Judge: Frank M. Tavelman, Case: 21GDCV00283, Date: 2022-12-30 Tentative Ruling

Case Number: 21GDCV00283    Hearing Date: December 30, 2022    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

MOTION FOR LEAVE TO FILE THIRD AMENDED COMPLAINT

ALLEGATIONS:

Gaurav Gupta (“Plaintiff”) filed suit against Defendants Medversant Technologies, LLC and Matthew Haddad (“Defendants”), alleging Defendants violated various Labor Code sections during Plaintiff’s employment from June 21, 2010 to August 17, 2021.  The alleged violations include, failing to pay Plaintiff wages earned and failure to provide proper pay stubs.

Plaintiff’s September 20, 2021 Complaint alleges five causes of action: (1) Failure to Pay Wages; (2) Pay-Stub Violations; (3) Waiting Time Penalties; (4) Unfair Business Practices; and (5) Fraud.  Plaintiff filed a First Amended Complaint on December 13, 2021 with the same five causes of action.

Defendants filed a Demurrer to Plaintiff’s First Amended Complaint on June 2, 2022, demurring to the Fifth Cause of Action for Fraud as alleged within Plaintiff’s First Amended Complaint.  Subsequently, on July 28, 2022, the Court sustained Defendants’ Demurrer to Plaintiff’s Fifth Cause of Action for Fraud, providing twenty days leave to amend.

Plaintiff filed the operative Second Amended Complaint on August 26, 2022, alleging six causes of action, the fifth and sixth causes of action being new: (1) Failure to Pay Wages; (2) Pay-Stub Violations; (3) Waiting Time Penalties; (4) Unfair Business Practices; (5) Negligence; and (6) Failure to Produce Records.

HISTORY:

The Court received the Motion filed by Plaintiff on December 1, 2022.  The Court received the opposition to the Motion filed by Defendants on December 19, 2022.  The Court received the reply to the Motion filed by Plaintiff on December 22, 2022.

RELIEF REQUESTED:

Plaintiff moves for an Order granting leave to file the proposed Third Amended Complaint, which is attached as Exhibit A to the Declaration of Thomas M. Diachenko.  (Diachenko Decl., Ex. A.)

ANALYSIS:

I.          LEGAL STANDARD

Code of Civil Procedure section 473, subdivision (a) provides: “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 Civ. Proc., § 473, subd. (a)(1); see Code Civ. Proc., § 576.)¿ 

Permissible amendments pursuant to Code of Civil Procedure section 473, subdivision (a) include amendments which add causes of action.  A plaintiff that fails to plead a cause of action arising out of the transaction or occurrence that gave rise to the complaint may apply to the court for leave to amend the complaint to assert the cause of action, whether that failure was the result of oversight, inadvertence, mistake, neglect, or other cause.  (Code Civ. Proc., § 426.50; see Code Civ. Proc., § 426.10, subd. (c).)  The motion to amend may be filed at any time during the course of the action, on notice to the adverse party.  (Code Civ. Proc., § 426.50.) 

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Courts have broad discretion to permit amendments to pleadings, and “the court’s discretion will usually be exercised liberally to permit amendment of the pleadings.”¿ (Howard v. County of San Diego (2010) 184 Cal.App.4th 1422, 1428.)¿ “The policy favoring amendment is so strong that it is a rare case in which denial of leave to amend can be justified.”¿ (Ibid.)¿ “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.)¿ Prejudice includes “delay in trial, loss of critical evidence, or added costs of preparation.”¿ (Solit v. Tokai Bank, Ltd. New York Branch (1999) 68 Cal.App.4th 1435, 1448.)¿¿ 

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A motion to amend a pleading before trial must include a copy of the proposed amendment or amended pleading.¿ (Cal. Rules of Court, Rule 3.1324, subd. (a)(1).)¿ A motion to amend a pleading must also be supported by a declaration which specifies the following: (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.¿ (Cal. Rules of Court, Rule 3.1324, subd. (b).)¿

II.        MERITS

Plaintiff moves for an Order granting leave to file the proposed Third Amended Complaint, which is attached as Exhibit A to the Declaration of Thomas M. Diachenko.  (Diachenko Decl., Ex. A.) 

Plaintiff explains, on July 28, 2022, this Court sustained Defendants’ Demurrer to Plaintiff’s Fifth Cause of Action for Fraud, which was alleged within Plaintiff’s First Amended Complaint, on the ground Plaintiff had failed to plead the cause of action with the requisite particularity.  (Mot., at p. 3:3-7.)  The Court provided Plaintiff with twenty days leave to amend the operative First Amended Complaint to correct the pleading deficiencies.  (Ibid.)  Subsequently, on July 28, 2022, Plaintiff filed the Second Amended Complaint, which withdrew Plaintiff’s Fifth Cause of Action for Fraud, and replaced the same with Plaintiff’s Fifth Cause of Action for Negligence.  (Mot., at p. 3:8-11.)  Plaintiff’s Second Amended Complaint, further, added a Sixth Cause of Action for Failure to Produce Records.  (Ibid.) 

