Judge: Armen Tamzarian, Case: 23STCV18814, Date: 2025-01-14 Tentative Ruling
Case Number: 23STCV18814 Hearing Date: January 14, 2025 Dept: 52
Tentative Ruling:
Cross-Defendant
Azul Vision, Inc.’s Motions to Set Aside Defaults
Cross-defendant Azul Vision, Inc. (Azul) moves to
set aside the defaults entered against as to two cross-complaints. Cross-complainant Blue Cross of California
dba Anthem Blue Cross filed a notice of non-opposition stating it agrees to set
aside Azul’s default. Cross-complainant
Accountable Health Care IPA (Accountable) opposes Azul’s motion.
Azul argues its default should be set aside because
Accountable filed a first amended cross-complaint after the default. A defendant’s default is vacated when the
plaintiff materially amends the complaint against it. (Greenup v. Rodman¿(1986) 42 Cal.3d
822, 830; Airs Aromatics, LLC v. CBL Data Recovery Technologies, Inc.¿(2018)
23 Cal.App.5th 1013, 1025.) “An amended
complaint makes material changes when it increases the damages sought, or adds
or changes a cause of action based on a different factual or legal theory.
[Citations.] Based on the policies underlying the rule, ‘the test
for what is and is not a [material or] “substantive change” should focus on
whether the [change] might give rise to any different amount or form of
liability, or indicate the existence of any defense or ground for avoiding
liability, not reasonably disclosed in the original complaint.’ [Citations.]
Under this test, a change is material if the change would have impacted a
reasonable defendant's consideration of whether to contest the claims or to
default.” (Paterra v. Hansen (2021) 64 Cal.App.5th 507, 530 (Paterra).)
Accountable’s first amended cross-complaint
materially amended the claims against Azul in at least two ways.
First, Accountable added the following factual
allegations: “Azul Vision has asserted that it told Plaintiff that his
insurance was not accepted at Chevy Chase because this is what Chevy Chase told
Azul Vision. Such a representation by
Chevy Chase to Azul Vision would have been incorrect, and a misrepresentation.” (FACC, ¶ 7.)
These new allegations are material because they indicate the existence
of a potential defense or ground for avoiding liability not disclosed in the
original complaint: that Chevy Chase’s misrepresentation proximately caused the
injuries to plaintiff Marcelino Diaz.
Second, Accountable changed the allegations as
follows: The initial cross-complaint alleged, “Azul and Accountable entered
into a written agreement wherein Azul agreed to provide services to patients in
Accountable’s network. … Azul Vision
expressly promised to defend, indemnify and hold harmless Accountable from any
claims and liabilities arising out of its work under the contract.” (Cross-Comp., ¶¶ 9-10.) The first amended cross-complaint instead
alleges, “Cross-Defendants entered into a written agreement(s) with Accountable
wherein they agreed to provide services to patients in Accountable’s network. … Cross-Defendants expressly promised to
defend, indemnify and hold harmless Accountable from any claims and liabilities
arising out of its work under the contract(s).”
(FACC, ¶¶ 13-14.) These
amendments are again material because they indicate a potential defense or
ground for avoiding liability by blaming the other cross-defendants. And, though the initial cross-complaint
included fictitious cross-defendants Moes 1-25, it did not allege they were
liable on the first or second causes of action.
(Cross-Comp., pp. 3-4.)
Accountable argues, “Cross-Defendant’s liability and
exposure are not increased by the amendment and may, in fact, be reduced due to
the identification of additional parties.”
(Opp., p. 4.) That means the
amendments “ ‘indicate the existence of any defense or ground for avoiding
liability.’ ” (Paterra, supra, 64
Cal.App.5th at p. 530.)
Accountable also contends Paterra does not
apply because it “rel[ies] upon the failure of plaintiffs to serve a defaulting
defendant after a material amendment.”
(Opp., p. 3.) The principle applied
in Paterra is that, if an amendment is material, the prior default
cannot stand. That is why the plaintiff
must re-serve the formerly defaulted defendant in the manner of a summons (Engebretson
& Co. v. Harrison¿(1981) 125 Cal.App.3d 436, 444), not just via mail or
e-mail, as occurred here. That Azul does not contest service of the first
amended cross-complaint is irrelevant. If
the amendment were immaterial, Azul’s default would stand and preclude Azul
from responding to the amended pleading regardless of any defect in serving it.
