Judge: Edward B. Moreton, Jr., Case: 22SMCV01876, Date: 2024-04-09 Tentative Ruling

Case Number: 22SMCV01876    Hearing Date: April 9, 2024    Dept: 205

Superior Court of California

County of Los Angeles

Beverly Hills Courthouse | Department 205

Background

This action arises from the renovation of the Century Plaza Condo Towers (the “Project”), located at 2025 Avenue of the Stars in Los Angeles (the “Property”). Plaintiff Quality Cabinet and Fixture Company, LLC (“Plaintiff”) entered into a subcontract with Defendant Webcor Construction L.P. dba Wecor Builders (“Webcor”) and Plaintiff alleges that, among other actions, Webcor breached the subcontract.

On October 12, 2022, Plaintiff filed a Complaint against Defendants Webcor, Next Century Partners, LLC, Century Plaza Master Association (collectively “Defendants”), and DOES 1 through 200, inclusive, alleging causes of action for: (1) breach of contract, (2) foreclosure of mechanic’s lien, (3) quantum meruit, (4) money had and received, and (5) account stated.

On November 29, 2022, Defendant Webcor filed an Answer to the Complaint.

On March 14, 2023, Plaintiff filed the operative First Amended Complaint (“FAC”) against Defendants, Zurich American Insurance Company, and DOES 1 through 250, inclusive, alleging causes of action for: (1) breach of contract, (2) enforcement mechanics lien release bond, (3) quantum meruit, (4) money had and received, and (5) account stated.

On April 17, 2023, Defendant Webcor filed an Answer to the FAC.

On March 11, 2024, Defendant Webcor filed and served the instant Motion for Leave to File Cross-Complaint, which is made on the grounds that granting it leave to file a cross-complaint is in the interests of justice and will promote the efficient resolution of all claims against the parties.

On March 21, 2024, Plaintiff filed an opposition to the motion, to which Defendant Webcor replied on March 27, 2024.

Jury trial in this action is scheduled to commence on June 24, 2024.

Legal Standard/Applicable Law

            Code Civ. Proc., § 428.50, subd. (a) provides that “[a] party shall 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.” “Any other cross-complaint may be filed at any time before the court has set a date for trial.” (Code Civ. Proc., § 428.50, subd. (b).) “A party shall obtain leave of court to file any cross-complaint except one filed within the time specified in subdivision (a) or (b). Leave may be granted in the interest of justice at any time during the course of the action.” (Code Civ. Proc., § 428.50, subd. (c).)

            “A party who fails to plead a cause of action subject to the requirements of this article, whether through oversight, inadvertence, mistake, neglect, or other cause, may apply to the court for leave . . . to file a cross-complaint, to assert such cause of action at any time during the course of the action.” (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. [CCP § 426.50] shall be liberally construed to avoid forfeiture of causes of action.” (Code Civ. Proc., § 426.50.) A compulsory cross-complaint can by definition be against the plaintiff or the cross-complainant. (Code Civ. Proc., § 426.50.) A compulsory cross-complaint is one that arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause of action which plaintiff alleges in its complaint. (Code Civ. Proc., §§ 426.10(c) and 426.30(a).)

            Code Civ. Proc. § 428.10(b) allows a party to file a cross-complaint alleging “[a]ny cause of action he has against a person alleged to be liable thereon, whether or not such person is already a party to the action, if the cause of action asserted in his cross-complaint (1) arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause brought against him.” “[A] related cause of action is 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.” (K.R.L. Partnership v. Superior Court, supra, 120 Cal.App.4^th 490, 498.) “Cross-complaints for comparative equitable indemnity would appear virtually always transactionally related to the main action.” (Time for Living, Inc. v. Guy Hatfield Homes/All American Development Co. (1991) 230 Cal.App.3d 30, 38.) 

            “Bad faith, is defined as [t]he opposite of good faith, generally implying or involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake . . . , but by some interested or sinister motive[,] . . .  not simply bad judgment or negligence, but rather the conscious doing of a wrong because of dishonest purpose or moral obliquity; it contemplates a state of mind affirmatively operating with furtive design or ill will.” (Silver Organizations Ltd. v. Frank (1990) 217 Cal.App.3d 94, 100, citations omitted.)

Analysis

The proposed cross-complaint of Defendant Webcor is attached as Exhibit 1 to the declaration of Daniel Sakaguchi (“Sakaguchi”) in support of the motion. (Sakaguchi Decl., ¶ 2; Exh. 1.) The proposed cross-complaint is asserted against Plaintiff and arises from the construction of the Project. The proposed cross-complaint asserts causes of action against Plaintiff for: (1) breach of contract, (2) express contractual indemnity, and (3) equitable indemnity. (Id.)

Here, the Court finds that the proposed cross-complaint is compulsory because it arises from the same transaction that gives rise to Plaintiff’s FAC against Defendant Webcor. As such, it is mandatory that the Court grant Defendant Webcor leave to file its proposed cross-complaint against Plaintiff unless there is a showing of bad faith.

Here, there is no evidence of bad faith. Plaintiff argues in the opposition that “Webcor knew or should have known of any potential claims long ago. This attempt to file a [c]ross-[c]omplaint is a delay tactic and precursor to a future motion for a trial continuance.” (Opp’n at p. 2: 20-23.) Plaintiff contends that the motion should have been filed back in November of 2023. (Opp’n at p. 2:8-9.) In support of the opposition, Plaintiff’s counsel declares that on or about November 15, 2023, he sent a letter to Defendant Webcor’s Vice President, Kurt Rucci, that addressed the alleged defective work issue concerning the Project. (Donohue Decl., ¶ 2; Exh. A.) A delay of four months is not undue, nor is there any showing of prejudice to Plaintiff because of the request of Defendant Webcor to file a cross-complaint. The failure to timely file a cross-complaint with the answer alone is not evidence of bad faith; otherwise, there would be no provision to seek leave under CCP § 428.50.

Conclusion

Accordingly, the Court GRANTS Defendant Webcor’s Motion for Leave to File Cross-Complaint. Defendant Webcor is ordered to file and serve its proposed cross-complaint, which is attached as Exhibit 1 to the declaration of Daniel Sakaguchi in support of the motion, within five calendar days of the date of this order so that it becomes an operative pleading in this action.

Dated: April 9, 2024

__________________________________________

Edward B. Moreton, Jr.

Judge of the Superior Court