Judge Christian R. Gullon, Case Number: 23PSCV01756, Date: 2024-09-24 Tentative Ruling

Judge: Christian R. Gullon, Case: 23PSCV01756, Date: 2024-09-24 Tentative Ruling

MOTION FOR AN ORDER SEEKING LEAVE OF THE COURT TO FILE CROSS-COMPLAINT AGAINST PLAINTIFFS is GRANTED.

This is a contracts case. Plaintiffs Tuyet Bach Ma Luong and Vinh Q. Luong allege the following against Defendant Thanh Thi Kim Thach: In June 2018, the parties entered into an agreement wherein Plaintiffs loaned Defendant $488,000.00; repayment was due by June 5, 2021. Defendant refuses to pay back the money.[1]

On December 11, 2023, Plaintiff (who was pro per at the time of filing the answer) filed a Substitution of Attorney naming Roman Vu as counsel.

On September 16, 2024, Defendant filed an ‘Objection to Plaintiff’s Untimely Opposition to Defendant’s Motion for Leave of Court to File Cross-Complaint Against Plaintiffs.’[2]

Generally, a party must 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. (Code Civ. Proc., § 428.50(a).) Defendant's cross-complaint is compulsory if the cause of action “arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause of action … in [the] complaint.” Code Civ. Proc., § 426.10(c).) Causes of action arise out of the “same transaction or occurrence” if the factual or legal issues are logically related. They need not be identical. (ZF Micro Devices, Inc. v. TAT Capital Partners, Ltd. (2016) 5 Cal.App.5th 69; Heshejin v. Rostami (2020) 54 Cal.App.5th 984, 993-994.) The term ‘transaction’ is to be broadly construed (Ibid.)

The court may grant leave to file a cross-complaint if the failure to plead a cause of action was the result of oversight, inadvertence, mistake, neglect, or other cause. (Code Civ. Proc., § 426.50.) “The court, after notice to the adverse party, shall grant, upon such terms as may be just to the parties, leave to amend the pleading, or to file the cross-complaint, 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.” (Id, emphasis added)

Defendant moves for leave to file a cross-complaint on the grounds that Plaintiffs are contradicting themselves by stating that the loan amount is $488,000 when the original loan amount is $168,445. (Motion p. 3.) With that, Defendant seeks to assert the following causes of action (COAs) against Plaintiffs: Fraud, Intentional Misrepresentation, Negligent Misrepresentation, and Declaratory Relief.[3] Defendant did not assert the COAs earlier because Defendant was pro per.

In opposition, Plaintiffs argue the motion is untimely because (1) a pro per status does not absolve a defendant of her responsibility to comply with court procedures and (2) it took Defense Counsel about 9 months to file the cross-complaint.

Here, while Plaintiffs’ arguments are valid, they are not strong enough to overcome the near lack of discretion this court has on such motions. Courts at best have only a “modicum of discretion” in denying leave to file a compulsory cross-complaint. (Gherman v. Colburn (1977) 72 Cal.App.3d 544, 559.) Should the court deny the motion to file a cross-complaint, it must be supported by “substantial evidence” (Silver Orgs. V. Frank (1990) 217 Cal.App.3d 94, 99), evidence which is “of ponderable legal significance, …reasonable in nature, credible, and of solid value.” (Ibid, quoting Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873.) The legislative mandate is clear: “[t]he objective, of course, is to encourage trial on the merits whenever possible.” (Foot’s Transfer & Storage Co. v. Superior Court (1980) 114 Cal.App.3d 897, 901.) And here, there is no showing of bad faith.

[1] The contract was entered in Vietnam and a certified translator has translated the notarized written agreement which is attached as Exhibit A to the complaint.

[2] The objection is not a reply as it does not address the points raised in opposition. Defendants argue that even though the motion was filed on 9/11, which is 9 court days before the hearing, it is untimely by four days because the opposition was sent via mail, which carries an additional five days’ notice. Considering (i) the technicality, (ii) the opposition was not grossly untimely, (iii) Defendant’s failure to address the merits of the opposition, and (iv) the lack of prejudice by considering the opposition, the court overlooks the untimeliness. Lastly, it is unclear how the failure to file a timely opposition warrants sanctions and attorney fees against Plaintiffs. (Defendants’ Objection p. 3:4-8.)

[3] A review of the proposed cross-complaint provides more detail than presented in the motion. Defendant alleges that he never received the loan amount. In fact, Defendant discussed with Tuyet that he did not intend on going forward with the loan agreement and that Tuyet orally agreed that the loan agreement would be cancelled. (Motion, Ex. B, p. 35 of 74 of PDF [Proposed Cross-Complaint, p. 4].)