Judge: David S. Cunningham, Case: 20STCV46060, Date: 2024-12-18 Tentative Ruling

Case Number: 20STCV46060    Hearing Date: December 18, 2024    Dept: 11

Rahimi (20STCV46060)

 

Tentative Ruling Re: Motion for Leave to Amend

 

Date:                           2/18/24

 

Time:                          1:45 pm

 

Moving Party:           Cambridge Farms Kosher, Inc. (“Defendant”)

 

Opposing Party:        Shimon Rahimi (“Plaintiff”)

 

Department:              11       

 

Judge:                        David S. Cunningham III

________________________________________________________________________

 

TENTATIVE RULING

 

Defendant’s motion for leave to amend is granted.

 

BACKGROUND

 

This is a wage-and-hour class action.

 

Here, Defendant moves for leave to amend the answer to add 19 affirmative defenses.

 

DISCUSSION

 

Defendant

 

Defendant contends the Court should grant leave to amend because:

 

* in July 2024, Defendant obtained new counsel (see Motion, p. 1);

 

* the new counsel reviewed Defendant’s client files and determined that the prior counsel had failed to plead “a number of customary – and necessary – affirmative defenses[,]” including an arbitration defense (ibid.);

 

* the Court has discretion to grant leave to amend (see id. at p. 4);

 

* California policy favors leave to amend (see id. at pp. 4-5);

 

* Defendant did not delay (see id. at pp. 5-6);

 

* Plaintiff will not suffer prejudice (see id. at pp. 6-8); and

 

* Defendant will lose the right to defend the case on the merits if the motion is denied.  (See id. at p. 8.)

 

Plaintiff

 

Plaintiff asserts:

 

* Defendant waived the right to amend (see Opposition, pp. 3-6 [arguing that Defendant had actual or constructive knowledge of the purported arbitration agreement]);

 

* Plaintiff will be prejudiced (see id. at pp. 6-7 [contending the amended answer will “introduce new and substantially different issues” at a late stage in the litigation]);

 

* granting the motion will not further the interests of justice (see id. at pp. 7-8 [contending “California courts regularly deny motions for leave to amend based on unwarranted delay”]); and

 

* Defendant fails to establish that the amended answer is necessary.  (See id. at pp. 8-10.)

 

Reply

 

In reply, Defendant claims:

 

* the amended answer is necessary to ensure that the case is decided on the merits (see Reply, pp. 3-4);

 

* Plaintiff does not show prejudice (see id. at pp. 5-6);

 

* Defendant acted promptly to amend once it hired new counsel (see id. at pp. 6-7); and

 

* the motion satisfies the procedural requirements.  (See id. at pp. 7-8.)

 

Analysis

 

“An answer should contain whatever affirmative defenses (sometimes referred to as ‘new matter’) and/or denials that are necessary to controvert the material allegations of the complaint.”  (Edmon & Karnow, Cal. Practice Guide: Civ. Procedure Before Trial (The Rutter Group June 2024 Update) ¶ 6:385.)  “Its function is to put the case ‘at issue’ as to all important matters alleged in the complaint that defendant does not want to admit.”  (Ibid.)

 

“As with other pleadings, the court may grant leave to amend an answer[.]”  (Id. at ¶ 6:610.1.)  Leave to amend can be granted “at any stage of the action” (id. at ¶ 6:636) and is “directed to the sound discretion of the judge.”  (Id. at ¶ 6:637.)  The judge’s discretion should “usually be exercised liberally to permit” the amendment.  (Id. at ¶ 6:638, emphasis in original.)  Indeed, “[c]ourts usually display great liberality in allowing amendments to answers because ‘a defendant denied leave to amend is permanently deprived of a defense.’”  (Id. at ¶ 6:643; see also Howard v. County of San Diego (2010) 184 Cal.App.4th 1422, 1428 [instructing that “[t]he policy favoring amendment is so strong that it is a rare case in which denial of leave to amend can be justified”].)

 

The calculus is straightforward.  “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[.]”  (Morgan v. Superior Court (1959) 172 Cal.App.2d 527, 530.)  If “the refusal also results in a party being deprived of the right to assert . . . a meritorious defense, it is not only error but an abuse of discretion.”  (Ibid.)

 

Given these rules, the Court agrees with Defendant for at least four reasons.  One, California’s amendment policy is very liberal.  (See Howard, supra, 184 Cal.App.4th at 1428.)  Two, without the amendment, Defendant will be “deprived of [] defense[s].”  (Edmon & Karnow, supra, at ¶ 6:643.)  Three, the case is at the pre-certification stage, and there is no trial date set.  Four, Plaintiff will be free to demur to the amended answer, file a motion to strike, conduct discovery, and/or file a motion for summary adjudication, so the prejudice, if any, will be minimal.  These factors support granting the motion.

 

Plaintiff’s waiver/delay argument is unavailing.  It is undisputed that the new counsel started representing Defendant in July 2024.  (See Opposition, p. 3.)  The new counsel learned about the grounds for the new affirmative defenses after being hired when they reviewed Defendant’s client files.  (See Fraser Decl., ¶¶ 7-8.)  In September 2024, the new counsel tried, multiple times, to get Plaintiff’s counsel to stipulate to the amended answer.  Plaintiff’s counsel did not respond.  (See id. at ¶¶14-15.)  Consequently, in October 2024, they filed the instant motion.  The Court believes they filed it in a timely manner.

 

Plaintiff’s assertion that Defendant had actual or constructive knowledge of the arbitration agreement does not change the result.  The assertion only pertains to the arbitration defense and does not bear on whether the motion should be granted as to the other new defenses.  In terms of the arbitration defense, presumably, Plaintiff had just as much actual or constructive knowledge as Defendant did since he allegedly signed the agreement.  Regardless, though, whether an agreement to arbitrate exists, whether it is enforceable, and whether Defendant waived the right to compel arbitration are all issues for another day.  Defendant’s motion is a motion for leave to amend.  A judge typically does “not consider the validity of the proposed amended pleading in deciding whether to grant leave to amend.”  (Edmon & Karnow, supra, at ¶ 6:644, emphasis in original.)  “Grounds for demurrer or motion to strike are premature.”  (Ibid.)

 

This renders Plaintiff’s authorities distinguishable.  Quach v. California Commerce Club, Inc. (2024) 16 Cal.5th 562 involved a motion to compel arbitration.  The motion for leave to amend in Record v. Reason (1999) 73 Cal.App.4th 472 was decided at the same time as summary judgment.  The moving party had been aware of the “facts supporting [the] unpleaded theory it wished to raise in opposition to summary judgment for [three] years before seeking leave to amend[.]”  (Edmon & Karnow, supra, at ¶ 10:51.11, bold added, italics in original; see also Reason, supra, 73 Cal.App.4th at 486-487.)

 

On balance, the Court finds that Defendant’s motion should be granted.  The preferred approach is “permit[ting] the amendment and allow[ing] the parties to test its legal sufficiency by demurrer . . . or other appropriate proceedings.”  (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048.)