                                                                      FILED
                                                                 May 31 2016, 8:27 am

                                                                      CLERK
                                                                  Indiana Supreme Court
                                                                     Court of Appeals
                                                                       and Tax Court




      ATTORNEY FOR APPELLANTS                                   ATTORNEYS FOR APPELLEE
      Frederick L. Carpenter                                    John W. Mervilde
      Daniel L. Freeland & Associates, P.C.                     Rick D. Meils
      Highland, Indiana                                         Meils Thompson Dietz & Berish
                                                                Indianapolis, Indiana



                                                 IN THE
          COURT OF APPEALS OF INDIANA

      Edward Rusnak and Rebecca                                 May 31, 2016
      Rusnak,                                                   Court of Appeals Case No.
      Appellants – Third Party Plaintiffs,                      64A03-1510-PL-1741
                                                                Appeal from the Porter Superior
              v.                                                Court
                                                                The Honorable William E. Alexa,
      Brent Wagner Architects,                                  Judge
      Appellee-Third Party Defendant.                           Trial Court Cause No.
                                                                64D02-1311-PL-10182



      Robb, Judge.




                                Case Summary and Issues
[1]   In 2006, Edward and Rebecca Rusnak contracted with Brent Wagner

      Architects (“BWA”) for the design of a home to be constructed on a lot they

      had recently purchased. Alan R. Sommers Construction Company

      Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016               Page 1 of 20
      (“Sommers”), as general contractor, constructed the home between 2008 and

      2010. This litigation commenced in 2013 when Sommers sued, seeking to

      enforce the Rusnaks’ obligation to pay for the home. 1 The Rusnaks filed a third

      party complaint against BWA for breach of contract. BWA filed a motion for

      summary judgment; shortly after the motion was fully briefed and set for

      hearing, the Rusnaks filed a motion to amend their third party complaint to add

      an additional cause of action against BWA. The Rusnaks appeal the trial

      court’s orders on those motions, raising the following issues for our review: 1)

      whether the trial court erred in granting summary judgment to BWA, and 2)

      whether the trial court erred in denying their motion to amend the third party

      complaint. Concluding the trial court erred in granting summary judgment to

      BWA and abused its discretion in denying the Rusnaks’ motion to amend, we

      reverse and remand.



                            Facts and Procedural History
[2]   In May 2006, the Rusnaks entered into a Lot Purchase Agreement with 400

      North, LLC (“400 North”) for the purchase of a lot in the Pepper Creek

      subdivision in Valparaiso. In September 2006, the Rusnaks entered into a

      contract for BWA to design the home they planned to build in Pepper Creek.

      The contract documents signed by the parties include “AIA Document B155




      1
       The trial court granted summary judgment to Sommers on its complaint seeking to recover on a promissory
      note signed by the Rusnaks. See Appellants’ Appendix at 336-38. The Rusnaks do not appeal this order and
      Sommers is not a party to this appeal.

      Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016                     Page 2 of 20
Standard Form of Agreement Between Owner and Architect for a Small

Project,” which identifies the following responsibilities of the architect for the

project:


        The Architect shall provide architectural services for the project,
        including normal structural, mechanical and electrical design
        services. Services shall be performed in a manner consistent with
        professional skill and care.


        ***


        1.2 During the Construction Phase, if requested by Owner, the
        Architect shall act as the Owner’s representative and provide
        administration of the Contract between the Owner and
        Contractor. The extent of the Architect’s authority and
        responsibility during construction is described in this Agreement
        and in AIA Document A205, General Conditions of the Contract
        for Construction of a Small Project. Unless otherwise agreed, the
        Architect’s services during construction include visiting the site, reviewing
        and certifying payments, reviewing the Contractor’s submittals, rejecting
        nonconforming Work, and interpreting the Contract Documents.


Appellants’ App. at 163-64 (emphasis added). “AIA Document A205 General

Conditions of the Contract for Construction of a Small Project,” further

describes the architect’s administration of the contract:

        4.1 The Architect will provide administration of the Contract as
        described in the Contract Documents. The Architect will have
        authority to act on behalf of the Owner only to the extent
        provided in the Contract Documents.




Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016            Page 3 of 20
        4.2 The Architect will visit the site at intervals appropriate to the
        stage of construction to become generally familiar with the
        progress and quality of the Work.


