Judge: H. Jay Ford, III, Case: 24SMCV00195, Date: 2025-02-20 Tentative Ruling

Case Number: 24SMCV00195    Hearing Date: February 20, 2025    Dept: O

 Case Name:  Modeste v. UDR Marina Pointe LLC

SUBJECT:                 MOTION FOR LEAVE TO FILE CROSS-COMPLAINT

MOVING PARTY:   Defendant UDR Marina Pointe LLC dba The Westerly on Lincoln

RESP. PARTY:         Plaintiff Timothy Modeste

TENTATIVE RULING

            Defendant UDR Marina Pointe LLC’s Motion for Leave to File Cross-Complain is GRANTED. The proposed Cross-Complaint attached as Exhibit 2 to the Wild Declaration is ordered to be separately filed forthwith.

REASONING

After having previously filed an answer, a defendant seeking to file a cross-complaint against the plaintiff must obtain leave of court. (See Code Civ. Proc., §428.50, subd. (a) and (c).) If the proposed cross-complaint is permissive, leave of court may be granted "in the interests of justice" at any time during the course of the action. (Code Civ. Proc. § 428.50, subd. (c).) On the other hand, if the proposed cross-complaint is compulsory, leave must be granted so long as defendant "acted in good faith." (Code Civ. Proc., § 426.50 [court "shall" grant leave to file a compulsory cross-complaint brought in good-faith]; see also Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2024) ¶ 6:563.)

A compulsory cross-complaint can by definition only be against the plaintiff. (See Code Civ. Proc. § 426.50.) A compulsory cross-complaint is one that arises out of the "same transaction, occurrence, or series of transactions or occurrences as the cause of action which plaintiffs allege in their complaint." See Code Civ. Proc. §§426.10, subd. (c) and 426.30, subd. (a).) “In the breach of contract context, the rule means any claims the defendant has against the plaintiff based on the same contract generally must be asserted in a cross-complaint, even if the claims are unrelated to the specific breach or breaches that underlie the plaintiff's complaint.” (LGCY Power, LLC v. Superior Court (2022) 75 Cal.App.5th 844, 861.)

Regarding the filing of a cross-complaint, “[b]ad faith, is defined as the opposite of ‘good faith,' generally implying or involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake, but by some interested or sinister motive, not simply bad judgment or negligence, but rather the conscious doing of a wrong because of dishonest purpose or moral obliquity; it contemplates a state of mind affirmatively operating with furtive design or ill will.” (Silver Organizations Ltd. v. Frank (1990) 217 Cal.App.3d 94, 100.)

Ordinarily, the validity of the proposed amended pleading will not be considered in deciding whether to grant leave to amend, instead, "even if the proposed legal theory is a novel one, 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.” (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1047     

Defendant UDR Marina Pointe LLC (“UDR”) moves for leave to a cross-complaint against Plaintiff Timothy Modeste (“Modeste”) after UDR filed their answer to Modeste’s Complaint on 6-14-24. UDR filed for leave on 10-9-24, a little less than four months after filing their answer. UDR declares that the proposed Cross-Complaint is for Breach of Contract regarding Modeste’s alleged past due rent under a lease agreement between UDR and Modeste for the amount of $59,732.84—damages that were not awarded in a prior UD action (Case No. 23SMUD00603) between the parties awarding possession of the subject premises to UDR with damages expressly reserved. (See Wild Decl., ¶¶ 4, 15–20, Ex. 2.)

UDR declares that they discovered the facts supporting the Cross-Complaint—that no money judgment was entered in the prior UD case—while UDR and UDR’s counsel were preparing responses to Modeste’s discovery requests, and on 9-12-24 UDR’s counsel sent an email to Modeste requesting a stipulation to the cross-complaint filing. (Wild Decl., ¶¶ 10, 11.)

            Trial is set for 8-17-26, thus the filing of the cross-complaint is over a year prior to trial. There is no showing of bad faith since UDR quickly discovered the necessity to file a cross-complaint within four months of filing the answer, communicated this information to Modeste who failed to stipulate, and were thus forced to file a motion for leave.

            Modeste does not provide any persuasive arguments of prejudice as trial is over a year away, and discovery is still ongoing.

            Additionally, the cross-complaint is compulsory because the cross-complaint arises from the parties landlord-tenant relationship and their lease agreement. The Complaint alleges a cause of action for implied warranty of habitability, and the Cross-Complaint alleges a claim for unpaid rent which both arise out of the lease agreement between the parties. Thus, both the complaint and cross-complaint arise from the same transaction and occurrences. Further, there is no showing of bad faith, nor is a there a showing of prejudice due to trial set one year out.