Judge: Alison Mackenzie, Case: 22STCV10313, Date: 2023-11-20 Tentative Ruling
Case Number: 22STCV10313 Hearing Date: November 20, 2023 Dept: 55
NATURE OF PROCEEDINGS: MOTION FOR LEAVE TO FILE FIRST AMENDED
COMPLAINT.
The motion is granted.
The proposed First Amended Complaint may be filed and
served as a separate document within 10 days.
On 3/24/22, Plaintiff LARRY WADE (“Plaintiff”) filed a
Complaint against 6 defendants, alleging that he purchased a residential
property in Malibu from Defendant WYNSTAR INVESTMENTS, LLC (“Defendant”), but
that he now wants to rescind the sale and to get amounts for damages, based on Defendants’
intentional concealment that the County had red-tagged the property, and that
no other improvement could be made on the property without resolving the issues
of the permits and the work done by Defendant.
Plaintiff filed a motion for leave to file a proposed
First Amended Complaint, which amends several causes of action to add
additional defendants, adds causes of action to allege different theories of
liability against defendants, and adds new causes of action against additional
defendants. Plaintiff’s motion and proposed First Amended Complaint complies
with CRC 3.1324.
The Court concludes that Plaintiff is entitled to amend
his complaint. Plaintiff explains that the delay in seeking to amend his
pleading was caused by the significant time it took time to obtain the County’s
file and chain-of-title documents regarding the property. Those documents led
to discovery of more information, including that significant issues with
unpermitted construction existed beyond what Plaintiff initially knew about, and
that the property had been transferred without consideration at least 6 times
among a series of interconnected and related owners (Mot., pp. 12-13). These discoveries gave
rise to Plaintiff’s new claims and new parties in the proposed FAC.
Defendant contends that the Court should not allow the
amended pleading to be filed because the case is baseless because the proposed
new defendants held no interest in the property by the time construction
commenced (Opp., Declaration of Amit Sakhrani, ¶¶ 6-12), had divested their
respective interests in the property prior to the outset of the construction
that Plaintiff alleges was not properly remediated (Sakhrani Dec. at ¶¶ 6-12),
and Plaintiff has not adequately alleged the elements of a claim under Penal
Code Section 496 read together with Section 484 have not been alleged. None of
these arguments have any merit.
Courts generally do not consider the validity of
proposed amendments to a pleading. Kittredge
Sports Co. v. Sup. Ct. (1989) 213 Cal. App. 3d 1045, 1047; Atkinson v.
Elk Corp. (2006) 109 Cal. App. 4th 739, 760 (“the better course of action
would have been to allow … [plaintiff] to amend the complaint and then let the
parties test its legal sufficiency in other appropriate proceedings.”). Distinguishably, an opinion cited in the
opposition addressed plaintiffs’ burden to propose curative amendments in
response to a demurrer and it certainly did not authorize consideration of
opposing evidence as part of the analysis.
See Schifando v. City
of Los Angeles (2003) 31 Cal. 4th 1074, 1075. Also, distinguishably, another opinion cited
recognized that proposed allegations would be futile as being beyond an
indisputable time limitation. See Royalty Carpet Mills, Inc. v. City of
Irvine (2005) 125 Cal. App. 4th 1110, 1125.
The elements of a claim for violation of Penal Code
Section 496 are:
1. Property
was stolen or obtained in a manner constituting theft;
2. defendant
knew the property was so stolen or obtained; and
3. defendant
received or had possession of the stolen property.
Switzer v. Wood
(2013) 35 Cal. App. 5th 116, 126, 129
(“the statute makes no exception for cases involving preexisting
business relationships,….”). See also Siry Investment, L.P. v. Farkhondehpour
(2022) 13 Cal. 5th 333, 351 (“ ‘Penal
Code section 484, subdivision (a) describes the acts constituting theft to
include theft by false pretense, which is the consensual but fraudulent
acquisition of property from its owner…. [The defendant] was found liable for
fraud, i.e., for the fraudulent acquisition of property (money) from its owner….’
”); Bell v. Feibush (2013) 212
Cal.App.4th 1041, 1049 (upholding civil
liability under Penal Code Section 496).
Further, "courts have followed a liberal policy
of applying the alter ego doctrine where the equities and justice of the
situation appear to call for it rather than restricting it to the technical
niceties depending upon pleading and procedure." First Western Bank & Trust Co. v.
Bookasta (1968) 267 Cal.App.2d 910, 915.
And general allegations are permitted as to the
pleading of conspiracy. Quelimane
Co., Inc. v. Stewart Title Guar. Co. (1998) 19 Cal.4th 26, 47. “The existence of a civil conspiracy makes
each participant in the wrongful act responsible as a joint tortfeasor for all
damages resulting from the wrong, whether or not a participant was a direct
actor and regardless of the degree of his activity.” Klistoff v. Sup. Ct. (2007) 157
Cal.App.4th 469, 479. See
also Wyatt v. Union Mortgage Co.
(1979) 24 Cal. 3d 773, 784-86 (conspiratorial agreements may be
circumstantially inferred from circumstances including the nature of the acts,
the relations of the parties (e.g., family business, or corporate officers or
directors), and the interests of the alleged conspirators).
Here, the 14th Cause of Action of the
proposed First Amended Complaint alleges the elements of Penal Code Section
496, including defendants getting Plaintiff’s consensual payment for the
purchase of real property pursuant to false pretenses such as
misrepresentations and concealment of unpermitted construction (Mot. Ex. B
(First Amended Complaint), pp. 29-30).
It also sufficiently alleges vicarious liability as to other claims based
on conspiracy, ratification, agency, and alter ego (e.g., ¶¶ 22-28). Such theories are not just limited to each
proposed defendant’s property interests at the time when construction was
happening.
Conclusion
The motion for leave to file the proposed First
Amended Complaint is granted.