Department 58

Hearing Date: April 19, 2023

Case Name: Cald Holdings, LLC v. Richard Madokoro, et al.

Case No.: 2STCV24865

Motions: (1) Defendant Steve Najera’s Motion Seeking Leave to File an Amended Verified Answer to the Complaint; (2) Plaintiff Cald Holdings LLC’s Motion to Strike Non-Verified Answer and Affirmative Defenses of Defendant Edwin Steve Najera, a/k/a E. Steve Najera; and (3) Plaintiff Cald Holdings LLC’s Demurrer to Cross-Complaint of Edwin Steve Najera, a/k/a E. Steve Najera

Moving Party: (1) Defendant Steve Najera; (2) Plaintiff Cald Holdings LLC; and (3) Plaintiff Cald Holdings LLC

Responding Party: (1) Plaintiff Cald Holdings LLC; (2) Defendant Steve Najera; and (3) Defendant Steve Najera

Tentative Ruling: (1) Grant; (2) Deny; and (3) Overrule as moot.

Background

This is a business and real estate investment fraud case. Plaintiff Cald Holdings LLC (“Plaintiff”) alleges it was defrauded out of millions of dollars in connection with certain business and real estate investments. On August 2, 2022, Plaintiff filed a verified complaint against Defendants Richard Madokoro, also known as Richard Yukio Madokoro, an individual, doing business as Crown Point Group, Edwin Steve Najera, also known as E. Steve Najera, Abel Aureliano Galvez Carrillo, also known as Aurie Galvez, and Anastasia Prakherenka, alleging causes of action for breach of contract, promissory estoppel, unjust enrichment, fraud, conspiracy to commit fraud, conversion, conspiracy to commit conversion, breach of fiduciary duty, professional negligence, and violation of Business and Professions Code section 17200 et seq. On December 19, 2022, Defendant Edwin Steve Najera (“Defendant” or “Najera”) filed an answer.

On December 20, 2022, Defendant Najera filed a cross-complaint against Plaintiff and the other Defendants named above, alleging a cause of action for intentional misrepresentation. On April 10, 2023, Defendant Najera filed a request for dismissal without prejudice to the cross-complaint.

Plaintiff has a demurrer to the Najera cross-complaint and a motion to strike the unverified answer of Defendant Najera to the verified complaint. Defendant Najera has filed a motion seeking leave to file an amended verified answer to the complaint.

Discussion

Motion #1 – Najera motion for leave to amend answer

The court may, in furtherance of justice, allow a party to amend any pleading upon any terms as may be proper. (Code Civ. Proc., §§ 473, subd. (a), 576.) California courts liberally exercise discretion to permit the amendment of pleadings in light of a strong policy favoring resolution of all disputes between parties in the same action. (Nestle v. Santa Monica (1972) 6 Cal.3d 920, 939; Morgan v. Superior Court (1959) 172 Cal.App.2d 527, 530.) Accordingly, requests for leave to amend generally will be granted unless the party seeking to amend has been dilatory in bringing the proposed amendment, and the delay in seeking leave to amend will cause prejudice to the opposing party if leave to amend is permitted. (Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 490.) Absent a showing of prejudice, delay in seeking to amend, by itself, generally will not justify a denial of leave to amend. (Higgins v. Del Faro (1981) 123 Cal.App.3d 558, 564-565.) Thus, the policy favors amendment in the absence of both unexcused delay and prejudice.

A motion for leave to amend 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.

(Cal. Rules of Court, Rule 3.1324(a).)

Further, a separate declaration must accompany the motion and must specify the following:

(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.

(Id., Rule 3.1324(b).)

Plaintiff seeks leave to amend his answer to the verified complaint, which he inadvertently failed to verify. The Court finds that Plaintiff has satisfied the requirements of California Rules of Court, Rule 3.1324. Plaintiff is not adding any new allegations, but only seeking to correct the mistake of not verifying his original answer. The Court disagrees with Plaintiff’s claim that Defendant Najera is adding 15 affirmative defenses, as they were filed simultaneously, albeit separately, with the original answer. Even if that were a problem, Defendant Najera is rectifying that by including them with the proposed amended verified answer. The Court also disagrees with Plaintiff’s arguments about inexcusable delay. This case is only nine months old and Defendant Najera appeared in the case just four months ago. No prejudice will result to the Plaintiff here, as trial is currently set for October 21, 2024.

Therefore, the Court grants Defendant Najera’s motion to amend his Answer.

Motion #2 – Plaintiff’s motion to strike Najera’s unverified Answer

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.”¿ (Code Civ. Proc., § 436.) A motion to strike a pleading must be brought within the time allowed to respond to the pleading. (Id., § 436(b)(1).)

This motion has at least two bases for which it can be denied. First, the motion is untimely. A motion to strike an answer must be brought within ten days of service of the answer, i.e., the same as a demurrer to an answer. (Code Civ. Proc., § 436(b)(1); Id., § 430.40(b); Cal. Rules of Court, Rule 3.1322(b); B. Motions to Strike, Cal. Prac. Guide Civ. Pro. Before Trial Ch. 7(I)-B.) ) Defendant Najera’s answer was filed on December 19, 2022. Plaintiff brought this motion to strike on February 10, 2023, which is well after the ten-day limit. Second, the motion is moot in light of the Court’s ruling above granting Defendant Najera’s motion for leave to file an amended verified answer.

Therefore, the motion is denied.

Motion #3 – Cald Holding’s demurrer to the Najera Cross-Complaint

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . ..” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.)

Defendant Najera has dismissed the cross-complaint. (Request for Dismissal, (4/10/2023).) Accordingly, Plaintiff’s demurrer is moot and is denied on that basis.

Conclusion

The Court grants Defendant Najera’s motion for leave to file an amended verified answer. Defendant Najera is ordered to file and serve the proposed amended verified answer within ten days of this order.

The Court denies Plaintiff’s motion to strike Najera’s unverified answer.

The Court overrules Plaintiff’s demurrer to the Najera cross-complaint as moot.