        4.3 The Architect will not have control over or charge of and
        will not be responsible for construction means, methods,
        techniques, sequences or procedures, or for safety precautions
        and programs in connection with the Work, since these are solely
        the Contractor’s responsibility. The Architect will not be
        responsible for the Contractor’s failure to carry out the Work in
        accordance with the Contract documents.


        4.4 Based on the Architect’s observations and evaluations of the
        Contractor’s Applications for Payment, the Architect will review
        and certify the amounts due the Contractor.


        4.5 The Architect will have authority to reject Work that does
        not conform to the Contract Documents.


Id. at 168. “Work” is defined as “the construction and services required by the

Contract Documents, and includes all other labor, materials, equipment and

services provided by the Contractor to fulfill the Contractor’s obligation.” Id. at

167. Document A205 also describes the contractor’s responsibilities, including:


        3.3.1 The Contractor shall supervise and direct the Work, using
        the Contractor’s best skill and attention. The Contractor shall be
        solely responsible for and have control over construction means,
        methods, techniques, sequences and procedures, and for
        coordinating all portions of the Work.




Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016     Page 4 of 20
      Id. at 168. Ultimately, the Rusnaks selected Sommers as their contractor and

      executed a promissory note to Sommers in the amount of $376,448.44. The

      home was built from 2008 to 2010.


[3]   On November 12, 2013, Sommers filed a lawsuit against the Rusnaks, alleging

      breach of contract and unjust enrichment for their failure to pay the promissory

      note in full. The Rusnaks filed their answer, affirmative defenses, and

      counterclaim against Sommers, and also filed a third party complaint against

      BWA.2 The Rusnaks asserted a claim for breach of contract against BWA,

      alleging that, as architect of the project, BWA “owed a duty to [the Rusnaks] to

      properly design and supervise the construction project” and “breached this duty

      by allowing the construction conduct to fall below the applicable standard of

      care,” causing injury and damages to the Rusnaks. Id. at 42.


[4]   During discovery, the Rusnaks’ answers to interrogatories propounded by

      BWA explained their theory of liability against BWA:

              As the Architect overseeing the project, [BWA] had a duty to
              perform certain functions and services on behalf of [the Rusnaks],
              including but not limited to the general oversight of the
              construction project and all work being performed at the site.
              [BWA] failed to perform those duties to a reasonable standard of
              care which led to the foreseeable damages of substandard
              practices which resulted in many defective conditions on various
              areas of the Home, many of which are quite substantial but none




      2
       The Rusnaks’ third party complaint also asserted claims for breach of contract and breach of the implied
      warranty of habitability against 400 North. 400 North is not a party to this appeal.

      Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016                         Page 5 of 20
              of which are acceptable. We had numerous meetings [with
              BWA] discussing the many corrections that needed to be made as
              the residence was under construction . . . .


      Id. at 201. Their answers also set forth a litany of work they allege did not

      conform to the contract documents in the construction of their home, including,

      but not limited to:

              Poor drywall finish; miss-cuts on wood trim; wood trim damaged
              by other work on the home and installation of later added wood
              trim; poor finish on surfaces; roof leaks; standby power back-up
              wiring issues; other electrical issues; gas line leaks; sewer back-
              ups; plumbing issues, such as missing drains and missing line
              feeds; incorrect water reverse osmosis equipment installed is not
              as agreed or specified; poor concrete installation and incorrect
              stairs at front entrance.


      Id. at 202.


[5]   The Rusnaks propounded the following interrogatories to BWA:

              8. Did you perform any on-site services at the Property? If so,
              provide the dates you visited the Property to perform services, a
              description of the services performed, and the portions of the
              construction you observed.


              Answer: [BWA] objects to this interrogatory as vague,
              ambiguous, overly broad and unduly burdensome. However,
              without waiving said objection, and subject thereto, [BWA]
              performed site observation pursuant to the contract.


              9. Did you observe any deviation from the intended design on
              the Property? If so, provide the nature of the deviation and the

      Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016     Page 6 of 20
                date you observed it, whether you reported any deviation from
                the intended design and to whom you reported the deviation, as
                well as the date you made the report, and whether any corrective
                actions were taken with respect to any observed deviation?


