Judge: David A. Hoffer, Case: 30-2019-113963, Date: 2022-08-29 Tentative Ruling

Defendant/Cross-Complainant The One Solution Inc.’s (“The One Solution”) Motion for Leave to File Amended Cross-Complaint is GRANTED.  (CCP § 473(a)(1).)

The One Solution is to file and serve the proposed First Amended Cross-Complaint (attached as Exhibit A to the Motion) within 3 court days.

Cross-Defendants Zenbu USA, Inc. and Paramount Realty’s Motion for order dismissing them from The One Solution’s Cross-Complaint for failure to timely amend is DENIED.

MOTION 1: Motion for Leave to File Amended Cross-Complaint

This motion originally came on for hearing on August 8, 2022.  In its ruling, the Court indicated that The One Solution had failed to comply with the procedural requirements of Rule 3.1324(a).  The Court permitted The One Solution an opportunity to submit further briefing.  (See ROA 549.)  The One Solution submitted further briefing on August 16, 2022, as requested by the Court.  Based on the moving papers and the further briefing, the Court finds that The One Solution has now complied with the procedural requirements of Rule 3.1324.

Pursuant to CCP § 473(a)(1), “[t]he 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…”

Courts are bound to apply a policy of great liberality in permitting amendments to the complaint “at any stage of the proceedings, up to and including trial,” absent prejudice to the adverse party.  (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761.)

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. Sup.Ct. (Morgan) (1959) 172 Cal.App.2d 527, 530.)

The Court finds no unreasonable delay in seeking amendment.  The One Solution’s current counsel substituted into this matter on February 14, 2022.  (ROA 456.)  This Motion was filed on April 18, 2022, which is a delay of approximately two months.  That is not unreasonable.  Further, it is fair to assume that new counsel would need some time to familiarize himself with the procedural and factual background regarding this case.

Regarding Cross-Defendants’ argument that The One Solution delayed because it failed to file an amended pleading within 10 days of the Court’s order granting Cross-Defendants’ demurrer, the Court notes that The One Solution did submit the amended pleading to the Court within the timeframe specified in the Court’s January 24, 2022 Order.  (See ROA 448, 451].)  However, the filing was rejected.  (See ROA 451; see also, Declaration of Michael S. Lee, ¶ 9.)  Thus, the Court finds that the failure to file the amended cross-complaint within 10 days does not demonstrate delay as The One Solution did timely attempt to file the amended cross-complaint with the court.

Cross-Defendants summarily argue that they will be prejudiced because they will need to play “catch up” on discovery and the current trial date will need to be continued again.  However, this argument is based on speculation with no specific details provided regarding such prejudice.  Further, the proposed amended Cross-Complaint involves the exact same business transaction and dealings as alleged in Sushi Bear’s complaint and in the original Cross-Complaint; thus, the amended Cross-Complaint would not likely unreasonably burden or complicate the lawsuit.  (See Garcia v. Roberts (2009) 173 Cal.App.4th 900, 910 [ordinarily, no prejudice will result from an amendment that is based on the same general set of facts].)

Moreover, the cross-defendants named in the proposed amended pleading (with the exception of Omni) are the same as those named in the initial cross-complaint.  As to Omni, it was named as a cross-defendant in Wilshire’s cross-complaint filed in May 2021.  Thus, all cross-defendants are familiar with the underlying facts.  Therefore, it does not appear to the Court that permitting the amended Cross-Complaint will result in unnecessary delay or prejudice.

Accordingly, the Motion is granted.

MOTION 2: Motion to Dismiss for Failure to Timely Amend Cross-Complaint

An action may be dismissed as to a defendant when, after a demurrer to the complaint is sustained with leave to amend, the plaintiff fails to amend the complaint within the time allowed by the court and either party moves for dismissal.  (Code Civ. Proc. § 581(f)(2).)

As noted above, The One Solution did timely attempt to file an amended cross-complaint with the Court, but the filing was rejected by the clerk.  Given The One Solution’s timely attempt to comply with the Court’s January 24, 2022 Order, the liberal policy of allowing amendments, and the fact that dismissal under section 581(f)(2) is discretionary, the Court denies the motion.

Counsel for The One Solution is ordered to give notice of this ruling.