Judge: George F. Bird, Jr., Case: 21CMCV00131, Date: 2023-02-21 Tentative Ruling

“INSTRUCTIONS:
If the parties wish to submit on the tentative ruling and avoid a court
appearance on the matter, the moving party must:

1. Contact the opposing party and all other
parties who have appeared in the action and confirm that each will submit on the
tentative ruling.

2. No later than 4:00 p.m. on the court day
before the hearing, call the Courtroom (310-761-4302) advising that all parties
will submit on the tentative ruling and waive hearing; and

3. Serve notice of the Court's ruling on all
parties entitled to receive service.

If this procedure is followed, when the case is
called the Court will enter its ruling on the motion in accordance with its
tentative ruling. If any party declines to submit on the tentative ruling, then
no telephone call is necessary, and all parties should appear at the hearing.
If there is neither a telephone call nor an appearance, then the matter may
either be taken off calendar or ruled on. 

Case Number: 21CMCV00131    Hearing Date: February 21, 2023    Dept: B

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES – SOUTH CENTRAL DISTRICT

I.       BACKGROUND

            Plaintiff and Cross-Defendant Rosa Zavala (“Plaintiff”) filed the Complaint in this action on May 28, 2021, and subsequently filed the operative First Amended Complaint (“FAC”) on July 8, 2021. Plaintiff alleges that Defendant Desiree Flores, Plaintiff’s daughter, promised to pay off the mortgage on the property Plaintiff owned and resided at, located at 22217 Moneta Avenue, Carson, CA 90745 (the “Property”), in exchange for Defendant Desiree Flores being added to the title and having Plaintiff make interest-free payments to Defendant Desiree Flores. (FAC, ¶ 14.) The Property consists of a front unit and a back garage that had been converted into a dwelling unit where Plaintiff resided. (FAC, ¶ 12.) On February 10, 2017, Plaintiff alleges that Defendant Desiree Flores had Plaintiff sign a quitclaim deed which Plaintiff understood to only add Defendant Desiree Flores on the title to the Property. (FAC, ¶ 16.) Plaintiff alleges that Defendant Desiree Flores subsequently altered the deed without Plaintiff’s consent to gift the Property to Defendant Desiree Flores. (FAC, ¶ 17.)

            In April of 2021, Plaintiff alleges she was locked out of the Property after a disagreement between Plaintiff and Defendant Desiree Flores about renting the front unit of the Property to Plaintiff’s daughter, Rosemary. (FAC, ¶¶ 25, 26.) After this disagreement, Plaintiff discovered that title to the Property was held jointly by Defendants Desiree Flores and David Flores (“Defendants”) and a $132,000.00 loan was taken out by Defendants against the Property. (FAC, ¶ 27.)

II.       MOTION FOR LEAVE TO FILE A CROSS-COMPLAINT

A.    Defendants’ Motion.

            Defendants filed the Motion for Leave to File a Cross-Complaint (“Motion”) on January 20, 2023. Defendants state that they did not know Plaintiff had been accepting rent from tenants living at the Property until November 9, 2022, when the parties were engaged in a private mediation. (Motion, p. 5:15-17.)

B.     Plaintiff’s Opposition.

            Plaintiff filed the Opposition to the Motion on February 6, 2023. Plaintiff argues that Defendants have waived their right to bring the cross-complaint because Defendants were aware Plaintiff was collecting rent from tenants on the Property at the time Defendants filed their answer to the FAC. Plaintiff states that allowing leave to file a cross-complaint would prejudice Plaintiff by having to respond to discovery regarding these claims and possibly subjecting Plaintiff to a second deposition.

III.       LEGAL STANDARDS

            A cross-complaint is either compulsory or permissive. A compulsory cross-complaint alleges any related cause of action. (Code Civ. Proc., § 426.30, subd. (a).) 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.” (Code Civ. Proc., § 426.10, subd. (c); Carroll v. Import Motors, Inc. (1995) 33 Cal.App.4th 1429, 1434 [39 Cal.Rptr.2d 791, 794].) To be a compulsory cross-complaint, the causes of action that are related must have existed at the time the answer was filed. (Code Civ. Proc., § 426.30, subd. (a).) For a compulsory cross-complaint, “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. This subdivision shall be liberally construed to avoid forfeiture of causes of action.” (Code Civ. Proc., § 426.50.)

            If the cross-complaint is not considered compulsory, a party may still seek leave to file a cross-complaint as a permissive cross-complaint. The court has discretion to grant leave to file a permissive cross-complaint if leave is “in the interest of justice at any time during the course of the action.” (Code Civ. Proc., § 428.50, subd. (c).)

IV.       REQUEST FOR JUDICIAL NOTICE

            Plaintiff requests that this Court take judicial notice of two documents: (1) Summons and complaint filed by David Flores and Desiree Flores on July 7, 2021, and (2) Request for Dismissal filed by David Flores and Desiree Flores on August 10, 2021. The court may take judicial notice of records of any court of this state under Evidence Code section 452, subdivision (d). The Court takes judicial notice of both documents.