                Answer: [BWA] objects to this interrogatory as overly broad and
                unduly burdensome. However, without waiving said objection,
                and subject thereto, yes. The front step layout.


      Id. at 223. With regard to the front steps, the Rusnaks’ interrogatory answers

      stated:


                The concrete work at the front entrance is defected [sic]. [BWA]
                was supposed to be checking the pouring of the stairs and other
                flat work. The stair mold framing did not extend far enough to
                the left by approximately three inches. [BWA] contacted
                [Sommers] regarding this and [Sommers] arrived at the jobsite
                and after reviewing it told [BWA] that it was too late to change
                for the cement trucks were already on their way so they needed
                to deal with it.


      Id. at 203.


[6]   On February 4, 2015, BWA filed a motion for summary judgment, arguing the

      Rusnaks “seek to hold BWA liable for the alleged acts and omissions of

      Sommers and its contractors in the construction of the home” but the AIA

      documents that comprise the contract and govern the relationship between

      BWA and the Rusnaks “make clear that BWA cannot be held liable for any

      alleged defects or mistakes by Sommers or its contractors.” Id. at 151. On

      April 24, 2015, the Rusnaks responded to the motion for summary judgment,

      opposing the motion on the ground that BWA agreed to act as their
      Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016   Page 7 of 20
      representative during the construction phase and despite having the authority

      and duty to reject nonconforming work, failed to do so: “[BWA’s] actions and

      inactions in failing to reject the nonconforming Work is a genuine issue of

      material fact that must be decided by the trier of fact in this matter.” Id. at 173.

      The interrogatory answers set forth above were among the evidence designated

      by the parties. A hearing on the motion for summary judgment was scheduled

      for May 27, 2015.


[7]   On May 20, 2015, the Rusnaks filed a Motion for Leave to File Amended

      Complaint, alleging that through discovery, they had “uncovered additional

      information that provides a basis to assert a claim against [BWA] for defective

      design in the creation of the construction drawings, diagrams and blueprints.”

      Id. at 240. Specifically, they alleged a design defect with respect to overloading

      of the foundation. The Rusnaks’ motion noted that no discovery deadlines had

      been established, they had not previously amended their pleadings, and asserted

      BWA would not be prejudiced by the amendment.


[8]   On May 27, 2015, the trial court held the scheduled hearing on BWA’s motion

      for summary judgment. The trial court took the matter under advisement. On

      June 1, 2015, BWA filed a response to the Rusnaks’ motion to amend their

      complaint, asserting the motion “is untimely and prejudicial, and will be moot

      if the Court grants BWA’s motion for summary judgment.” Id. at 247.




      Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016    Page 8 of 20
[9]    On July 9, 2015, the trial court entered an order on both pending motions. The

       trial court denied the motion to amend without further comment. With respect

       to BWA’s motion for summary judgment, the trial court stated:


               9. The Contract entered into between these parties is not
               ambiguous.


               10. [BWA] performed all of its duties and obligations that were
               owed to [the Rusnaks] under the terms and conditions of the
               Contract entered into between these two parties.


               11. There remain no genuine issues of material fact and entry of
               Summary Judgment is warranted in this cause.


       Id. at 281. Because the summary judgment for BWA did not dispose of all

       claims against all parties involved in the litigation, BWA moved for entry of

       final judgment pursuant to Indiana Trial Rule 54(B). The trial court granted

       BWA’s motion on July 17, 2015, noting it had granted summary judgment to

       BWA on all claims against it, determining there was no just reason for delay,

       and expressly directing entry of final judgment for BWA.


[10]   The Rusnaks filed a motion to correct error with respect to both the grant of

       summary judgment to BWA and the denial of leave to amend their complaint.

       After a hearing, the trial court entered the following order:


               The Court originally granted BWA’s Motion for Summary
               Judgment as there was no material fact in dispute and BWA was
               entitled to judgment as a matter of law. The Court reviewed the
               relevant documents and found that BWA preformed [sic] all the
               duties listed to BWA in the contract between [the Rusnaks] and
       Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016    Page 9 of 20
               BWA. As there was no issue of material fact and BWA was
               entitled to judgment as a matter of law, the Court was proper in
               granting Summary Judgment in favor of BWA.


