Judge: Elaine Lu, Case: 21STCV43451, Date: 2022-07-25 Tentative Ruling

Case Number: 21STCV43451    Hearing Date: July 25, 2022    Dept: 26

Superior Court of California

County of Los Angeles

Department 26

Procedural Background

On November 29, 2021, Plaintiff Jose Flores (“Flores”) filed the instant breach of contract action against Defendants Jeffrey Bruce Bastedo (“Bastedo”) and Sunland Wood Products, Inc. (“SWPI”) (jointly “Defendants”).  The complaint asserts four causes of action for (1) Breach of Contract, (2) Unfair Trade Practices, (3) Breach of the Implied Duty of Good Faith and Fair Dealing, and (4) Fraud in the Inducement.

On March 3, 2022, Plaintiff Flores filed the instant motion for leave to file a first amended complaint.  On July 12, 2022, Defendants filed an opposition.  On July 20, 2022, Plaintiff Flores filed a reply.

Untimely Reply

            “All papers opposing a motion so noticed shall be filed with the court and a copy served on each party at least nine court days, and all reply papers at least five court days before the hearing.”  (CCP § 1005(b).)  This is calculated by counting backwards from the hearing date and excluding holidays and weekends.  (CCP §§ 12-12(c).)  The court may refuse to consider a late-filed paper.  (Cal. Rules of Court, Rule 3.1300(d).) 

            Here, Plaintiff Flores filed the reply on July 20, 2022 – only three court days before the hearing for the instant motion.  Accordingly, the reply is untimely, and the Court declines to consider the untimely reply.

Allegations of the Operative Complaint

The Complaint alleges that:

            On September 10, 2021, Flores and Defendants Bastedo and SWPI met at SWPI and Bastedo’s shop in North Hollywood where SWPI and Bastedo contracted to have Flores’ workers – Jesus Diaz and Alejandro Hernandez –perform finished carpentry installations for at least three years.  (Complaint ¶ 13.)  Pursuant to this agreement, SWPI and Bastedo agreed to pay Flores for his workers’ time at $40 per hour.  (Id. ¶ 14.)  Further, the parties agreed that “they w[ould] not approach or solicit each other's workers, employees, clients or suppliers for the purpose for transactions outside the agreement.”  (Id. ¶ 15.)  In reliance on this agreement, Flores terminated an agreement with another contractor and prioritized this agreement with Defendants.  (Id. ¶ 16.) 

            “On 10/28/2021 [Flores] sent an email to [SWPI and Bastedo] with a written version of the agreement which was a list of the terms verbally agreed by the parties on 9/10/2021.”  (Id. ¶ 18.)  “[SWPI and Bastedo] paid [Flores] for his workers upon an invoice dated 9/25/2021 and 10/9/2021 just like it was agreed.”  (Id. ¶ 19.) 

            “On 10/24/2021 Alejandro Hernandez called [Flores] to inform him That [sic] he and Jesus Diaz decided to stop working for plaintiff, terminating their business relationship.”  (Id. ¶ 20.)  SWPI and Bastedo had – in violation of the agreement – poached Flores’ workers by offering them more money and other incentives to work directly for SWPI and Bastedo cutting out Flores.  (Id. ¶ 20.)

Request for Judicial Notice

Defendants request that the Court take Judicial Notice of:

A.    The Complaint in the instant action filed on November 29, 2021

C.    Plaintiff Flores’ Verified Responses to SWPI’s Requests Admissions, Set No. One

D.    Plaintiff Flores’ proposed First Amended Complaint

As the Court may take judicial notice of court records and actions of the State, (See Evid. Code, § 452(c)(d)), Defendants’ requests A and D is GRANTED.  However, the Court does not take judicial notice of the truth of assertions within. (See Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.)

As to request C, “[t]he court passing upon the question of the demurrer may look to affidavits filed on behalf of plaintiff, and the plaintiff's answers to interrogatories [Citation], as well as to the plaintiff's response to request for admissions.”  (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604.)  Thus, “[t]he court will take judicial notice of records such as admissions, answers to interrogatories, affidavits, and the like, when considering a demurrer, only where they contain statements of the plaintiff or his agent which are inconsistent with the allegations of the pleading before the court.”  (Id. at pp.604-605.)  Here, as the Court is considering Plaintiff Flores’ proposed First Amended Complaint, the Court may take judicial notice of Flores’ responses to requests for admission to the extent that they are contrary to the proposed pleading.

Legal Standard

Code of Civil Procedure § 473, subdivision (a)(1) states: “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.” 

Code of Civil Procedure § 576 states that: “[a]ny judge, at any time before or after commencement of trial, in the furtherance of justice, and upon such terms as may be proper, may allow the amendment of any pleading or pretrial conference order.”

Judicial policy favors resolution of all disputed matters between the parties, and therefore, courts have held that “there is a strong policy in favor of liberal allowance of amendments.” (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 296-97; see also Ventura v. ABM Industries, Inc. (2013) 212 Cal.App.4th 258, 268) [“Trial 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 where the adverse party will not be prejudiced.”].)

Pursuant to California Rules of Court, rule 3.1324(a), a motion to amend must: (1) include a copy of the proposed amendment or amended pleading, which must be serially numbered; and (2) state what allegations are proposed to be deleted from or added to the previous pleading and where such allegations are located.  Rule 3.1324(b) requires a separate declaration that accompanies the motion, stating: “(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 reason why the request for amendment was not made earlier.” 

