Judge: Elaine Lu, Case: 21STCV43451, Date: 2024-01-26 Tentative Ruling

Case Number: 21STCV43451    Hearing Date: January 26, 2024    Dept: 26

Superior Court of California

County of Los Angeles

Department 26

Procedural Background

On November 29, 2021, Plaintiff Jose Flores (“Plaintiff” or “Flores”) filed the instant breach of contract action against Defendants Jeffrey Bruce Bastedo (“Bastedo”) and Sunland Wood Products, Inc. (“SWPI”) (jointly “Defendants”).  On July 28, 2022, Plaintiff filed a first amended complaint against Defendants asserting four causes of action for (1) Breach of Contract, (2) Unfair Trade Practices, (3) Tortious Breach of the Implied Duty of Good Faith and Fair Dealing, and (4) Fraud in the Inducement.  On January 23, 2023, the Court sustained Defendants’ demurrer to the first amended complaint with leave to amend.  (Order 1/23/23.)

On March 6, 2023, Plaintiff filed a Second Amended Complaint (“SAC”) against Defendants.  The SAC asserted four causes of action for (1) Intentional Interference with Prospective Economic Relations, (2) Breach of the Implied Covenant of Good Faith and Fair Dealing, (3) Fraud in the Inducement, and (4) Breach of Fiduciary Duty.  On September 20, 2023, the Court sustained Defendants’ demurrer and granted Defendants’ motion to strike with leave to amend.  (Order 9/20/23.) 

Instead of filing an amended complaint by November 16, 2023 pursuant to the September 20, 2023 Order, Plaintiff filed the instant motion on October 9, 2023 seeking leave to file a third amended complaint with two new causes of action.  On January 11, 2024, Defendants filed an opposition.  On January 12, 2024, Plaintiff filed a reply.

Legal Standard

            Code of Civil Procedure § 473, subdivision (a)(1) states: “[t]he 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

            Plaintiff seeks to file a Third Amended Complaint against Defendants asserting five causes of action for (1) Intentional Interference with Prospective Economic Relations, (2) Breach of Implied Covenant of Good Faith and Fair Dealing, (3) Promissory Fraud, (4) Promissory Estoppel, and (5) Unjust Enrichment, Restitution, and Quasi-Contract.  (Proposed Third Amended Complaint received 11/20/23.)   Upon comparison, the only substantive changes between the proposed Third Amended Complaint and the SAC is the removal of the Breach of Fiduciary Duty claim, the addition of a promissory estoppel claim, and the addition of an unjust enrichment/restitution claim.

            In opposition, Defendants contend that the instant motion should be denied because (1) the proposed underlying claim fails, and (2) Plaintiff failed to comply with California Rules of Court, rule 3.1324 and did not submit a declaration showing the proposed changes or when Plaintiff became aware of the need to amend the complaint.

            To the extent that the proposed second amended complaint is deficient, Defendants can challenge such deficiency in a demurrer or motion for summary judgment.   In general, 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.”].) 

            Moreover, while Plaintiff may have delayed in bringing the instant motion to amend the complaint, “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.”].) 

            Defendants are correct that Plaintiff’s motion does not comply with California Rules of Court, rule 3.1324 as no declaration was submitted as required.  In some circumstances such a failure would be prejudicial as the opposing party may be unable to determine the changes between the prior and proposed amended complaint.  Here, however, as conceded in the opposition, the proposed changes are not significant and near identical to the prior SAC.  (Opp. at pp.3:24-4:17.)  Moreover, the Court had already given Plaintiff permission to amend and file a proposed Third Amended Complaint, at least as to the first three proposed causes of action.  (Order 9/20/23.)  Given that no real substantial changes have been made and Plaintiff has merely added two additional legal theories of recovery, there does not appear to be any prejudice with the proposed Third Amended Complaint. 

            As there is no prejudice from the amendments, it would be an abuse of discretion to deny.  Accordingly, Plaintiff’s motion for leave to amend is GRANTED.

CONCLUSION AND ORDER

            Based on the foregoing, Plaintiff Jose Flores’ motion for leave to file a Third Amended Complaint with two new causes of action is GRANTED.

            Plaintiff is to file the proposed Third Amended Complaint within five (5) days of notice of this order.

            The case management conference is continued to March 12, 2024 at 8:30 am.

            Court Clerk is to give notice to all parties.

DATED:  January ___, 2024                                                  _____________________________

                                                                                                  Elaine Lu

                                                                                                  Judge of the Superior Court