Accountable further relies on San Diego Sav. Bank
v. Goodsell (1902) 137 Cal. 420 for the proposition that adding new parties
does not constitute a material amendment in some cases. That case was an appeal of default judgment
in an “action to foreclose a mortgage.”
(Id. at p. 421.) “The
amendment was for the sole purpose of” adding new defendants, “alleging that
they ‘claim or have some interest in the mortgaged premises, but that all of
said claims are subordinate to plaintiff’s mortgage.’ ” (Id. at pp. 425–426.) The California Supreme Court reasoned, “The
nature of [a partition] action makes the bringing in of a new party matter of
substance. But not necessarily so in
foreclosure. There is nothing in the
record to show that appellant Littlefield was in any way interested in or
affected by the appearance of these new parties in the case. We do not think the amendment was as to her in
matter of substance, and service on her was unnecessary.” (Id. at p. 426.)
In a foreclosure action, adding other parties with
interests in the property did not materially affect the relevant defendant. Foreclosure would extinguish Littlefield’s
interest in the subject real property, so adding other defendants to also extinguish
their interests did not materially affect Littlefield. In contrast, Accountable’s cross-claims for
indemnity seek a money judgment or other relief resulting in the right to
recover money from Azul. Adding new
parties, particularly when alleging one of them made “a misrepresentation” to
Azul (FACC, ¶ 7) creates a possibility for Azul to minimize or eliminate Accountable’s
claims against it by blaming other cross-defendants. In this context, the amendments are material.
Disposition
Cross-defendant Azul Vision, Inc.’s motion to set
aside its default as to cross-complainant Blue Cross of California dba Anthem
Blue Cross is granted. The court
hereby sets aside that default.
Cross-defendant Azul Vision, Inc. must respond to Blue Cross’s first
amended cross-complaint within 15 days.
Cross-defendant Azul Vision, Inc.’s motion to set
aside its default as to cross-complainant Accountable Health Care IPA is granted. The court
hereby sets aside that default.
Cross-defendant Azul Vision, Inc. must respond to Accountable Health
Care IPA’s first amended cross-complaint within 15 days.
Tentative Ruling:
Defendant
Blue Cross of California dba Anthem Blue Cross’s Motion for Protective Order
Defendant Blue Cross of California dba Anthem Blue
Cross moves for a protective order to postpone numerous depositions noticed by
plaintiff Marcelino Diaz.
A party or deponent may move for a protective order
“that justice requires to protect” him or her “from unwarranted annoyance, embarrassment,
or oppression, or undue burden and expense.” (Code Civ. Proc., § 2025.420, subd. (b).) Protective orders may include one “[t]hat the
deposition be taken at a different time.” (Id., subd. (b)(2).) Generally, “the burden is on the party
seeking the protective order to show good cause for whatever order is sought.” (Fairmont Ins. Co. v. Superior Court
(2000) 22 Cal.4th 245, 255.)
Defendant shows good cause for a protective order
postponing depositions. Generally, “[o]nce
any party has taken the deposition of any natural person, including that of a
party to the action, neither the party who gave, nor any other party who has
been served with a deposition notice pursuant to Section 2025.240 may take a
subsequent deposition of that deponent.”
(Code Civ. Proc., § 2025.610, subd. (a).) A newly added party, however, “may notice
another deposition.” (Code Civ. Proc., §
2025.290, subd. (b)(6).)
The cross-complainants recently named several new
cross-defendants. Some of them have yet
to respond to the claims against them.
Others have filed demurrers, which are set to be heard in February. Proceeding with depositions now is likely to
result in undue burden and expense arising from duplicative depositions. Postponing all depositions will serve the
interest of judicial economy. Plaintiff
does not articulate a sufficient reason he needs to take these depositions as
soon as possible or before his proposed deadline of February 14. (Opp., p. 2.)
Defendant seeks an order requiring all depositions
to be scheduled at least 30 days after all cross-defendants have appeared. Rather than doing so, the court will exercise
its discretion to specify the date on which the parties may begin to depose
witnesses.
Disposition
Defendant Blue Cross of California dba Anthem Blue
Cross’s motion for protective order is granted. The court
hereby orders that no depositions shall be held until February 21, 2025. This order applies to the date of the deponents’
testimony, not the date of serving the notice of deposition.