Judge: H. Jay Ford, III, Case: 20SMCV01641, Date: 2023-04-04 Tentative Ruling

Case Number: 20SMCV01641    Hearing Date: April 4, 2023    Dept: O

  Case Name:  Corvo, et al. v. Kaplan, et al.

SUBJECT:                 MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT   

MOVING PARTY:   Plaintiff/Cross-Defendant Rod Corvo

RESP. PARTY:         Cross-Defendant Almahdi MHD Corporation d/b/a Almahdi Hardwood Flooring

TENTATIVE RULING

             Plaintiff/Cross-Defendant Rod Corvo’s Motion for Leave to File First Amended Complaint is GRANTED.  Corvo is ordered to file the proposed FAC under separate cover. 

“Courts must apply a policy of liberality in permitting amendments at any stage of the proceeding, including during trial, when no prejudice to the opposing party is shown.” P&D Consultants, Inc. v. City of Carlsbad (2010) 190 Cal.App.4th 1332, 1345. Prejudice exists, for example, where the plaintiff unduly delayed in seeking leave to amend, and the amendment will require a trial continuance and a reopening of discovery on the eve of trial.  Id. (leave to amend properly denied where plaintiff offered no explanation for one-year delay in seeking leave to amend, amendment was requested after trial readiness conference, amendment would require additional discovery and amendment would likely trigger a demurrer or other pretrial motions); Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 488 (“Where the trial date is set, the jury is about to be impaneled, counsel, the parties, the trial court, and the witnesses have blocked the time, and the only way to avoid prejudice to the opposing party is to continue the trial date to allow further discovery, refusal of leave to amend cannot be an abuse of discretion”).

“Section 473 permits the trial court in its discretion to allow amendments to pleadings in the furtherance of justice. Ordinarily, courts should exercise liberality in permitting amendments at any stage of the proceeding.  In particular, liberality should be displayed in allowing amendments to answers, for a defendant denied leave to amend is permanently deprived of a defense.”  Hulsey v. Koehler (1990) 218 Cal.App.3d 1150, 1159.  “A trial court has discretion to allow amendment of any pleading at any stage of the proceedings and it has been said that liberality should be particularly displayed in allowing amendment of answers so that a defendant may assert all defenses available to him.”  Ramos v. City of Santa Clara (1973) 35 Cal.App.3d 93, 95–96 (trial court properly allowed granted defense summary judgment based on defenses of release and accord and satisfaction despite not having been pled in the answer where plaintiff did not object to the motion on that ground and no prejudice was demonstrated as a result of failure to plead the defense in the answer).   

I.  Corvo failed to comply with CRC Rule 3.1324(a)(3) and (4)

            Corvo moves for leave to amend based on the results of testing performed by Indi Savitala.  Savitala conducted testing on Kaplan’s unit on 5-28-21.  See Dec. of J. Escano, ¶4, Ex. D.  Savitala filed a declaration in support of Corvo’s request for an injunction on 7-12-21.  Id.  Almahdi was also named in this action as a x-defendant in the x-complaint of Cross-Complainant Kaplan in May 2022.  See Dec. of J. Escano, ¶5.  Corvo knew that the flooring was improperly installed by July 2021 at the latest, and he knew of Almahdi’s identity and role in the flooring by May 2022. 

            Corvo was required to submit a declaration specifying “when the facts giving rise to the amended allegations were discovered” and “the reasons why the request for amendment was not made earlier.”  CRC Rule 3.1324(a)(3) and (4).  Corvo did not file this motion for leave to amend until February 2023.  Corvo fails to provide a declaration explaining his one to two year delay in seeking leave to amend. 

II.  Almadhi fails to establish prejudice as a result of the unexplained delay

            The trial date is three months away.  The discovery cutoff is only two months away.  The trial date has already been continued once.  The action has been pending for a little over two years. 

            Against this backdrop, Corvo is asking for leave to drastically expand the scope of this action.  The proposed FAC would expand this litigation from an action solely for declaratory relief without any damages claim to an action for multiple tort and statutory claims with a damages claim.  If amendment were allowed, the trial date have to be continued to accommodate Defendants’ right to demur, move for judgment on the pleadings, file cross-complaints and move for summary judgment.  Discovery would have to be reopened, because Almahdi has not had an opportunity to conduct discovery as to the four new claims against him.

Any prejudice resulting from Plaintiff’s undue delay is sufficiently alleviated by a continuance of the trial date and all associated cutoffs.  The trial date has only been continued once.  Although Plaintiff unduly delayed in seeking leave to amend, undue delay without prejudice is insufficient to deny leave to amend.  If the delay in seeking the amendment has not misled or prejudiced the other side, the liberal policy of allowing amendments prevails. Indeed, it is an abuse of discretion to deny leave in such a case even if sought as late as the time of trial.  See Higgins v. Del Faro (1981) 123 Cal.App.3d 558, 564-565. 

III. Almahdi failed to establish that leave to amend would be futile due to statute of limitations

Ordinarily, the validity of an amendment is not grounds for denial of leave to amend and its legal sufficiency should be tested in other appropriate proceedings.  See Atkinson v. Elk Corp. (2003) 109 Cal.App.4^th 739, 760.  “Leave to amend should be denied only where the facts are not in dispute, and the nature of the plaintiff's claim is clear, but under substantive law, no liability exists and no amendment would change the result.”  Edwards v. Superior Court (2001) 93 Cal.App.4th 172, 180  (reversing denial of leave to amend based on trial court’s erroneous application of CCP §364 as an affirmative defense).  A court’s discretion to deny an amendment based on its “substantive vitality” is most appropriately exercised in “cases in which the insufficiency of the proposed amendment is established by controlling precedent and where the insufficiency could not be cured by further appropriate amendment.”  California Casualty Gen. Ins. Co. v. Supr. Ct. (1985) 173 Cal.App.3d 274, 280-281 (disapproved of on other grounds).  Where the legal sufficiency of a proposed amendment is “a novel question almost certain to be tested in an appellate court, the preferable practice would be 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.”  Id. at 281.   

Almahdi argues the request for leave to amend must be denied, because the four proposed causes of action are time barred under CCP §§337.1(a)(1) and 338(b).  Almahdi argues the defectively installed flooring is a patent defect and any action for construction of an improvement to real property is four years after substantial completion of the improvement under CCP §337.1(a)(1).  Almahdi argues he completed installation in May 2017. 

Almahdi argues the nuisance claim is subject to a three-year statute of limitations. Almahdi argues an action based on a permanent nuisance must be brought within three years of creation of that nuisance. 

The applicability of CCP §337.1(a)(1) depends on a showing that (1) the installation of flooring is “construction of an improvement to real property”; (2) the improperly installed flooring is a “patent defect”; and (3) the date of “substantial completion” was May 2017.  Almahdi fails to establish that each of these elements of CCP §337.1(a)(1) are established based on the face of Plaintiff’s proposed FAC. 

            Almahdi also argues that the applicable statute of limitations to the nuisance claim is three years under CCP §338(b) and the three years is measured from “creation of permanent nuisance.”  See Opposition, 11:24.  Almahdi fails to demonstrate that the alleged nuisance qualifies as “permanent” based on the face of the complaint.  Almahdi fails to demonstrate that the proposed amendments are futile based on statute of limitations.