               The Court also originally denied [the Rusnaks’] Motion for
               Leave to Amend Complaint. . . . While there was no showing of
               bad faith, dilatory motive on the part of the amending party, [or]
               failure to cure deficiencies by previous amendments, the Court
               did find that it would prejudice the adverse party. It would have
               been prejudicial to allow [the Rusnaks] to amend the very same
               complaint because the Motion [for Summary Judgment] had
               already been fully briefed and was merely awaiting a hearing.
               Therefore the Court’s denial of [the Rusnaks’] Motion for Leave
               to Amend was proper due to the prejudice it would cause BWA.


       Id. at 330. The trial court denied the motion to correct error, and this appeal

       ensued.



                                  Discussion and Decision
                                      I. Summary Judgment
                                       A. Standard of Review
[11]   The party moving for summary judgment must “affirmatively negate an

       opponent’s claim” by demonstrating that the designated evidence raises no

       genuine issue of material fact and that the moving party is entitled to judgment

       as a matter of law. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014) (internal

       quotation marks and citation omitted); see also Ind. Trial Rule 56(C). Summary

       judgment is improper if the moving party fails to carry its burden, but if it

       succeeds, then the nonmoving party must come forward with evidence
       Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016    Page 10 of 20
       establishing the existence of a genuine issue of material fact in order to preclude

       summary judgment. Gill v. Evansville Sheet Metal Works, Inc., 970 N.E.2d 633,

       637 (Ind. 2012).


[12]   We review an order granting summary judgment de novo, which is the same

       standard of review applied by the trial court. Hughley, 15 N.E.3d at 1003.

       When the trial court has granted summary judgment to the moving party, the

       nonmoving party has the burden on appeal of persuading us that the grant of

       summary judgment was in error. Id. However, “we carefully assess the trial

       court’s decision to ensure that [the nonmoving party] was not improperly

       denied his day in court.” Id. (citation omitted). In reviewing the record, we

       consider only the evidentiary matter the parties have designated to the trial

       court, see T.R. 56(C), (H), and we construe all reasonable inferences in favor of

       the nonmoving party, Hughley, 15 N.E.3d at 1003. “A fact is ‘material’ if its

       resolution would affect the outcome of the case, and an issue is ‘genuine’ if a

       trier of fact is required to resolve the parties’ differing accounts of the truth, or if

       the undisputed material facts support conflicting reasonable inferences.” Id.

       (quoting Williams v. Tharp, 914 N.E.2d 756, 761 (Ind. 2009)).


[13]   Indiana’s heightened summary judgment standard “consciously errs on the side

       of letting marginal cases proceed to trial on the merits, rather than risk short-

       circuiting meritorious claims.” Id. at 1004.




       Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016      Page 11 of 20
                              B. Genuine Issue of Material Fact
[14]   This appeal requires the interpretation and construction of a contract, which are

       questions of law. John M. Abbott, LLC v. Lake City Bank, 14 N.E.3d 53, 56 (Ind.

       Ct. App. 2014). As such, cases involving contract interpretation are particularly

       appropriate for summary judgment. Id. And because the interpretation of a

       contract presents a question of law, it is reviewed de novo by this court. Jenkins

       v. S. Bend Cmty. Sch. Corp., 982 N.E.2d 343, 347 (Ind. Ct. App. 2013), trans.

       denied. We review the contract as a whole, attempting to ascertain the parties’

       intent and making every attempt to construe the language of the contract “so as

       not to render any words, phrases, or terms ineffective or meaningless.” Four

       Seasons Mfg., Inc. v. 1001 Coliseum, LLC, 870 N.E.2d 494, 501 (Ind. Ct. App.

       2007). If a contract’s terms are clear and unambiguous, we give those terms

       their plain and ordinary meaning. Dunn v. Meridian Mut. Ins. Co., 836 N.E.2d

       249, 251 (Ind. 2005). When the terms of a contract are ambiguous or uncertain,

       however, and its interpretation requires extrinsic evidence, its construction is

       left to the factfinder. Johnson v. Johnson, 920 N.E.2d 253, 256 (Ind. 2010). Any

       ambiguity in the contract is construed against the drafter. MPACT Constr. Grp.,

       LLC v. Superior Concrete Constructors, Inc., 802 N.E.2d 901, 910 (Ind. 2004). A

       contract is ambiguous if reasonable people would disagree as to the meaning of

       its terms. Beam v. Wausau Ins. Co., 765 N.E.2d 524, 528 (Ind. 2002).


