Century 21 Commodore Plaza, Inc

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF CENTURY 21 COMMODORE PLAZA, INC., ET AL.

Doket 9088. Interlocutory Order, Apr. 20, 1977 Denial of complaint counsel's motion to amend complaint by adding a new theory; and remand of remainder of motion to ALJ as being within his authority on which to act.

ORDER Complaint counsel move to amend paragraphs 14a and 15a of the complaint. These paragraphs now provide in part as follows: 14. In print advertising and elsewhere, respondents, directly or by implication, . make and have made numerous representations to prospective purchasers with respect to the facilties and services associated with the purchase of respondents' condominium units, including but not limited to representations that: a. The water of Morgan Bay was safe and healthy for swimming at the time such representations were made. 15. In truth and in fact:

a. Respondents knew or had reason to know that Morgan Bay was not safe and healthy for swimming.

Complaint counsel request that the following language be substituted:

14.

(1) Morgan Bay was, is, and wil be safe, healthy, and suitable for swimming and bathing.

(2) At the time of the first dissemination of the representations challenged herein and thereafter, the respondents had and relied upon a reasonable basis for the claim that Morgan Bay was, is, and will be safe, healthy, and suitable for swimming and bathing. a.15. (1) Morgan Bay was not, is not, and wil not be safe, healthy, and suitable for swimming and bathing.

(2) At the time of the first dissemination of representations challenged herein and thereafter, Respondents did not have and did not rely upon a reasonable basis for the claim that Morgan Bay was, is, and wil be safe, healthy, and suitable for swimming and bathing. According to complaint counsel, the proposed amendments would simply make it clear that the complaint, as it originally issued alleged that (1) respondents had represented to consumers not only that the water of Morgan Bay was "safe and healthy" for swimming as of the time the representations were made, but also that the bay CENTURY 21 COMMODORE PLAZA, INC., ET AL. 239 238 Interlocutory Order would continue to be suitable for swimming; and (2) respondents representations were unfair and deceptive because respondents lacked a "reasonable basis" for this claim. The administrative law judge concluded that he lacked authority to grant the motion and certified it to the Commission with "the strongest possible recommendation that it be denied.

The law judges have authority to allow an appropriate amendment to pleadings "only if the amendment is reasonably within the scope of the original complaint * * *. Motions for other amendments * * . shall be certified to the Commission." Rules of Practice, Section 15(a). The ALJ lacks authority to .permit modifications where the effect is an alteration of the underlying theory behind the complaint. He may, however, permit servce of an amended pleading that merely clarifies allegations of the complaint or adds examples or practices already alleged to be unlawful. See, e.g.. Cavanagh Communities Corp. 87 F. C. 143, 144 n. 2, 3 (1976). We agree with the ALJ that the theory underlying the "lack of reasonable basis" allegation is suffciently different from the charge already alleged to require certification of this portion of the motion. We also agee that insuffcient justification has been offered for adding a new theory at this time.' The request is, therefore, denied. We disagree, however, with the ALJ' s decision to certify the portion of complaint counsel's motion to amend the complaint to make it clear that evidence of the recent suitability of Morgan Bay for swimming may be introduced. This proposed amendment is reasonably within the scope of the complaint see Cavanagh, supra, and is, therefore, within the ALJ's authority to order. This portion of the motion is remanded to the ALJ.

It is so ordered.

, According to the Ala, addition of the new theory might delay the presentation ofrespondcn\.' City for several months , The ALJ, of course, indicates in his certification order that he would be inclincd to dcny this arnendment Complaint 89 F.