Betz v. Chena Hot Springs Group

Supreme Court of Alaska · 1987 · Corporations

742 P.2d 1346 (1987)

Updated August 22, 2026

CorporationsCivil ProcedureAntitrustAmendment of PleadingsRule 15(a)Rule 15(c)leave to amendrelation back

Facts

The Betzes alleged that they built and operated an eight-plex hostel on land leased from CHS at Chena Hot Springs Resort under a ten-year operating agreement. They claimed that CHS wrongfully terminated the agreement in 1981, cut off hot water and other essential utilities, and failed to account for and pay funds owed under the contract, forcing them out of business. Their amended complaint originally framed this conduct as an antitrust violation under AS 45.50.562, but after Copperweld made that theory defective as pled, they sought to amend to assert monopolization under AS 45.50.564. The superior court denied amendment even after the trial was continued for nearly a year.

Issue

Did the superior court abuse its discretion by denying leave to amend the complaint to assert a monopolization claim under AS 45.50.564? Relatedly, was the proposed amendment properly denied on grounds of undue delay, prejudice, futility, or statute of limitations?

Rule

Under Alaska Civil Rule 15(a), leave to amend must be freely given when justice so requires. In deciding whether to deny amendment, the court should consider reasons such as undue delay, bad faith, repeated failure to cure deficiencies, undue prejudice, and futility, and must balance the prejudice to the opposing party against the hardship to the movant if amendment is denied. Under Civil Rule 15(c), an amended claim relates back when it arises out of the same conduct, transaction, or occurrence set forth in the original pleading.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Santa Fe, New Mexico, Lena Ortiz sued Desert Mesa Lodge Partners for breach of an operating agreement after the partnership terminated her right to run the only independent café inside a resort complex and shut off water service to the café. Her complaint also included a restraint-of-trade claim that later became defective after an intervening appellate decision; eight months before the continued trial date, Lena moved to amend to plead monopolization based on the same shutdown and service cutoff.

How should the court most likely rule on Lena's motion to amend?

Explanation. Rule 15(a) requires that leave to amend be freely given when justice so requires. The majority held that when the new claim arises from the same conduct, transaction, or occurrence, and the opposing party cannot show substantial prejudice, amendment should be allowed, especially where denial would impose serious hardship on the movant. A new legal theory tied to the same facts is not enough by itself to justify denial.