[15]   When summary judgment is granted based on the construction of a written

       contract, the trial court has either determined as a matter of law that the

       contract is not ambiguous or uncertain, or that any contract ambiguity can be

       Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016   Page 12 of 20
       resolved without the aid of a factual determination. Cmty. Anesthesia & Pain

       Treatment, L.L.C. v. St. Mary Med. Ctr. Inc., 26 N.E.3d 70, 77 (Ind. Ct. App.

       2015), trans. denied. Though we are not bound by the trial court’s findings on a

       summary judgment ruling, they do aid our review by providing a statement of

       the reasons for the trial court’s action. See id. at 76. Here, the trial court

       specifically noted in its order granting summary judgment to BWA that the

       contract was not ambiguous and BWA performed all its duties and obligations

       under the contract. Based on the contract documents themselves and the

       designated evidence, we disagree.


[16]   The contract documents between the Rusnaks and BWA provide that during

       construction, BWA will visit the construction site to become familiar with the

       progress and quality of the contractor’s work—that is, the construction and

       services required by the contract documents—and has the authority to reject

       non-conforming work on behalf of the owners. See Appellants’ App. at 164

       (Document B155, article 1.2) and 168 (Document A205, article 4). The

       designated evidence includes many examples of Sommers’ work the Rusnaks

       claim do not conform to the contract. Edward Rusnak avers in his designated

       affidavit that the Rusnaks brought multiple non-conformities to BWA’s

       attention, but BWA failed to address them with Sommers or reject any of the

       work. The designated evidence also includes an admission by BWA that it

       observed at least one non-conformity. Although BWA itself does not indicate

       that it brought that non-conformity to Sommers’ attention or otherwise took

       action regarding the non-conforming work, the Rusnaks’ answers to


       Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016    Page 13 of 20
       interrogatories indicate BWA did approach Sommers about the problem, and

       when told it was too late to fix the problem, did nothing further.


[17]   Focusing on the exculpatory clause in Document A205, BWA argues it “cannot

       be held liable for the alleged failure of Sommers to use the proper means,

       methods, techniques, or procedures in executing its own contractual

       obligations.” Brief of Appellee at 11. The Rusnaks “agree wholeheartedly”

       that BWA is not responsible for the “shoddy construction work performed by

       Sommers.” Appellants’ Brief at 15. But they assert—and we agree—that the

       clause relieving BWA of liability for the contractor’s performance of the work

       does not excuse BWA from meeting its own obligation to reject work it knows

       fails to conform to the contract documents, plans, and specifications. If the

       exculpatory clause were interpreted to mean that BWA cannot be held

       accountable for failing to reject non-conforming work because the work itself is

       the province of the contractor, then BWA’s clearly stated responsibility to reject

       non-conforming work is essentially meaningless. We will not construe a

       contract such that a term is meaningless when it is possible to do otherwise. See

       Storch v. Provision Living, LLC, 47 N.E.3d 1270, 1273 (Ind. Ct. App. 2015).


[18]   Because the designated evidence shows BWA observed at least one item of non-

       conforming work, the question is what does the contract term “reject non-

       conforming Work” mean? The Rusnaks’ answers to interrogatories indicate

       BWA did address with Sommers the front steps—when they were still just

       framed—and Sommers said “they needed to deal with it” because the cement

       trucks were already on the way and it was too late to do anything about it.

       Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016   Page 14 of 20
Appellants’ App. at 203. The steps were poured as they were wrongly framed.

“Reject” is defined as “to refuse to accept, consider, submit to, take for some

purpose, or use.” Merriam-Webster Online Dictionary, http://www.merriam-

webster.com/dictionary/reject (lasted visited May 26, 2016). Reasonably

intelligent people could differ in the meaning they would give to BWA’s

responsibility to reject non-conforming work. One might believe simply

bringing the problem to Sommers’ attention and leaving the means, methods,

techniques, or procedures of resolving the non-conformity to Sommers

constituted rejecting or refusing to accept the work on the Rusnaks’ behalf.

