Judge: Barbara M. Scheper, Case: 23STCV02297, Date: 2024-03-14 Tentative Ruling

Case Number: 23STCV02297    Hearing Date: March 14, 2024    Dept: 30

Dept. 30

Calendar No.

Case Name:  United Rentals Realty, LLC v. Next Venture, Inc., et al., Case No. 23STCV02297

Tentative Ruling re:  Cross-Defendant’s Motion for Leave to File a Cross-Complaint

Cross-Defendant National Paving Company, Inc. (“National”) moves for leave to file a cross-complaint against Defendant/Cross-Complainant Next Venture, Inc. d/b/a Sierra Group (“Sierra Group”).  The motion is granted.

            A party shall file a cross-complaint against any of the parties who filed the complaint or cross-complaint against him or her before or at the same time as the answer to the complaint or cross-complaint.  (CCP §428.50(a).)  Any other cross-complaint may be filed at any time before the court has set a date for trial.  (CCP §428.50(b).)  Outside of these two time periods, a party may move for leave to file a cross-complaint and “leave may be granted in the interest of justice at any time during the course of the action.”  (CCP §428.50(c).) 

            If the proposed cross-complaint is permissive, leave of court may be granted “in the interests of justice” at any time during the course of the action.  (CCP §428.50(c).)  On the other hand, if the proposed cross-complaint is compulsory, leave must be granted so long as defendant is acting in good faith.  (CCP §426.50 (court "shall" grant leave to file a compulsory x-complaint brought in good-faith); see also Weil & Brown, Civil Procedure Before Trial, ¶6:563.)

            A compulsory cross-complaint can by definition only be against the plaintiff or the cross-complainant.  (CCP §426.50.)  A compulsory cross-complaint is one that arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause of action which plaintiffs allege in their complaint.  (CCP §§426.10(c) and 426.30(a).)

            “Bad faith, is defined as the opposite of ‘good faith,' generally implying or involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake, but by some interested or sinister motive, not simply bad judgment or negligence, but rather the conscious doing of a wrong because of dishonest purpose or moral obliquity; it contemplates a state of mind affirmatively operating with furtive design or ill will.”  (Silver Organizations Ltd. v. Frank (1990) 217 Cal.App.3d 94, 100.)

            National’s proposed cross-complaint against Sierra, the cross-complainant/plaintiff who filed a cross-complaint against National, is a compulsory cross-complaint.  (CCP §426.50.)  As such, the court must granted leave to file National’s cross-complaint against Sierra unless there is a showing of bad faith. 

            There is no evidence of bad faith.  Sierra points to National’s delay in seeking leave to file a cross-complaint relative to the date on which National filed its answer to Sierra’s cross-complaint.  National filed its answer on October 12, 2023 to Sierra’s FAXC.  National filed its motion for leave to file its cross-complaint on February 14, 2024, four months later. 

            A delay of four months is not undue, nor is there any showing of prejudice or tactical advantage as a result of the late request to file a cross-complaint.  The trial date is three months away and there is a motion to continue trial set to be heard on March 25, 2024.  Parties have just executed a stipulation to continue the trial date until early next year in 2025.  (Motion, Davidson Dec., ¶14.)  No depositions have taken place and very little discovery has been completed.  (Motion, Davidson Dec., ¶13.) 

            Counsel also provides a reasonable explanation for the delay.  (Motion, Davidson Dec., ¶12.)  Counsel did not have the full file on National when it answered the Sierra cross-complaint and he only identified facts supporting a cross-complaint against Sierra after locating the file and interviewing National’s employees.  (Motion, Davidson Dec., ¶12.) 

            In response, Sierra fails to present any evidence that would support a finding of bad faith.  The failure to timely file a cross-complaint with the answer alone is not evidence of bad faith; otherwise there would be no provision to seek leave under CCP §428.50.

            National’s motion for leave to file a cross-complaint is therefore granted.