V.       DISCUSSION

A.    The cross-complaint is compulsory.

            Defendants have filed the proposed cross-complaint which brings causes of action for accounting, conversion, and unjust enrichment against Plaintiff alleging that Plaintiff collected rental income from tenants in 2017 through 2019 and 2021 that was not provided to Defendants. (Declaration of Eva B. Kobi, Esq., Exhibit A ¶¶ 12, 13, 15.) The causes of action involve the same parties as the FAC and involves the same Property. Who is entitled to the rents collected is directly related to the issue of ownership of the Property which is disputed by the FAC. The Court finds that the causes of action in the cross-complaint are related to those alleged in the FAC.

            Defendants filed their answer to the FAC on December 13, 2021. The alleged rents that are at issue in the cross-complaint were collected between 2017 and 2021. The causes of action existed at the time Defendants filed their answer to the FAC. Because the causes of action are related and existed at the time the answer was filed, the cross-complaint is a compulsory cross-complaint.

            Plaintiff argues that Defendants have waived their right to bring this cross-complaint by failing to file the cross-complaint at the time of the answer. Plaintiff misunderstands Code of Civil Procedure section 426.30, subdivision (a), which states, “Except as otherwise provided by statute, if a party against whom a complaint has been filed and served fails to allege in a cross-complaint any related cause of action which (at the time of serving his answer to the complaint) he has against the plaintiff, such party may not thereafter in any other action assert against the plaintiff the related cause of action not pleaded.”

            This section prevents a party from bringing a related cause of action in another action. Defendants are bringing their compulsory cross-complaint in the same action with the causes of action that are related. There is no requirement that a party bring a compulsory cross-complaint at the same time they bring their answer in the same action. The causes of action must exist at the time a party answers, but they need not bring a cross-complaint at the time of the answer. (See Silver Organizations Ltd. v. Frank (1990) 217 Cal.App.3d 94, 98 [Court of Appeal reversed lower court’s decision to deny leave to file a compulsory cross-complaint which was brought on the eve of trial.].) Any unreasonable delay in bringing a compulsory cross-complaint impacts the analysis of good faith, but it does not prevent a party from seeking to file a cross-complaint.

B.     Leave to amend.

            For a compulsory cross-complaint, the court shall grant leave to amend if the party seeking leave acted in good faith. (Code Civ. Proc., § 426.50.) “Factors such as oversight, inadvertence, neglect, mistake or other cause, are insufficient grounds to deny the motion unless accompanied by bad faith.” (Silver Organizations Ltd. v. Frank, supra., 217 Cal.App.3d at p. 99.) At most, the court has a mere ‘modicum of discretion’ to deny leave to file a compulsory cross-complaint and substantial evidence of bad faith is still necessary if such discretion is exercised. (Ibid.; Sidney v. Superior Court (1988) 198 Cal.App.3d 710, 718 [244 Cal.Rptr. 31, 36].)

            Defendants state they were not aware of the fact that Plaintiff was collecting rental income at the time of filing the answer to the FAC. (Motion p. 5:15-18; Declaration of Desiree Flores, ¶ 2.) Plaintiff points to several portions of the deposition of Defendant Desiree Flores which Plaintiff argues demonstrate that Defendants knew Plaintiff was collecting rent from tenants. The quoted portions show that Defendants knew Plaintiff was collecting rent from tenants in 2017 through 2019 and that those rents were then given to Defendants directly or through Defendants’ children. (Opposition p. 4:6-16.) These portions do not demonstrate that Defendants were aware Plaintiff was keeping any of the rents collected, only that Plaintiff collected the rents and provided it to Defendants. As for the rents collected in 2021, Defendant Desiree Flores states that no rent was ever paid. (Opposition, p. 6:16-19.) The Court finds no definitive admission by Defendants that they were aware of the rents being kept by Plaintiff before November 9, 2022.

            Even construing the evidence in favor of Plaintiff, it falls well below the necessary showing to support a finding of bad faith. The Court of Appeal has expressed that substantial evidence of bad faith is necessary to deny leave to file a compulsory cross-complaint. (Silver Organizations Ltd. v. Frank, supra., 217 Cal.App.3d at p. 100.) Bad faith, as defined in Silver Organizations Ltd., has a mental component of conscious wrongdoing, ill will, or “affirmatively operating with furtive design.” (Ibid.) Plaintiff fails to provide evidence demonstrating a mental intent of Defendants to wrongfully delay filing these related claims until now. The Court finds that there is not a sufficient showing of bad faith to deny this motion for leave to file a cross-complaint.

            Plaintiff argues that granting leave will prejudice Plaintiff by having to respond to discovery for the new causes of action and possibly requiring a second deposition of Plaintiff. (Opposition, p. 8:3-7.) There is certainly enough time to conduct a second deposition of Plaintiff if necessary. Because this is a compulsory cross-complaint, the court lacks sufficient discretion to deny leave for reasons of prejudice.

            Based on the foregoing, this Motion for Leave to File a Cross-Complaint is GRANTED.

VI.       CONCLUSION

             This Motion for Leave to File a Cross-Complaint is GRANTED.

Dated: February 21, 2023                                                      _______________________

                                                                                                Judge of the Superior Court