Another might interpret the term to mean BWA should have taken some

affirmative action to assure the problem was corrected, or declined to certify

payment for that element of the work if it was not. See Appellants’ App. at 164

(stating the architect’s responsibilities during construction include reviewing

and certifying payments); see also id. at 168 (stating that “[b]ased on the

Architect’s observations and evaluations of the Contractor’s Applications for

Payment, the Architect will review and certify the amounts due the

Contractor”).3




3
  We have focused here on just the one non-conformity BWA admits it observed, and the Rusnaks concede
the contract may not impose a duty on BWA to seek out and find other non-conforming work. See
Appellants’ Br. at 15. However, the designated evidence demonstrates the Rusnaks pointed out many other
non-conformities to BWA as construction progressed, so there is also a question about whether BWA should
have rejected—however that term is construed—any of the other non-conforming work of which it was
given notice.



Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016                    Page 15 of 20
[19]   There is a reasonable question about what the term “reject” as used in the

       contract documents means, and that uncertainty should be addressed by the

       factfinder. See Johnson, 920 N.E.2d at 256. Moreover, there is a question of fact

       at least as to whether BWA’s actions in the face of a known non-conformity in

       the work met its contractual obligation to reject non-conforming work on the

       Rusnaks’ behalf. Construing the designated evidence and reasonable inferences

       in the Rusnaks’ favor and applying Indiana’s heightened summary judgment

       standard, we conclude the trial court erred in granting summary judgment to

       BWA.


                                       II. Motion to Amend
                                       A. Standard of Review
[20]   Trial Rule 15(A) provides that a party “may amend his pleading once as a

       matter of course” if within a certain time frame. “Otherwise a party may

       amend his pleading only by leave of court or by written consent of the adverse

       party; and leave shall be given when justice so requires.” T.R. 15(A).

       Amendments to pleadings are to be liberally allowed, but the trial court retains

       broad discretion to grant or deny motions to amend pleadings. Hilliard v. Jacobs,

       927 N.E.2d 393, 398 (Ind. Ct. App. 2010), trans. denied. We will only reverse

       upon an abuse of that discretion, which occurs when the trial court’s decision is

       clearly against the logic and effect of the facts and circumstances before the

       court or when the trial court has misinterpreted the law. Id. We judge an abuse

       of discretion by evaluating several factors, including “undue delay, bad faith, or

       dilatory motive on the part of the movant, repeated failure to cure deficiency by
       Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016   Page 16 of 20
       amendment previously allowed, undue prejudice to the opposing party by

       virtue of the amendment, and futility of the amendment.” Id. (citation

       omitted).


                                         B. Prejudice to BWA
[21]   The trial court explained in its order on the Rusnaks’ motion to correct error

       that there was no evidence of bad faith, dilatory motive, or previous failure to

       cure deficiencies by the Rusnaks. Nonetheless, because the parties had already

       fully briefed BWA’s motion for summary judgment and the trial court had

       scheduled a hearing on the matter before the Rusnaks filed their motion to

       amend, the trial court concluded granting the Rusnaks’ motion would prejudice

       BWA. Yet, the trial court further noted:

               In the order granting Summary Judgment in favor of BWA, the
               Court only granted the Motion in regard to . . . the count of
               Breach of Contract. As no other issues have been litigated, res
               judicata does not apply to the desired count in the [Rusnaks’]
               proposed amended complaint. The Court denied the [Rusnaks’]
               Motion for Leave to Amend Complaint not because the claim
               was without merit, but due to the prejudice it would cause BWA
               to allow the amended complaint to go forward. As the matter
               has not been heard before a court, [the Rusnaks] are free to
               pursue this complaint, just not in conjunction with the current
               pending claims associated with this cause number.


       Appellants’ App. at 330-31. In short, it appears the trial court denied the

       Rusnaks’ motion to amend their complaint to add a second count because it

       was simultaneously granting BWA’s motion for summary judgment on the

       initial—and at that time, only—count.
       Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016   Page 17 of 20
[22]   The Rusnaks filed their third party complaint against BWA on January 8, 2014,

       alleging that BWA “owed a duty to [the Rusnaks] to properly design and

       supervise the construction project [and BWA] breached this duty by allowing

       the construction conduct to fall below the applicable standard of care.” Id. at

       42. The parties engaged in discovery throughout 2014, during which the

       Rusnaks elaborated in their interrogatory answers on their theory of BWA’s

       liability, focusing solely on BWA’s obligations during the construction phase.