On August 26, 2022, Defendants’ counsel met and conferred with Plaintiff’s counsel, contending Plaintiff’s Second Amended Complaint improperly added two causes of action, which was beyond the scope of the amendment permitted by the Court’s Order.  (Rodenbo Decl., ¶ 3, Ex. B at p. 3 [“Since adding new causes of action was not in the scope of the Court’s Order, the SAC is subject to demurrer as to the fifth and sixth causes of action.  Furthermore, Plaintiff did not receive the Court’s permission to add new causes of action since you did not file a motion to amend the pleadings.”].)  Indirectly conceding this point, Plaintiff now files the present Motion, where Plaintiff seeks leave to file a Third Amended Complaint which makes the following amendments to the Second Amended Complaint: (a) Permitting addition of a Fifth Cause of Action for Negligence, in place of the previously alleged Fifth Cause of Action for Fraud; and (b) Supplementing the Second Cause of Action for Failure to Provide Pay Stubs with the allegations contained in Plaintiff’s Sixth Cause of Action for Failure to Timely Produce Records, and removing Plaintiff’s Sixth Cause of Action as a separate cause of action. 

Preliminarily, the Court recognizes that Plaintiff’s addition of two new causes of action within Plaintiff’s Second Amended Complaint was improper as the Court’s Order did not permit amendment in such a manner.  (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023 [“Following an order sustaining a demurrer . . . with leave to amend, the plaintiff may amend his or her complaint only as authorized by the court’s order.  [Citation.]  The plaintiff may not amend the compliant to add a new cause of action without having obtained permission to do so, unless the new cause of action is within the scope of the order granting leave to amend.”].)  The Court’s Order upon Defendants’ Demurrer only permitted amendment of the Fifth Cause of Action for Fraud, and did not provide Plaintiff with permission to amend the Complaint in other respects contrary to existing case law.  Nevertheless, the issue before the court is permission to amend at this point pursuant to Code of Civil Procedure section 473 (a).  The Court observes the pertinent issue is whether amendment, as proposed within the Third Amended Complaint, may be allowed pursuant to Code of Civil Procedure sections 473(a) and 426.50 (leave to amend).

The Court concludes that under Code of Civil Procedure sections 473(a) and 426.50 Plaintiff may properly be granted leave to file the proposed Third Amended Complaint.  First, the Court concludes Plaintiff has satisfied the whole of the procedural requirements enumerated within California Rules of Court, Rule 3.1324(a)(1) and (b).  Plaintiff has appropriately provided a copy of the proposed Third Amended Complaint as Exhibit A to the Declaration of Thomas M. Diachenko, and has furthermore submitted an affidavit specifying the effect of the amendment, why the amendment is necessary and proper, when the facts giving rise to the amended allegations were discovered, and the reasons why the request for amendment was not made earlier.  (Ibid.; Diachenko Decl., ¶ 4.) 

Second, the Court concludes Plaintiff’s Motion has been timely made, and permitting the filing of the proposed Third Amended Complaint would not prejudice any adverse party.  The Court observes the trial date in this action is not scheduled to commence for another seven months on July 10, 2023.  Thus, the parties have ample time to conduct any additional discovery which must be completed because of the new allegations within the proposed Third Amended Complaint.  While Defendants set forth a variety of arguments to demonstrate Defendants will suffer prejudice as a result of Plaintiff’s filing of a Third Amended Complaint, the Court concludes Defendants’ arguments are not sufficient to overcome the general preference to permit amendments (although not without limit) (Opp., at p.6:6-26.).   The Court does take note of the Defendants’ complaint that while Plaintiff was likely to request a Third Amendment Complaint, they failed to timely extend a courtesy to opposing counsel in stipulating that any demurrer to the Second Amended Complaint be delayed.  Defense counsel does acknowledge that an extension was granted, but only shortly before the demurrer was due, which would have led to unnecessary expenses.  If true, such lacks of professional courtesy are disfavored by this Court, and the Court is confident that any confusion that may have resulted in this oversight will not continue.    

Nevertheless, it is well established that California courts have a policy of great liberality in allowing amendments so as to dispose of cases upon their substantial merits if the amendment does not affect the substantial rights of the defendant.  (Mac v. Minassian (2022) 76 Cal.App.5th 510, 510 citing Board of Trustees v. Superior Court (2007) 149 Cal.App.4th 1154, 1163.)   Accordingly, the Court concludes Plaintiff may properly be granted leave to file the proposed Third Amended Complaint, pursuant to Code of Civil Procedure section 473, subdivision (a).  (Code Civ. Proc., §¿473, subd. (a).)  Furthermore, pursuant to Code of Civil Procedure section 426.50, as cited by Defendant, the leave to amend under that section, “shall be liberally construed to avoid forfeiture of causes of action.”

III.       CONCLUSION

Plaintiff Gaurav Gupta’s Motion for Leave to File Third Amended Complaint is GRANTED. 

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RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records.

ORDER

Plaintiff Gaurav Gupta’s Motion came on regularly for hearing on December 30, 2022, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows:

THE MOTION IS GRANTED.

PLAINTIFF TO GIVE NOTICE.

IT IS SO ORDERED.

DATE:       December 30, 2022                               _______________________________

                                                                        F.M. TAVELMAN, Judge

                                                                        Superior Court of California

County of Los Angeles