Judge: Gregory Keosian, Case: 21STCV31346, Date: 2023-11-28 Tentative Ruling
Case Number: 21STCV31346 Hearing Date: November 28, 2023 Dept: 61
Plaintiff
Arthur Hambartsumyan’s Motion for Leave to File First Amended Complaint is GRANTED,
except as to the 19th through 23rd and 25th causes of action for intentional
inflection of emotional distress, quiet title, resulting trust, constructive
trust, injunctive relief, and breach of contract, in the proposed FAC, as to
which the motion is DENIED.
Plaintiff to provide notice.
I.
MOTION
FOR LEAVE TO FILE AMENDED COMPLAINT
Code Civ. Proc.
section 473 subd. (a)(1) states that:
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.
“The trial court
has discretion to permit or deny the amendment of the complaint, but instances
justifying the court's denial of leave to amend are rare.” (Armenta ex rel. City of Burbank v. Mueller
Co. (2006) 142 Cal.App.4th 636, 642.)
“Although 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
[Citations], this policy should be applied only ‘[w]here no prejudice is shown
to the adverse party . . .’ [Citation.] A different result is indicated
‘[w]here inexcusable delay and probable prejudice to the opposing party’ is
shown. [Citation.]” (Magpali v. Farmers
Group, Inc. (1996) 48 Cal.App.4th 471, 487.)
Pursuant to California Rule of
Court Rule 3.1324, “[a] motion to amend a pleading before trial must:
(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.”
Such a motion must include a
supporting declaration 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 reasons why the request for
amendment was not made earlier.” (CRC Rule 3.1324, subd. (b).)
Plaintiff Arthur Hambartsumyan
(Plaintiff) seeks leave to file a first amended complaint alleging 16 new
causes of action and one new defendant, Lilart LLC. (Motion Exh. D.) The 12th
through 18th causes of action are for FEHA violations based on
disability and age discrimination; the 19th cause of action is for
intentional infliction of emotional distress arising from the same facts as the
FEHA claims; and the 20th through 27th causes of action
are founded on fraud, breach of contract, and quiet title, based on Defendant’s
alleged failure to provide a one-half ownership interest in certain real
property after Plaintiff paid for same. (Ibid.) Plaintiff claims that
the new claims were prompted by the retention of new counsel in August 2023.
(Barber Decl. ¶¶ 5–6.)
Defendant argues that the 19th
through 27th causes of action are time-barred, as they are based on
facts independent of the wage-and-hour violations stated in the original
complaint, and the statutes of limitations have passed. (Opposition at pp.
4–8.) Defendant further argues that the causes of action for quiet title,
resulting trust, constructive trust, injunctive relief, fraud, and breach of
contract are barred not only by the statute of limitations, but the statute of
frauds. (Opposition at pp. 6–8.) Defendants argue that the claims against
Lilart, LLC as Doe Defendant should not be permitted, since they are based on
the defective contract claims. (Opposition at pp. 9–10.) Finally, Defendant
argues that the 27th cause of action for unjust enrichment is not a
standalone cause of action. (Opposition at pp. 4.)
Courts
possess discretion to deny leave to amend where it would be futile, although ““[t]he
preferable practice [is] to permit the amendment and allow the parties to test
its legal sufficiency by demurrer, motion for judgment on the pleadings or
other appropriate proceedings” (Kittredge
Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048.) However,
because Plaintiff here seeks to shift the primary factual basis of their
complaint on several facially defective claims, it is proper to limit leave to
amend here.
First, Defendant is correct that
the 19th through 23rd and 25th causes of
action — for IIED, quiet title, resulting trust, constructive trust, injunctive
relief, and breach of contract — are time-barred and cannot benefit from the
relation-back doctrine. First, the wrongs complained of in these new causes of
action were complete at the time of Plaintiff’s termination on July 7, 2021, as
the wrongs consist of Defendant’s wrongful discrimination and termination of
employment, coupled with the notice that Defendant would not honor its oral
agreement to grant Plaintiff a one-half interest in certain real property.