       BWA filed its motion for summary judgment on February 4, 2015, and the

       Rusnaks made a request in mid-February 2015 for a higher resolution copy of

       certain architectural drawings previously supplied in discovery. They also

       asked for an extension of time to file their summary judgment response. After

       receiving the drawings from BWA in mid-March, the Rusnaks made a second

       request in early April for an extension of time to respond to the summary

       judgment motion and noted they were going to have an engineer review the

       drawings. The Rusnaks filed their summary judgment response on April 22,

       2015, addressed only to their claim BWA breached the contract during the

       construction phase, and one month later, filed their motion for leave to amend

       their complaint to add a count of breach of contract for design defects.


[23]   “The stated policy of this court and our Supreme Court is to freely allow such

       amendments in order to bring all matters at issue before the court.” Kreilein v.

       Common Council of City of Jasper, 980 N.E.2d 352, 358 (Ind. Ct. App. 2012).

       Leave to amend should be granted unless the amendment will result in

       prejudice to the opposing party. Id. In Hilliard, we held the trial court did not


       Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016    Page 18 of 20
       abuse its discretion in denying the plaintiff’s motion for leave to file a third

       amended complaint in part because of prejudice to the opposing party. 927

       N.E.2d at 401. The motion to amend was filed three years after the original

       complaint, the claims to be added could have been raised in the original

       complaint and there was no convincing explanation for why they had not been,

       and the plaintiff sought leave to amend only after it was apparent the initial

       claims would fail. Id. at 400; see also Crawford v. City of Muncie, 655 N.E.2d 614,

       623 (Ind. Ct. App. 1995) (holding the trial court did not abuse its discretion by

       denying leave to amend the complaint because the defendant would be

       prejudiced where the plaintiff moved to amend six years after filing the initial

       complaint and only after the defendant filed a motion to dismiss), trans. denied.


[24]   Here, the Rusnaks filed their first and only motion to amend approximately

       eighteen months after the original complaint was filed. The statute of

       limitations had not yet run, no discovery deadlines or trial dates had been set in

       the existing litigation, and summary judgment on the initial claim, while fully

       briefed, had not yet been decided. The Rusnaks asserted they had only just

       recently discovered a basis for a design defect claim such that the claim could

       not have been brought in the original complaint.4 BWA’s hope that it could

       “terminate [its] involvement in this litigation” through its motion for summary

       judgment is insufficient to show prejudice in allowing a potentially viable,



       4
        The original complaint did note BWA’s duty to properly design the project but nothing thereafter—until the
       motion to amend—indicated they were pursuing a claim based on that duty or had any evidence to support
       such a claim.

       Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016                       Page 19 of 20
       timely claim to be added. Br. of Appellees at 18; see State Farm Mut. Auto. Ins.

       Co. v. Shuman, 175 Ind. App. 186, 193, 370 N.E.2d 941, 948 (1977) (“Claims of

       incurring the burden of further discovery, preparation and expense do not

       constitute a showing of prejudice . . . .”). In fact, the trial court’s suggestion

       that the Rusnaks would be able to file a completely independent action

       asserting the design defect claim would seem to cause more prejudice to BWA

       than allowing a new claim to be added in the already existing litigation by

       requiring it to engage in piecemeal litigation, which is disfavored. We therefore

       conclude the trial court abused its discretion in denying the Rusnaks’ motion to

       amend their complaint.



                                                Conclusion
[25]   There are issues for the factfinder regarding the nature of BWA’s obligations

       under the contract and whether it met them; therefore, summary judgment for

       BWA was improper at this stage. The trial court abused its discretion in

       denying the Rusnaks’ motion to amend their complaint to add an additional

       claim because no prejudice will result to BWA. The judgment of the trial court

       is reversed and this case is remanded for further proceedings consistent with this

       opinion.


[26]   Reversed and remanded.


       Barnes, J., and Altice, J., concur.



       Court of Appeals of Indiana | Opinion 64A03-1510-PL-1741 | May 31, 2016    Page 20 of 20
