Judge: Edward B. Moreton, Jr., Case: 22SMCV02817, Date: 2023-05-11 Tentative Ruling
Case Number: 22SMCV02817 Hearing Date: June 20, 2023 Dept: 205
Superior Court of California
County of Los Angeles – West District
Beverly Hills Courthouse / Department 205
GREEN & MCCAHILL HOLDINGS, LIMITED, Plaintiff, v. JCTLA INVESTMENT CORPORATION, et al., Defendants. Case No.: 22SMCV02817 Hearing Date: June 20, 2023 [TENTATIVE] ORDER RE: PLAINTIFF’S MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT
MOVING PARTY: Plaintiff Green & McCahill Holdings Limited
RESPONDING PARTY: Defendant JCTLA Investment Corporation
BACKGROUND
This case arises from a breach of a loan agreement. Defendant JCTLA Investment Corporation owns the real property located at 433 South Beverly Glen Blvd, Los Angeles, California (the “Property”). Defendant obtained an unsecured loan of $529,000 from Plaintiff Green & McCahill Holdings Limited, to pay for taxes, repairs and improvements on the Property.
The loan is evidenced by a written affidavit dated April 6, 2010, stating that Plaintiff is entitled to the principal amount of $529,000 plus 8% interest to be compounded annually (the
“Note”). The Note is signed by Justin Liu as “Caretaker of house for JCTLA.” Defendant alleges that at the time he signed the note, Justin Liu was an officer and director of Defendant. The Note provides that it will be paid back from rental income or if the Property is sold.
In March 2019, Defendant paid Plaintiff $529,000, for the principal amount of the Note. However, to date, Defendant has not paid back any interest due on the Note. As of January 2023, the total amount of interest due is $743,468.48, which continues to accrue at an 8% interest rate. The operative FAC alleges claims for (1) breach of contract and (2) money lent.
This hearing is on Plaintiff’s motion for leave to amend the FAC. Plaintiff seeks leave to add three claims – for breach of the covenant of good faith and fair dealing, for intentional interference with contractual relations and for declaratory relief. Plaintiff also seeks to add Jean Liu, Defendant’s current president, as a defendant, and to substitute in as plaintiff Green & McCahill Holdings Limited LLC (Plaintiff’s California subsidiary, the “LLC”), which has now been assigned all of Plaintiff’s claims under the Note.
LEGAL STANDARD
Code of Civ. Proc. § 473(a)(1), provides, in relevant part: “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.”
Under California Rules of Court Rule, Rule 3.1324, subdivision (a),¿a motion to amend a pleading shall:
(1) include a copy of the proposed amendment or amended pleading, which must be serially numbered to differentiate it from previous pleadings or amendments;
(2) state what allegations in the previous pleading are proposed to be deleted, if any, and where, by page, paragraph and line number, the deleted allegations are located; and
(3) state what allegations are proposed to be added to the previous pleading, if any, and where, by page, paragraph, and line number, the additional allegations are located.¿
In addition, under California Rules of Court, Rule 3.1324, subdivision (b),¿a¿separate declaration¿must accompany the motion and must specify:¿
(1) the effect of the amendment;
(2) why the amendment is necessary and proper;
(3) when the facts giving rise to the amended allegations were discovered; and
(4) the reasons why the request for amendment was not made earlier.
The Court’s discretion to grant leave “should be exercised liberally in favor of amendments, for judicial policy favors resolution of all disputed matters in the same lawsuit.”¿ (Kittredge Sports Co. v. Superior Court¿(1989) 213 Cal.App.3d 1045, 1047.)¿ Ordinarily, the Court will not consider the validity of the proposed amended pleading in ruling on a motion for leave since grounds for a demurrer or motion to strike are premature.¿¿The Court, however, does have discretion to deny leave to amend where a proposed amendment fails to state a valid cause of action as a matter of law and the defect cannot be cured by further amendment.¿ (See¿California Casualty General Ins. Co. v. Superior Court¿(1985) 173 Cal.App.3d 274, 281 (overruled on other grounds by¿Kransco v. American Empire Surplus Lines Ins. Co.¿(2000) 23 Cal.4th 390).)¿
DISCUSSION
Plaintiff’s declaration in support of its motion fails to satisfy the requirements under CRC Rule 3.1324. While the declaration attaches the proposed amendment (Exs. A-B to Turner Decl.), it fails to describe the effect of the amendment. Also, while the declaration states that Defendant discovered “after the filing of the FAC” that Defendant has not been renting out the Property, it does not specify precisely when the information was discovered or explain why the amendment could not be made earlier. (Turner Decl. ¶4.)
CONCLUSION
For the foregoing reasons, the Court DENIES WITHOUT PREJUDICE the motion to amend.
DATED: June 20, 2023 ___________________________
Edward B. Moreton, Jr.
Judge of the Superior Court