Judge: Armen Tamzarian, Case: 19STCV12078, Date: 2023-01-09 Tentative Ruling
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Case Number: 19STCV12078 Hearing Date: January 9, 2023 Dept: 52
Plaintiff Michael Herman’s
Motion for Leave to File Fourth Amended Complaint
Plaintiff Michael Herman
moves for leave to file a fourth amended complaint. Courts may permit a party to amend any
pleading “in furtherance of justice.”
(CCP § 473(a)(1).) Courts
exercise their discretion “liberally to permit amendment,” and “[t]he policy
favoring amendment is so strong that it is a rare case in which denial of leave
to amend can be justified.” (Howard v.
County of San Diego (2010) 184 Cal.App.4th 1422, 1428.)
A motion for leave to amend
will normally be granted unless (1) the party seeking to amend has delayed
bringing the proposed amendment; and (2) the delay in seeking leave to amend
will cause prejudice to an opposing party. (Hirsa
v. Superior Court (1981) 118 Cal.App.3d 486, 490.)
(1)
Delay
Plaintiff greatly delayed
bringing the proposed amendment. He
filed the initial complaint on April 8, 2019.
He filed this motion on December 19, 2022. The trial is on January 11, 2023—two days
after this hearing.
Plaintiff gives no valid
explanation for the delay. Plaintiff’s
counsel states, “Plaintiff did not seek leave to amend earlier solely due my
illness this past year. I have Long
COVID and was seeking co-counsel to help me with this case before deciding
whether and how to amend the complaint.”
(Delman Decl., ¶ 4.) Counsel does
not state she temporarily closed her practice or did no work at all. A motion for leave to amend does not require
extensive work or preparation via discovery.
The memorandum in support of this motion is only four pages.
Counsel’s conclusory
statement about being ill does not explain or justify years of delay. Counsel’s declaration does not explain
“[w]hen the facts giving rise to the amended allegations were discovered.” (Cal. Rules of Court, rule
3.1324(b)(3).) The new factual allegations
all concern events that occurred no later than 2016. Plaintiff knew all the relevant facts long
ago.
(2)
Prejudice
Permitting the amendment now
would substantially prejudice defendants.
They already successfully defended most of this action. Delay causes prejudice when “plaintiffs were
aware of the facts underlying” a new claim that “should have been pleaded” in
the beginning. (Melican v. Regents of
University of California (2007) 151 Cal.App.4th 168, 176.)
“[W]hen a plaintiff seeks leave to amend his or her complaint only after
the defendant has mounted a summary judgment motion directed at the allegations
of the unamended complaint, even though the plaintiff has been aware of the
facts upon which the amendment is based, ‘[i]t would be patently unfair to
allow plaintiffs to defeat [the] summary judgment motion by allowing them to
present a “moving target” unbounded by the pleadings.’ ” (Falcon v. Long Beach Genetics, Inc. (2014)
224 Cal.App.4th 1263, 1280.)
The third amended complaint
alleged 12 causes of action. Plaintiff
dismissed several causes of action and defendants. Defendants successfully moved for summary
adjudication of other causes of action.
Only two of the 12 causes of action remain. (Delman Decl., ¶ 3.)
Now plaintiff seeks to add
new causes of action based on different facts and legal theories. The proposed fourth amended complaint would
add a new cause of action for conversion of plaintiff’s right to 5% of the
assets of VaporWave, LLC when it was dissolved in 2016. Plaintiff’s prior pleadings did not allege
that. In addition to the facts regarding
the other elements of conversion, this new claim would have entirely new
damages based on 5% of the value of the company. (Prop. 4AC, ¶ 109.)
The proposed fourth amended
complaint would also add a cause of action for breach of fiduciary duty arising
from the allegation that defendant deprived plaintiff of his right to 12.5% of
profits under a general partnership agreement to develop a “cannabis business”—rather
than a 12.5% interest in the entity West Coast Development California, LLC,
specifically. This claim also arises
from facts and theories not previously alleged.
It would greatly expand the potential damages. Defendants have had no opportunity to prepare
for trial on this new cause of action.
Plaintiff’s delay has also
prejudiced defendants because he filed this motion on the eve of trial. Seeking leave to amend a pleading shortly
before trial can cause prejudice. (Magpali
v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 487.) The trial is two days after this hearing. Allowing the proposed amendment would
necessitate another substantial trial continuance and reopening discovery. Unless the court does so, defendants would be
prohibited from investigating the new causes of action and from challenging
them either by demurrer or motion for summary adjudication.
Disposition
The motion is denied.