Case Number: 21STCV13040    Hearing Date: March 28, 2023    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

MOVING PARTY:              Plaintiff David Allen.

OPPOSITION:                      Defendants Pacific Seismic Products, Inc. and Giovanny Martinez.

REPLY:                                 Plaintiff David Allen.

Background Allegations

Plaintiff David Allen sues Defendants Pacific Seismic Products, Inc., Giovanny Martinez, and Does 1 through 20 pursuant to a First Amended Complaint alleging (1) FEHA Discrimination, (2) FEHA Harassment, (3) FEHA Retaliation, (4) FEHA Failure to Prevent Discrimination, Harassment, and Retaliation, (4) FEHA Failure to Provide Reasonable Accommodations, (6) FEHA Failure to Engage in the Interactive Practice, (7) Violation of California Family Rights Act, (8) Denial of and Discrimination Based Upon the Use of Sick Leave, (9) Declaratory Judgment, (10) Wrongful Termination in Violation of Public Policy, (11) Retaliation for Disclosing Violations of Law under the Labor Code, and (12) Unfair Competition in violation of the Business and Professions Code. The claims are grounded, inter alia, in allegations of workplace age discrimination and harassment against Plaintiff Allen, as well as discrimination and harassment related to Plaintiff Allen’s need for medical and family leave related to leg injuries, time off to care for his spouse, and a severed right index finger damaged in the workplace.

On March 6, 2023, Plaintiff Allen filed a Motion for Leave to File Second Amended Complaint to add a new cause of action under California Labor Code section 6310—Labor Code Retaliation—and add five new defendants.

On March 15, 2023, Defendants Pacific Seismic Products, Inc. and Giovanny Martinez (“Defendants”) filed an opposition to the motion for leave. Plaintiff Allen replied thereto on March 20, 2023.

Motion for Leave to File Second Amended Complaint: GRANTED.

Legal Standard

California Code of Civil Procedure section 473, subdivision (a)(1) provides, in relevant part: “The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect; and may, upon like terms, enlarge the time for answer or demurrer. The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars; and may upon like terms allow an answer to be made after the time limited by this code.”

Under California Rules of Court Rule, rule 3.1324, subdivision (a), a motion to amend a pleading shall:

(1) include a copy of the proposed amendment or amended pleading, which must be serially numbered to differentiate it from previous pleadings or amendments;

(2) state what allegations in the previous pleading are proposed to be deleted, if any, and where, by page, paragraph and line number, the deleted allegations are located; and

(3) state what allegations are proposed to be added to the previous pleading, if any, and where, by page, paragraph, and line number, the additional allegations are located.

Under California Rules of Court, rule 3.1324, subdivision (b), a separate declaration must accompany the motion and must specify:

(1) the effect of the amendment;

(2) why the amendment is necessary and proper;

(3) when the facts giving rise to the amended allegations were discovered; and

(4) the reasons why the request for amendment was not made earlier.

“This discretion should be exercised liberally in favor of amendments, for judicial policy favors resolution of all disputed matters in the same lawsuit.” (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1047.) Ordinarily, the court will not consider the validity of the proposed amended pleading in ruling on a motion for leave since grounds for a demurrer or motion to strike are premature; however, the Court does have discretion to deny leave to amend where a proposed amendment fails to state a valid cause of action as a matter of law and the defect cannot be cured by further amendment. (See California Casualty General Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274, 281, overruled on other grounds by Kransco v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390, 403-06; see also Kittredge Sports Co. v. Superior Court, supra, 213 Cal.App.3d at p. 1048 [“[E]ven if the proposed legal theory is a novel one, ‘the preferable practice would be to permit the amendment and allow the parties to test its legal sufficiency by demurrer, motion for judgment on the pleadings or other appropriate proceedings’” (quoting California Casualty General Ins. Co. v. Superior Court, supra, at p. 280)].)

However, leave to amend may be properly denied when “the insufficiency of the proposed amendment is established by controlling precedent and . . . [can]not be cured by further appropriate amendment.” (California Casualty General Ins. Co. v. Superior Court, supra, 173 Cal.App.3d at pp. 280-81; see, e.g., Foxborough v. Van Atta (1994) 26 Cal.App.4th 217, 231 [not an abuse of discretion to deny leave to amend when “proposed amendment would have been futile because it was barred by the statute of limitations” with no indication of relating back to the original complaint].)

Further, if a good amendment is proposed in proper form, a long, unwarranted and unexcused delay in presenting it may be a good reason for denial. (Roemer v. Retail Credit Co. (1975) 44 Cal.App.3d 926, 939-40.) In most cases, the factors for timeliness are: (1) lack of diligence in discovering the facts or in offering the amendment after knowledge of them; and (2) the effect of the delay on the adverse party. (Id. at p. 940.) If the party seeking the amendment has been dilatory, and the delay has prejudiced the opposing party, the judge has discretion to deny leave to amend. (Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 490.) Prejudice exists where the amendment would require delaying the trial, resulting in loss of critical evidence, or added costs of preparation such as an increased burden of discovery. (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 486-88.)

Analysis

I. California Rule of Court, rule 3.1324 Discussion

The Court first finds that Plaintiff’s motion satisfies the requirements provided in California Rules of Court, rule 3.1324, subdivision (a) because the Huerta declaration accompanying this motion contains a copy of the proposed Second Amended Complaint that satisfies the requirements of this rule. (Mot., Huerta Decl., Exs. 1 [redlined Second Amended Complaint showing differences from First Amended Complaint], 2 [clean copy of Second Amended Complaint].)

