Legal Memorandum: Adding Fraud to a Breach of Contract Complaint

Issue: Under Minnesota law, is it an abuse of discretion to deny a plaintiff’s motion to add a fraud claim to a complaint for breach of contract?

           A fraud claim, even one arising out of a contractual relationship, may be considered independent of any contractual claim.  Hanks v. Hubbard Broadcasting, Inc., 493 N.W. 2d 302, 308 (Minn. Ct. App. 1992); Brooks v. Doherty Rumble & Butler, 481 NW.2d 120, 128 (Minn. Ct. App. 1992); Action Instruments Co. v. Hi-G, Inc., 359 N.W.2d 664, 667 (Minn. Ct. App. 1984).

In the absence of any valid basis for denying a plaintiff’s motion to amend to add a fraud claim, the denial of the motion constitutes an abuse of discretion:  See United Steelworkers of Am. v. Mesker Bros. Indus., Inc., 457 F.2d 91, 93-94 (8th Cir. 1972); Gootee v. Colt Indus., 712 F.2d 1057, 1065 n.7 (6th Cir. 1983) (in construing similar federal rule federal courts hold it is an abuse of discretion to deny leave to amend without stating valid reason).

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