Judge Daniel M. Crowley, Case Number: 19STCV45931, Date: 2024-01-30 Tentative Ruling

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Plaintiff Right Brothers Management, LLC’s motion for leave to file a fifth amended complaint is granted. Plaintiff may file the proposed fifth amended complaint with the Court.

Defendants’ 1/19/24 request for judicial notice of the Complaint; First Amended Complaint; Second Amended Complaint; Third Amended Complaint; Fourth Amended Complaint; Request for Dismissal dated August 24, 2021; Request for Dismissal dated October 13, 2022; and Request for Dismissal dated March 21, 2023, is denied, as this Court does not need to take judicial notice of filings on the instant docket.

Plaintiff filed its Complaint on December 20, 2019. Plaintiff filed its First Amended Complaint (“FAC”) on August 12, 2020. The parties later stipulated to allow Plaintiff to file a Second Amended Complaint (“SAC”), which Plaintiff filed on November 19, 2020. Plaintiff filed a Third Amended Complaint (“TAC”) on May 18, 2021. On April 5, 2023, Plaintiff filed a Fourth Amended Complaint (“4AC”) by stipulation of the parties.

Plaintiff filed the instant motion for leave to amend on January 9, 2024. Defendants Joao Silverstein (“Silverstein”), Mehran Agazaryan aka Mike Agazaryan (“Mike”), Ara Baljian aka Eric Baljian (“Eric”), Davo Agazaryan aka David Agazaryan (“David”), BMI Group Inc. (“BMI”), Ocean Hye, LLC (“Ocean Hye”), and Meir Abramov (“Abramov”) (collectively, “Defendants”) filed their opposition on January 19, 2024. Plaintiff filed its reply on January 24, 2024.

“The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect; and may, upon like terms, enlarge the time for answer or demurrer. The court may likewise, 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.” (C.C.P. §473(a)(1).)

“Trial courts are vested with the discretion to allow amendments to pleadings ‘in furtherance of justice.’ That trial courts are to liberally permit such amendments, at any stage of the proceeding, has been established policy in this state since 1901.” (Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 488-489.)

CRC Rule 3.1321(a) requires that a motion to amend must: “[i]nclude a copy of the proposed . . . amended pleading . . . [and] state what allegations in the previous pleading are proposed to be [deleted and/or added], if any, and where, by page, paragraph, and line number, the [deleted and/or additional] allegations are located.”

CRC Rule 3.1324(b) provides, as follows: “[a] separate declaration must accompany the motion and must specify: (1) [t]he effect of the amendment; (2) [w]hy the amendment is necessary and proper; (3) [w]hen the facts giving rise to the amended allegations were discovered; and (4) [t]he reasons why the request for amendment was not made earlier.”

Plaintiff’s motion substantially complies with CRC Rule 3.1324(a). The motion includes a copy of the proposed 5AC. (Notice of Motion, Exh. A.) Plaintiff’s motion sets forth the allegations proposed to be added and deleted, and where, by page, paragraph, and line number, the proposed additions/deletions are located by attaching a redline, which substantially satisfies this requirement. (Notice of Motion, Exh. B; CRC Rule 3.1324(a)(3).)

Plaintiff’s motion substantially complies with CRC Rule 3.1324(b). Plaintiff submitted a separate declaration of its counsel that specifies the effect of the amendments and explains why the amendments are necessary and proper. (Decl. of Minkler ¶¶3-4.) Plaintiff asserts the amendments are necessary because they relate to the same set of facts that gave rise to the original Complaint in this action, and the disputes raised by these amendments should be resolved in this matter. (Decl. of Minkler ¶12.) Plaintiff asserts the proposed 5AC does not add any claims but adds allegations to support an additional theory of recovery for the existing claims of fraudulent inducement, intentional misrepresentation, negligent misrepresentation, breach of contract, breach of fiduciary duty, and unfair competition. (Decl. of Minkler ¶3.)

Plaintiff’s counsel states when the facts giving rise of the amended allegations were discovered and why the request for amendment was not made earlier. Plaintiff’s counsel declares, “Plaintiff learned of the facts supporting the new allegations in discovery conducted after the [4AC] was filed. Plaintiff brings this motion shortly after the information was discovered, shortly after Defendants raised objections to the allegations being outside the scope of the pleadings, and after attempts to obtain a stipulation from Defendants to permit the amendments.” (Decl. of Minkler ¶13.)

Defendants argue none of the allegations are new facts and there is no explanation for Plaintiff’s failure to present new facts earlier. (Opposition, pgs. 4-6; Decl. of Schwettmann ¶9.) Defendants argue they will be prejudiced by this Court granting leave to amend because instead of focusing on trial documents, they will be forced to oppose this motion and since the inception of this action, they have prepared the defense for their case based on the allegations in the prior pleadings and targeted discovery to those allegations as well as settlement discussion. (Opposition, pg. 9.)

The Court notes Defendants’ arguments on the timing of the motion and the impending trial date currently set for February 20, 2024. However, the policy favoring amendment is so strong that denial of leave to amend can rarely be justified: “If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend and where the refusal also results in a party being deprived of the right to assert a meritorious cause of action or a meritorious defense, it is not only error but an abuse of discretion.” (Morgan v. Superior Court (1959) 172 Cal.App.2d 527, 530, emphasis added; see Mabie v. Hyatt (1998) 61 Cal.App.4th 581, 596 [citing text]; Bettencourt v. Hennessy Industries, Inc. (2012) 205 Cal.App.4th 1103, 1111 [abuse of discretion to deny leave to amend when there is a “reasonable possibility” that defect can be cured].)

Based on the foregoing, Plaintiff’s motion for leave to file a 5AC is granted.

Plaintiff’s motion for leave to amend is granted. Plaintiff may file the proposed 5AC with the Court.

Hon. Daniel M. Crowley

Judge of the Superior Court