Judge: Curtis A. Kin, Case: 21STCV33333, Date: 2022-09-08 Tentative Ruling

Case Number: 21STCV33333    Hearing Date: September 8, 2022    Dept: 72

MOTION FOR LEAVE TO FILE CROSS-COMPLAINT

Date:               9/8/22 (8:30 AM)

Case:               Invincible Holdings, LLC v. Anibal Mejia (21STCV33333)

TENTATIVE RULING:

Defendant Anibal Mejia’s Motion for an Order Seeking Leave of the Court to File a Cross-Complaint is GRANTED.

Defendant Anibal Mejia seeks leave to file a cross-complaint against Danny Abdelmalak and Invincible Holdings, LLC.

In the proposed Cross-Complaint, defendant alleges that Abdelmalak exploited his position as defendant’s employer of 17 years to coerce defendant to sign the Operating Agreement for Gold Benzo Alliance, LLC (“Gold Benzo”). (Proposed X-Compl. [“XC”] ¶¶ 17, 22-24.) Defendant discovered that the Operating Agreement did not comply with the equity share provisions of the Social Equity Program, under which Gold Benzo applied for a cannabis license. (XC ¶ 28.) When defendant told Abdelmalak what he discovered, Abdelmalak falsely stated that the Operating Agreement had been updated. (XC ¶ 30.)      Defendant served a notice of social equity violations to Abdelmalak, including a restriction of defendant’s voting rights, control, and ownership of Gold Benzo. (XC ¶ 32.) The issues remain unresolved. (XC ¶ 37.)

Defendant’s proposed claims are compulsory because they arise out of defendant and Abdelmalak’s formation and operation of Gold Benzo Alliance, LLC. (See CCP §426.10(c) [“ ‘Related cause of action’ means 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.”]; FAC ¶¶ 55, 60, 61 [alleged breach of fiduciary duties by defendant impairing ability of Gold Benzo to obtain a license]; ¶¶ 62-64 [breach of contractual duties by defendant to pay 51% of expenses].)

Plaintiff Invincible Holdings, LLC argues that defendant did not seek leave to file a Cross-Complaint until months after the Answer was filed on October 8, 2021. However, plaintiff fails to show substantial evidence of bad faith which would warrant the denial of the filing of the proposed Cross-Complaint. (Silver Organization, Ltd v. Frank (1990) 217 Cal.App.3d 94, 99 [“A motion to file a cross-complaint at any time during the course of the action must be granted unless bad faith of the moving party is demonstrated where forfeiture would otherwise result”].)

A trial continuance is currently not necessary. Because trial is currently set for April 3, 2023, plaintiff has time to conduct any necessary discovery regarding the causes of action in the Cross-Complaint.

The motion is GRANTED. Defendant Anibal Mejia is ordered to file the Cross-Complaint as proposed in the motion within two (2) court days of this ruling.