The Court further finds that the Huerta declaration satisfies the requirements provided in California Rules of Court, rule 3.1324, subdivision (b) because the Huerta declaration explains (1) the effect of amendment in adding five defendants to this action—i.e., (i) Koso M-Mac, International, Inc., (ii) Koso America, Inc., (iii) Koso International, Inc., (iv) Rexa, Inc., and (v) Nihon Noso Co., Ltd; (2) the amendment is necessary and proper as to addition of the five new defendants to this lawsuit because the proposed defendants are alleged alter egos, joint employers, and or in joint venture with Defendant Pacific Seismic Products, (3) the facts giving rise to the new defendant allegations arose in January 2023 pursuant to the deposition of parties involved with Defendants, including Defendant Giovanny Martinez, and (4) the reason why this amendment was not sought earlier was because Plaintiff attempted to stipulate to the Second Amended Complaint with Defendants, who refused to permit a stipulation to the SAC’s filing. (See Mot., Huerta Decl., ¶¶ 4-8.)

While the Huerta declaration does not elaborate on the addition to the Second Amended Complaint of a cause of action for Retaliation under Labor Code section 6310 (see Mot., Huerta Decl., Ex. 2, pp. 23-25, ¶¶ 135-49), the Court finds the Huerta declaration’s reference to communications between counsel wherein Huerta emailed a copy of the Second Amended Complaint to defense counsel, as well as the factual pleadings in the First Amended Complaint, sufficiently apprise Defendants of the effect of adding this cause of action and the reasons why amendment in this regard is necessary and proper.

The Court does not find any merit to the conclusory argument advanced in Defendants’ motion that “the Declaration of Susan R. Huerta filed in connection with [Plaintiff’s] Motion is deficient and, in any event, does not provide sufficient support for the Motion to add any of the Proposed Defendants.” (See Opp’n, 5:25-6:5.) The Huerta declaration is more than sufficiently clear as to the reasons for the addition of the five proposed defendants vis-à-vis California Rules of Court, rule 3.1324, subdivision (b).

II. Discussion as to Other Reasons for Granting or Denying Motion

In its motion, Plaintiff argues that this Court should grant the relief requested because (1) well established judicial policy favoring great liberality in amendments supports the grant of this motion (Mot., 5:4-6:15), (2) Plaintiff seeks to add new defendants whose identities were only confirmed after recently conducted discovery and a new cause of action relating back to the original complaint, (Mot., 6:16-11:25), (3) the SAC will not prejudice defendants insofar as no new factual allegations are being added to the pleadings and Defendants, through discovery, put the corporate structure and alter ego allegations against the five proposed defendants at issue (Mot., 11:26-12:7), and (4) amendment would allow Plaintiff to assert meritorious causes of action where California policy is for lawsuits to be decided on the merits (Mot., 12:8-18).

In opposition, Defendants argue that: (1) the depositions conducted by Plaintiff in January made scant reference to alter ego grounds to add the five proposed defendants to this lawsuit other than Defendant Giovanny Martinez’s reference to final sign off on decisions needing approval from ownership in Japan (Opp’n, 6:6-8); (2) no other support exists for the addition of the proposed defendants (Opp’n, 6:8-10); (3) Plaintiff should hold off on addition of the proposed defendants until Plaintiff in fact has evidence of alter ego, agency, or joint employer liability as to avoid unnecessary legal fees and costs to the proposed defendants (Opp’n, 6:10-14); (4) the fact that the deponents deposed in January 2023 rendered work for the proposed defendants does not mean that Plaintiff himself ever worked for the proposed defendants or that the separateness of Pacific Seismic Products should be disregarded (Opp’n, 6:15-17); (5) the allegations in the proposed SAC do not establish the elements of joint employer liability (Opp’n, 6:18-7:3); (6) the allegations in the proposed SAC do not establish the elements of alter ego or agency liability (Opp’n, 7:4-8:12); and (7) Plaintiff simply seeks to add the proposed defendants based on information gleaned from the Secretary of State of California website relating to corporate structure filings (Opp’n, 8:13-15). (See also Opp’n, Latter Decl., ¶¶ 3-10 [making same arguments explaining that the only connection to the proposed defendants before the Court is the comment from Defendant Giovanny Martinez relating to decisions from Japan].)

In reply, Plaintiff argues: (1) Defendants made no showing of prejudice in the opposition (Reply, 1:21-10); (2) Defendants improperly argue the merits of the pleadings in the SAC, which is not the standard for a motion for leave to amend (Reply, 2:11-19); and (3) Defendants have made no showing of being misled or surprised by the proposed amendments (Reply, 2:20-3:8).

The Court agrees with Plaintiff and therefore GRANTS this motion. The primary basis for this decision is that all of the opposition arguments against the granting of this motion are grounded in the argument that the pleadings proposed in the SAC are not sufficiently informed by evidence or allegations against the proposed defendants—with no arguments directed at the proposed new cause of action for Labor Code Retaliation. (See Opp’n, 6:6-8:15 generally.) However, “‘the preferable practice would be to permit the amendment and allow the parties to test its legal sufficiency by demurrer, motion for judgment on the pleadings or other appropriate proceedings.’” (Kittredge Sports Co. v. Superior Court, supra, 213 Cal.App.3d at p. 1048 [quoting California Casualty General Ins. Co. v. Superior Court, supra, at p. 280].) As such, the Court exercises its “discretion … liberally in favor of amendment[] [here], for judicial policy favors resolution of all disputed matters in the same lawsuit.” (Kittredge Sports Co. v. Superior Court, supra, at p. 1047.)

Conclusion

Motion for Leave to File and Amend Plaintiff David Allen’s Second Amended Complaint for Damages is GRANTED.