Judge: Anne Richardson, Case: 23STCV12319, Date: 2024-06-21 Tentative Ruling

Case Number: 23STCV12319    Hearing Date: June 21, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

I. Background

On March 13, 2024, Plaintiff Daniel E. Kelly filed a motion for leave of Court to file a First Amended Complaint.

On June 7, 2024, Defendants filed an opposition, and on June 11, 2024, Plaintiff filed a reply.

Plaintiff’s motion is now before the Court.

II. Motion for Leave to Amend: GRANTED in part and DENIED in part.

A. 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 (Kittredge Sports).)

California courts will not ordinarily consider the validity of a proposed amended pleading in ruling on a motion for leave to amend given that any grounds for a demurrer or a motion to strike will be premature at that time. (See California Casualty General Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274, 280-281 (California Casualty), citations omitted, overruled on other grounds by Kransco v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390, 403-406; see also Kittredge Sports, supra, 213 Cal.App.3d at p. 1048 [Where “the proposed legal theory [at issue] 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, supra, at p. 280.)

However, leave to amend may also 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, supra, 173 Cal.App.3d at pp. 280-281; 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].)

B. Analysis

1. Procedural Requirements

Here, Plaintiff meets the procedural requirements for leave to amend.

Plaintiff has filed a ‘clean’ copy of the proposed First Amended Complaint (FAC), thus satisfying California Rules of Court, rule 3.1348(a)(1). (Mot., Shapiro Decl., Ex. B.)

Plaintiff has also filed a ‘redline’ copy of the FAC, showing its differences from the Complaint, and the points and authorities further clarify the amendments, thus satisfying California Rules of Court, rule 3.1348(a)(2)-(3). (Mot., pp. 5-6; Mot., Shapiro Decl., Ex. A.)

Last, Plaintiff has filed a declaration from counsel satisfying California Rules of Court, rule 3.1348(b)(1)-(4). (Mot., Shapiro Decl., ¶¶ 4 [date of discovery; why not brought earlier], 5 [effect; necessary and proper], 10-13 [why not brought earlier] 14 [date of discovery; why not brought earlier], 15 [why not brought earlier].)

2. Substantive Discussion

The Court finds in favor of Plaintiff except as to Defendant Bernald Golditch.

The Court DENIES Plaintiff’s motion in relation to naming the now-deceased Bernald Golditch as a new Defendant in this action. The parties do not dispute that Bernald Golditch has passed away. Instead, the reply pivots and “requests that the Court grant the Motion and once a personal representative of Mr. Golditch’s estate has been appointed, Plaintiff will file a motion seeking to substitute Mr. Golditch’s personal representative in for Mr. Golditch’s place.” (Reply, p. 3.) This relief is sought for the first time on reply and is denied without prejudice.

However, the remainder of the opposition arguments are unavailing.

The sufficiency of the Complaint’s alter ego allegations should be challenged on demurrer. (California Casualty, supra, 173 Cal.App.3d at pp. 280-281.) The face of the proposed FAC does not show, on its face, fatally defective pleadings. Indeed, Plaintiff’s reply advances arguments for the sufficiency of the proposed FAC’s alter ego allegations. (Reply, pp. 3-4.)

Similarly, Defendants can challenge any purported uncertainty or contradictions arising from the proposed FAC’s factual joint liability allegations or exhibits in a demurrer or motion to strike. For leave to amend purposes, however, there is no fatal defect as raised in the opposition. (Opp’n, pp. 4-5.)

Last, the Court is not persuaded that the proposed FAC is a sham based on a change in allegations regarding Plaintiff’s alleged interest in Kellytoy Worldwide Inc. stock. (Opp’n, pp. 6-8.) The reply characterizes this about face as Plaintiff revising what is paragraph 31 of the FAC to update a misstatement as to Plaintiff’s Kellytoy stock interest. (Reply, pp. 4-5.) And as with the Complaint, the proposed FAC is a verified pleading. (Mot., Shapiro Decl., Ex. B, p. 31.) Under these circumstances, the change does not appear to constitute a change so much as a course correction of previously incorrect pleadings amended to properly allege the facts at issue.

3. Disposition

Based on the above, Plaintiff’s motion is DENIED as to the addition of Bernald Golditch as a Defendant. The motion is otherwise GRANTED. 

III. Conclusion

Plaintiff Daniel E. Kelly’s Motion for Leave to File First Amended Complaint [Res ID # 6135] is GRANTED in part and DENIED in part as follows:

(1) DENIED in part as to the addition of Bernald Golditch as a Defendant; and

(2) Otherwise GRANTED.

Plaintiff shall file his First Amended Complaint, removing Bernald Golditch as a Defendant, within seven days of this ruling. However, the proposed pleading need not remove allegations related to Bernald Golditch insofar as they as background for the allegations raised in that pleading.