts that are acceptable to the University."

In the 1970s the University began requesting that its food service contractors name the University as an additional insured on their liability insurance policies. In August 1983, the University began an annual practice of making this request in writing. Although that requirement was not a term of the parties' 1983 written agreement, copies of insurance certificates from 1983 until February 1986 show that GFS complied with the University's requests. From February 1986 until November 1988, however, GFS did not comply with those requests; GFS's insurance certificates for that period do not list the University as an additional insured, and the University apparently did not confront GFS about this omission.

On June 26, 1987, the University and GFS entered into a second written agreement substantially identical to their 1983 agreement. The 1987 agreement contained the same insurance provision as the 1983 agreement, and, like that agreement, the 1987 agreement did not include a provision requiring GFS to carry the University as an additional insured.

On June 20, 1988, Ida Tyler, a GFS employee who worked as a cook, was injured in one of the University's kitchens; hot water from a defective steam kettle spilled on her legs after she had bumped into it with a cart. Mrs. Tyler had known that the kettle was defective before she started using it that day, but she had used it anyway because no other kettle was clean at the time. It appears that University officials as well as the president and employees of GFS had been aware of the defective kettle since November 1987, when a Howard University plumber with responsibility for inspecting the kitchen had discovered that the tilt control lever of the kettle was broken. The University had not been able to obtain the necessary parts to repair the kettle and had not removed the kettle from the kitchen by the time of Mrs. Tyler's accident. *fn1

As a result of her on-the-job accident, Mrs. Tyler filed a worker's compensation claim against GFS, whose insurance carrier paid the claim. On September 30, 1988, Mrs. Tyler filed a lawsuit against the University, alleging that her injuries were caused by the University's negligence, including its "failure to inspect and maintain the cafeteria's food preparation equipment, failure to warn, and failure to provide a safe working place for the plaintiff." On October 26, 1989, the University filed a third party complaint against GFS alleging negligence and breach of contract and seeking indemnification for any damages the University had to pay Mrs. Tyler. At a January 5, 1990 scheduling conference, the trial court set a discovery deadline of May 1, 1990, a motions deadline of May 22, 1990, and a pretrial conference for June 19, 1990. As of the time of the scheduling conference, the parties had conducted discovery only to the extent of producing documents and answering interrogatories. On May 8, 1990, the University moved for leave to conduct more than five nonparty depositions. The court granted the motion on May 14.

On May 16, 1990, after the close of discovery but before the motions deadline, the University filed a motion for leave to amend its third party complaint to add a promissory estoppel claim that GFS was liable to the University for any damages the University had to pay Mrs. Tyler because the University had relied to its detriment on GFS's promise to name the University as an additional insured on its liability policy. The trial court denied that motion on June 4, 1990. On May 11, 1990, GFS moved for summary judgment on the University's indemnity and contract claims. The court granted the motion on both claims on January 16, 1991. Meanwhile, on September 13, 1990, the plaintiff's case was called for jury trial. After plaintiff Tyler completed her case-in-chief on September 17, the trial court denied the University's motion for directed verdict. The University completed its defense case on September 18 and renewed its motion for directed verdict, which the court reserved; the court then denied the plaintiff's motion for directed verdict, and the parties made their closing arguments. Before the jury returned its verdict, however, the University settled its case with Mrs. Tyler, and the court dismissed the case with prejudice. The University then filed a timely appeal of the trial court's order of June 4, 1990 denying the University's motion for leave to amend its third party complaint against GFS, and of the court's order of January 16, 1991 granting summary judgment for GFS.

II.

The University argues that the trial court abused its discretion by denying the University's motion to amend its third party complaint to add a promissory estoppel claim based on the University's reliance on GFS's promise to name the University as an additional insured. The grant or denial of a motion to amend is committed to trial court discretion, e.g., Plummer v. Johnson, 35 A.2d 647, 648 (D.C. 1944), and this court's role is to "examine the record and the trial court's determination for those indicia of rationality and fairness that will assure it that the trial court's action was proper." Johnson v. United States, 398 A.2d 354, 362 (D.C. 1979). Undue delay, bad faith or dilatory motive, repeated failure to cure deficiencies by previous amendments, and undue prejudice to the opposing party are all valid grounds for refusing to allow amendment. E.g., Eagle Wine & Liquor Co. v. Silverberg Elec. Co., 402 A.2d 31, 34-35 (D.C. 1979); Gordon v. Raven Systems & Research, Inc., 462 A.2d 10, 13 (D.C. 1983); see also Foman v. Davis, 371 U.S. 178, 182, 9 L. Ed. 2d 222, 83 S. Ct. 227 (1962).

The exercise of the trial court's discretion on a motion to amend a pleading, however, must be informed by Super. Ct. R. 15 (a) which provides: " party may amend the party's pleading only by leave of court . . .; and leave shall be freely given when Justice so requires." Accordingly, "the discretion accorded the trial court in deciding a motion for leave to amend is to be considered together with the prevailing spirit of liberalism in allowing such amendments when Justice will be so served." Eagle Wine & Liquor Co., 402 A.2d at 34. Although the decision is a matter of trial court discretion, there is a "virtual presumption" a court should grant leave to amend unless there is a good reason to the contrary. Bennett v. Fun & Fitness of Silver Hill, 434 A.2d 476, 478 (D.C. 1981) (citing cases). Thus, even lengthy delay, standing alone, is usually not a sufficient reason for the trial court to deny a motion to amend. Eagle Wine, 402 A.2d at 35.

The trial court denied the University's motion after finding that the University had all the necessary facts to state a promissory estoppel claim at the time it filed its third party complaint. In particular, the court noted a November 1988 letter the University had sent to the president of GFS, John Goodwin, in which the University demanded indemnification from GFS after Mrs. Tyler's accident and asserted that GFS had "historically included Howard as an additional insured in its general liability insurance policy." Based on that finding, the court concluded that, in light of the fact that the case was already a year and a half old, there was no justifiable reason to risk further delay, including time for additional discovery, to the prejudice of GFS. The University countered at the time, and argues on appeal, that it could not have alleged facts sufficient to satisfy the reliance element of a promissory estoppel claim until after it had received information from the April 1990 depositions of two witnesses, John Goodwin and Alexander Chalmers (the University official in charge of administering the GFS contract until his retirement in 1989). After reviewing these depositions, we agree with the trial court, as elaborated below, that they did not add anything significant to the University's claim of promissory estoppel, which had been available in October 1989 when the University had filed its complaint against GFS.

In general, to"hold a party liable under the doctrine of promissory estoppel there must be a promise which reasonably leads the promisee to rely on it to his [or her] detriment, with inJustice otherwise not being avoidable." Bender v. Design Store Corp., 404 A.2d 194, 196 (D.C. 1979) (quotations and cites omitted); accord Moss v. Stockard, 580 A.2d 1011, 1034 (D.C. 1990). Under the RESTATEMENT OF CONTRACTS (SECOND) § 90 (1) (1979),

A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if ...


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