(Proposed FAC ¶¶ 49–50.) The statute of limitations applicable to both IIED
claims and claims founded upon oral contracts is two years. (Code Civ. Proc. §§
335.1 [personal injury], 339 [oral contract]; see Robin v. Crowell
(2020) 55 Cal.App.5th 727, 739 [holding that courts use “underlying theory of
relief to determine the applicable period of limitations” on a quiet title
claim].) The time to add these claims, without the benefit of the relation back
doctrine, expired on July 7, 2023.
An amended complaint is considered a new
action for purposes of the statute of limitations only if the claims do not
“relate back” to an earlier, timely-filed complaint. Under the relation-back
doctrine, an amendment relates back to the original complaint if the amendment:
(1) rests on the same general set of facts; (2) involves the same injury; and
(3) refers to the same instrumentality.
(Pointe
San Diego Residential Community, L.P. v. Procopio, Cory, Hargreaves &
Savitch, LLP (2011) 195 Cal.App.4th 265, 276.)
Plaintiff’s claims for breach of contract, quiet title, and
IIED do not rest on the same general set of facts, do not involve the same
injury, and do not refer to the same instrumentality as the original complaint.
The original complaint was exclusively for wage-and-hour violations. The
proposed claims are founded on claims of disability and age discrimination,
wrongful termination, and the failure to honor a contract to give Plaintiff a
50% share of real property. This is not an allegation of “the same misconduct
and the same injury” as required for the relation back doctrine to apply. (Amaral
v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1200.)The claims alleged
in the proposed amendment have nothing in common with the original complaint
except for the fact that they involve Plaintiff’s employment. This is
insufficient. (See Lee v. Bank of America (1994) 27 Cal.App.4th 197, 213
[holding that claim for wrongful termination was not based on the same general
set of facts as an earlier claim for wrongful demotion].)
The claims based upon Plaintiff’s
alleged oral contract for the purchase of his interest in certain real property
is also barred by the statute of frauds. California’s statute of frauds
provides that a contract “for the sale of real property, or of an interest
therein” is invalid “unless they, or some note or memorandum thereof, are in
writing and subscribed by the party to be charged.” (Civ. Code § 1624, subd.
(a)(3).) The alleged oral contract here falls within this category. (See Proposed
FAC ¶ 43 [alleging agreement was “partly oral and partly implied by conduct”].)
Although Plaintiff in reply argues that Defendant ought to be equitably
estopped from asserting the statute of frauds here based on their fraudulent
conduct inducing Plaintiff’s reliance (Reply at pp. 4–5), Plaintiff alleges no
reliance upon Defendant’s contractual promise except his payment of money.
(Proposed FAC ¶¶ 40–44.) “[U]nder well-established principles of California
law,
payment of money alone is not enough as a matter of
law to take an agreement out of the statute of frauds.” (Secrest v. Security
National Mortgage Loan Trust 2002-2 (2008) 167 Cal.App.4th 544, 548.)
The same outcome is not appropriate, however, for
Plaintiff’s proposed 24th, 26th, and 27th
causes of action for fraud, conversion, and unjust enrichment, for Plaintiff’s
FEHA causes of action, which Defendant does not challenge. The causes of action
for fraud and conversion are not dependent upon the validity of Plaintiff’s
oral contract, and are not subject to the statute of frauds. Moreover, they are
still timely; the limitations period for a fraud claim is three years, and is
the same for a conversion claim. (Code Civ. Proc. § 338, subd. (c), (d).) The
proposed FAC alleges that Plaintiff learned that Defendant was repudiating
their promise (and thus unjustly retaining his money) upon his termination in
July 2021, meaning that the time-limit for these claims does not run until July
2024. (Proposed FAC ¶¶ 49–50.) The unjust enrichment claim also survives as a
claim for restitution of the funds fraudulently retained by Defendant. (See De Havilland v. FX Networks