Discussion

Proposed Amendments

            Here, Plaintiff Flores seeks to amend the complaint because throughout the original complaint Plaintiff Flores mischaracterized the capacity of Jesus Diaz and Alejandro Hernandez as Flores’ workers when in fact they were not Plaintiff Flores’ workers because they never performed any work for Plaintiff Flores.  (Flores Decl. ¶ 5.)  Plaintiff Flores also seeks to expand on the capacity of Defendant Bastedo as an alter ego of SWPI.  (Flores Decl. ¶ 6.)  Plaintiff Flores states that the need for these changes “came in light during the ongoing discovery process, therefore amending the complaint is necessary to avoid any confusion.”  (Flores Decl. ¶ 7.)  Plaintiff Flores first sought leave to file an ex parte application in February 2022 to amend the complaint which the Court denied for Plaintiff Flores to bring a noticed motion.  (Flores Decl. ¶ 8; Minute Order 2/25/22.)  Plaintiff has filed a proposed first amended complaint with these changes.

Opposition

            In opposition, Defendants contend that leave should be denied because the proposed pleading would be a sham pleading and there is no justification for the proposed changes.

            Generally, the sham pleading doctrine prohibits a plaintiff from amending a complaint to omit harmful allegations from prior pleadings, without explanation. (Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 425.)  Under the sham pleading doctrine, “[a] plaintiff may not avoid a demurrer by pleading facts or positions in an amended complaint that contradict facts pleaded in the original complaint, or by suppressing facts which prove the pleaded facts false.” (Cantu v. Resolution Trust Corporation (1992) 4 Cal.App.4th 857, 877-878.)  Where an amended complaint omits harmful allegations without explanation, the Court may take judicial notice of the prior pleadings and disregard any inconsistent allegations in the amended pleading.  (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 751.)  The sham pleading doctrine is not intended to prevent honest complainants from correcting erroneous allegations or to prevent correction of ambiguous facts.  (Ibid.)  Instead, it is intended to enable courts “‘to prevent an abuse of process.’” (Amid v. Hawthorne Community Medical Group, Inc. (1989) 212 Cal.App.3d 1383, 1390–1391.)

            The proposed First Amended Complaint would not be a sham pleading.  There is no demurrer that Plaintiff Flores is attempting to avoid by making these changes to the pleadings.  Regardless, while there may be deficiencies in the proposed First Amended Complaint, there is no requirement that a critical inquiry be made into the merits of the amendment on a request for leave to amend.  (See Ruiz v. Santa Barbara Gas & Elec. Co. (1912) 164 Cal. 188, 196 [ “The usual and orderly way to test the sufficiency of an amended complaint is, in the first instance, by demurrer, after the same has been filed, when the questions presented in regard thereto may be considered and determined, and leave given to the pleader to amend if the pleading be held insufficient and the court deem it proper that the party should have such leave.”].)  Rather, the proper challenge to deficiencies to a pleading is through a demurrer or motion to strike.  Similarly, evidentiary deficiencies should be addressed in a motion for summary judgment and/or summary adjudication.

While Plaintiff Flores failed to explain the delay in bringing the instant motion or when Plaintiff Flores discovered the need to amend the complaint, leave to amend is liberally granted.  In fact, “trial courts are to liberally permit such amendments, at any stage of the proceeding[.]”  (Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 488–489.)  Rather, to justify a denial of a motion for leave to amend, the delay must have caused prejudice to the adverse parties.  (See Fair v. Bakhtiari (2011) 195 Cal.App.4th 1135, 1147, [“[W]here there is no prejudice to the adverse party, it may be an abuse of discretion to deny leave to amend.”].)  Accordingly, the Court turns to Defendants’ claims of prejudice.

Prejudice

In opposition, Defendants claim that there is significant prejudice as they have already expended funds responding to discovery and that assert that they will face prejudice in the form of additional discovery costs.  Additional discovery costs may support a claim for prejudice. (Miles v. City of Los Angeles (2020) 56 Cal.App.5th 728, 739 [“Prejudice exists where the proposed amendment would require delaying the trial, resulting in added costs of preparation and increased discovery burdens.”].)  However, Defendants as Defendants note, the proposed amendments merely are recharacterizing allegations in the complaint.  Recharacterizing allegations are immaterial as [t]he court does not … assume the truth of contentions, deductions or conclusions of law.”  (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.)  Thus, recharacterizing allegations should not necessitate substantial additional discovery.  Further, Defendants have failed to provide any indication as to what additional discovery would be needed due to these changes – if any.

In sum, Defendants fail to identify any prejudice, and it would be an abuse of discretion to deny the instant motion for leave to file a first amended complaint in the absence of prejudice.  Notably, no trial date has been set in this action.  Moreover, Plaintiff sought leave to amend within approximately three months of filing the complaint.  Accordingly, the motion for leave to amend is GRANTED.

CONCLUSION AND ORDER

            Based on the foregoing, Plaintiff Jose Flores’ motion for leave to file a first amended complaint is GRANTED.

            Plaintiff is to file the proposed first amended complaint within five days of notice of this order.  Defendants are to file and serve a responsive pleading within 30 days of service of the amended complaint.

            The case management conference is continued to September 22, 2022 at 8:30 am.

            Moving Party is to give notice and file proof of service of such.

DATED:  July 25, 2022                                                          _____________________________

                                                                       Elaine Lu

                                                                        Judge of the Superior Court