Judge: Bruce G. Iwasaki, Case: BC711642, Date: 2023-04-06 Tentative Ruling

Case Number: BC711642    Hearing Date: April 6, 2023    Dept: 58

Judge Bruce G. Iwasaki

Hearing Date:             April 6, 2023

Case Name:                Margaret A. Delis, et al. v. Montecito Financial Services, Inc., et al. 

Case No.:                    BC711642 

Matter:                        Motion for leave to amend to file first amended answer

Moving Parties:          RH&A Defendants

Responding Parties:   Plaintiffs Dean C. Delis, Margaret Delis, Drew Delis, Delakis LP, and                                                            DMD Investments, LLC

            On March 13, 2023, the Robert Hall & Associates group of Defendants moved for permission to amend their Answer to add two new affirmative defenses based on the statute of frauds and usury. That matter is set for hearing on April 6, 2023.  Similarly, on March 15, 2023, the Stephen Hall Defendants moved to add nine new affirmative defenses; that motion is scheduled for April 10, 2023. 

            These motions pit important interests of the parties against each other.  Defendants assert the right to offer defenses they believe are meritorious.  Plaintiffs assert prejudice because of insufficient time to conduct discovery regarding these new defenses. (The Court recognizes that Plaintiffs also contest Defendants’ assertion that Plaintiffs have made new allegations necessitating new defenses; Plaintiffs further contend that the proposed amendments are futile.)  Also, the two motions should be resolved together.  All of this comes when the trial is scheduled to begin in one month. 

            The Court’s duty is to manage this case in a matter that facilitates a fair trial, efficiently conducted.  At the hearing, the Court will entertain suggestions and proposals from counsel to minimize prejudice and maximize efficiency regarding these matters.  Given the number of witnesses and the parties’ time estimates, this matter will be transferred to the Court’s Long Cause department.  Therefore, the Court will entertain the parties’ suggestions, and would welcome any stipulations on:  (1) a later date for trial, and (2) a stipulated date by which the trial must commence to avoid mandatory dismissal. The Court assumes the latter date should be at least six months after the trial date.  Those two dates are necessary, in the Court’s view, to permit adequate time for discovery on the newly asserted affirmative defenses. The Court is mindful that discovery will also be proceeding regarding Defendants’ financial conditions.  The continuation of the trial date would not otherwise create new deadlines.

With such an agreement, the Court would entertain ground rules for the conduct of discovery regarding affirmative defenses – and preclude discovery on any other topic.  The Court envisions that as a condition for granting the motions to amend the Answers, setting a date by which Plaintiff propounds written discovery and deposition notices.  Similarly, Defendants would have specific deadlines for production of documents, responding to interrogatories, and producing witnesses for depositions.  The Court will consider capping the number of deponents and the length of each deposition, and limiting deposition objections solely to privilege and work product, and otherwise reserving objections to the time of trial.  The Court seeks to permit focused discovery on the proposed affirmative defenses, not reopen general discovery anew.

Code of Civil Procedure section 473, subdivision (a)(1) provides, in relevant part: “The court may … 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 Court seeks to fashion “terms as may be just” to permit the parties to augment their pleadings while allowing focused and reasonable discovery regarding the newly asserted pleadings.  The Court will consider the proposals and arguments of counsel; it intends to issue orders after hearing them. 

The Court has been impressed by the skill and professionalism of all counsel, and would encourage, before the April 6 hearing, that they communicate to seek agreement on aspects of a comprehensive order that permits Defendants to amend their Answers, gives Plaintiffs reasonable time to conduct discovery on those newly asserted defenses, and gives everyone time to complete these tasks before trial.