Judge Bruce G. Iwasaki

Department 58

Hearing Date: April 29, 2024

Case Name: Skyland Construction and Remodeling Co.,v. Chia

Case No.: 23STCV05897

Matter: Motion for Leave to File Cross-Complaint

Moving Party: Defendant Terrisa Chia

Responding Party: None

Tentative Ruling: The Motion for Leave to File a Cross-Complaint is granted.

This action arises out of a construction dispute. On March 16, 2023, Plaintiff Skyland Construction and Remodeling Co. filed a Complaint for (1.) breach of contract, (2.) foreclosure of Mechanics Lien, and (3.) quantum meruit. The Complaint alleges that Defendant Terrisa Chia failed to pay amounts owed for construction services performed by Plaintiff in the amount of $103,448.40.

On March 21, 2024, Defendant Terrisa Chia moved to file a Cross-Complaint. No opposition was filed.

The Court will grant the motion for leave to file a Cross-Complaint.

Legal Standard

Code of Civil Procedure section 428.50 provides as follows:

“(a) 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.

(b) Any other cross-complaint may be filed at any time before the court has set a date for trial.

(c) A party shall obtain leave of court to file any cross-complaint except one filed within the time specified in subdivision (a) or (b). Leave may be granted in the interest of justice at any time during the course of the action.”

Under the statutory scheme, “[s]ubdivision (a) addresses compulsory cross-complaints, those related to the subject matter of the underlying complaint which exist at the time of service of the answer to the complaint on the particular plaintiff.” (City of Hanford v. Superior Court (1989) 208 Cal.App.3d 580, 586–587; see also Code Civ. Proc. § 426.30, subd. (a).)

Code of Civil Procedure section 428.10 governs permissive cross-complaints. It provides in relevant part: “A party against whom a cause of action has been asserted ... may file a cross-complaint setting forth [¶] ... [¶] (b) Any cause of action he has against a person alleged to be liable thereon, whether or not such person is already a party to the action, if the cause of action asserted in his cross-complaint (1) arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause brought against him.” (Code Civ. Proc., § 428.10, subd. (b).)

Discussion

Defendant moves for leave to file a Cross-Complaint pursuant to Code of Civil Procedure sections 428.50.

The Cross-Complaint alleges Plaintiff used defective materials and failed to perform construction in workmanlike manner; as a result, Defendant Chia was forced to hire other contractors to finish and fix the defective work performed by Plaintiff, as well as perform remediation of mold damage. The Cross-Complaint contains causes of action for (1.) breach of contract, (2.) breach of good faith and fair dealing, (3.) negligence, (4.) negligent misrepresentation, (5.) intentional misrepresentation, and (6.) financial elder abuse.

In support of this motion, Defendant contends that filing this Cross-Complaint will not prejudice Plaintiff as trial is not set until June 30, 2025; as such, there will be ample time to take discovery on these new cross-claims and for Plaintiff to prepare a defense. (Greenstein Decl., ¶¶ 5-6.) Further, it will save judicial resources to try these claims together given the overlapping witnesses and evidence between the operative complaint and the Cross-Complaint.

Here, there can be no dispute that the Cross-Complaint arises out of the subject matter of Plaintiff’s operative pleading based upon facts that existed at the time of the Complaint. Thus, the Cross-Complaint contains “related causes of action” and the Cross-Complaint must be treated as a compulsory cross-complaint. (See Code Civ. Proc., § 426.10, subd. (c) [The phrase “related cause of action” is defined as “a cause of action which arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause of action which the plaintiff alleges in his complaint.”]; Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 960 [Relatedness “ ‘requires “not an absolute identity of factual backgrounds for the two claims, but only a logical relationship between them.”].)

Thus, a trial court must allow a party to file a compulsory cross-complaint unless that party has acted in bad faith. (Silver Organizations Ltd. v. Frank (1990) 217 Cal.App.3d 94, 98.) “Factors such as oversight, inadvertence, neglect, mistake or other cause, are insufficient grounds to deny the motion unless accompanied by bad faith.” (Id. at p. 99.) “ ‘Bad faith’ is defined as ‘[t]he 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.’ ” (Pugh v. See's Candies, Inc. (1988) 203 Cal.App.3d 743, 764.)

In the absence of an opposition, there is no evidence of bad faith. Thus, the Court must grant the motion for leave to file a Cross-Complaint. The law is clear that a party may request to file a compulsory cross-complaint “at any time during the course of the action” (Code Civ. Proc., § 426.50 [italics added]), and a court “shall grant, upon such terms as may be just to the parties, leave to ... file the cross-compliant, to assert such cause if the party who failed to plead the cause acted in good faith. This subdivision shall be liberally construed to avoid forfeiture of causes of action.” (Code Civ. Proc., § 426.50 [italics added].)

Conclusion

In sum, the motion for leave to file a cross-complaint is granted. Defendant shall file and serve the Cross-Complaint attached as Exhibit A to the Greenstein declaration within three (3) court days.