Judge Barbara M. Scheper, Case Number: 22STCV13388, Date: 2024-05-15 Tentative Ruling

Judge: Barbara M. Scheper, Case: 22STCV13388, Date: 2024-05-15 Tentative Ruling

Case Number: 22STCV13388 Hearing Date: May 15, 2024 Dept: 30

GUILD GC, INC. vs MILGARD MANUFACTURING, LLC

TENTATIVE

Defendant Milgard Manufacturing, LLC Motion for Leave to File Amended Answer is GRANTED as to the affirmative defense for “warranty not part of basis of bargain,” and is otherwise DENIED. Leave to amend, as indicated, is granted for 10 days from date of this order.

Moving party to give notice.

DISCUSSION

Code Civ. Proc. section 473 subd. (a)(1) states that:

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.

“The trial court has discretion to permit or deny the amendment of the complaint, but instances justifying the court's denial of leave to amend are rare.” (Armenta ex rel. City of Burbank v. Mueller Co. (2006) 142 Cal.App.4th 636, 642.)

“Although courts are bound to apply a policy of great liberality in permitting amendments to the complaint at any stage of the proceedings, up to and including trial [Citations], this policy should be applied only ‘[w]here no prejudice is shown to the adverse party . . .’ [Citation.] A different result is indicated ‘[w]here inexcusable delay and probable prejudice to the opposing party’ is shown. [Citation.]” (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 487.)

Pursuant to California Rule of Court Rule 3.1324, “[a] motion to amend a pleading before trial must: (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.”

Such a motion must include a supporting declaration stating, “(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.” (CRC Rule 3.1324, subd. (b).)

Defendant Milgard Manufacturing, LLC (Defendant) seeks leave to add 56th, 57th, and 58th affirmative defenses to an amended answer, respectively for the “bulk supplier doctrine,” “warranty not part of basis for bargain,” and the “sophisticated user doctrine.” (Motion at pp. 3–4.) Defendant argues that the basis for these affirmative defenses was discovered in conducting depositions of the affected homeowners, who testified concerning their lack of knowledge of the warranties at issue. (Motion at pp. 6–7.) Defendant also argues that the sophisticated user doctrine became at issue when Plaintiff Guild GC, Inc.’s (Plaintiff) person most knowledgeable testified to Plaintiff’s sophisticated understanding of the block frame aluminum windows at issue in this case. (Motion at p. 7.)

Plaintiff argues in opposition that the proposed defenses fail as a matter of law, because the bulk supplier doctrine and sophisticated user doctrine are applicable to failure-to-warn actions based on products liability, whereas the present action is based on breach of warranty and negligence. (Opposition at pp. 6–7.) Plaintiff further argues that the affirmative defense based on the absence of homeowner reliance cannot prevail because reliance is not necessary to prevail on a claim for breach of warranty. (Opposition at pp. 7–8.) Plaintiff argues that the new affirmative defenses are not stated with sufficient factual detail. (Opposition at p. 8.) Finally, Plaintiff argues that Defendant has unreasonably delayed seeking the amendment, as it has been deposing the homeowners for ten months, and had knowledge of Plaintiff’s sophistication and its own status as a bulk-supplier from the outset of this case. (Opposition at pp. 9–10.)

Defendant may amend its answer to add the 57th affirmative defense for “warranty not part of basis of bargain,” because Defendant has presented good cause as to why this defense was not presented earlier. Specifically, the depositions of the homeowners involved in this case have been ongoing for a number of months, and 11 out of 12 of the affected homeowners’ depositions were completed as of April 11, 2024. (Hazen Decl. ¶ 6.) Although Plaintiff argues that the first homeowner depositions began ten months ago (Opposition at p. 9), there is little basis to suggest that amendment ought to have been sought the moment the first homeowner indicated a lack of reliance. Leave to amend is generally granted with “great liberality.” (Magpali, supra, 48 Cal.App.4th at p. 487)

No leave to amend is proper, however, for the proposed 56th and 58th affirmative defenses, based on the bulk supplier and sophisticated user doctrines. Defendant identifies no basis for its failure to discover its own status as a bulk supplier until the present time. And more importantly, the defenses are themselves doctrinally attached to — and pleaded as — defenses to failure to warn claims which have not been alleged here. (See Proposed Answer at pp. 16–17; CACI 1244 [Sophisticated User Defense]; see Webb v. Special Electric Co., Inc. (2016) 63 Cal.4th 167, 184 [discussing bulk supplier doctrine as a defense against product’s liability claims].) Such claims are not alleged here, and leave to amend “should not be granted where . . . amendment would be futile.” (Sandler v. Sanchez (2012) 206 Cal.App.4th 1431, 1437, italics in original.)

Defendant argues that“[t]he preferable practice [is] 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 (1989) 213 Cal.App.3d 1045, 1048; Opposition at p. 4, citing same.) But Defendant does not offer any argument to support the sufficiency, or even the applicability, of these defenses to the claims actually alleged against it here. Although Defendant notes that Plaintiff’s PMK testified to the absence of installation instructions (Reply at p. 4), this testimony is a far cry from alleging a claim based on failure to warn to which either of these affirmative defenses could attach.

But Plaintiff’s similar argument that the 57th affirmative defense, based on the reliance of the homeowners does not furnish a basis to deny the motion as to that claim. (Motion at pp. 7–8.) Here, the ordinary rule of permitting amendment to allow test by dispositive motion is properly applied. This is because, first, this defense is addressed to warranty claims, which are at issue in Plaintiff’s complaint. And second, the issues presented in Plaintiff’s opposition and Defendant’s reply present an issue of sufficient complexity such that its resolution ought to await a more complete treatment by the appropriate motion. (Reply at pp. 4–7.)

Plaintiff cites the necessity of such a motion, along with the discovery to be conducted on the defenses, as prejudice justifying denial of leave to amend. (Opposition at pp. 8–9.) Trial is currently set for July 16, 2024. And Plaintiff represents that it is likely to challenge the 57th affirmative defense by demurrer or otherwise. However, Plaintiff has offered no details as to the discovery that this defense is likely to occasion beyond that which has already been conducted. And if this defense is vulnerable to challenge on the pleadings, then Plaintiff itself could have alleviated much of its own prejudice by stipulating to amend prior to filing the present motion, which would have allowed more time for dispositive motions to be heard. The prejudice identified is not sufficient, in light of the reasons offered for the delay in seeking leave to amend, to justify denying that leave as to the 57th affirmative defense.

Accordingly, the motion is GRANTED as to the affirmative defense for “warranty not part of basis of bargain,” and is otherwise DENIED.