Judge Holly J. Fujie, Case Number: 23STCV06136, Date: 2023-08-24 Tentative Ruling

On September 7, 2023, Plaintiff Jinhee Kim filed the operative Second Amended Complaint alleging causes of action for (1) breach of oral agreement, (2) wrongful retention of security deposit per Civ. Code §1950.7(C), (3) money had and received, (4) breach of covenant of quiet enjoyment, and (5) California unfair competition under Cal. Bus. & Prof. Code §§ 17200, et seq.

Defendant Brandon Kim seeks leave to file a cross-complaint asserting claims for Plaintiff’s alleged failure to pay $40,000 monthly from the total revenue collected by Plaintiff for a total due of $422,500. Defendant alleges three causes of action for (1) breach of contract, (2) common counts, and (2) common counts.

On December 26, 2023, Defendant filed his cross-complaint. On January 24, 2024, Plaintiff filed a Motion to Strike the entire cross- complaint filed on December 26, 2024. On February 26, 2024, the Court issued its ruling granting the Motion to Strike of Plaintiff in the entirety without prejudice.

On March 7, 2024, Defendant filed the instant motion. On March 18, 2024, Plaintiff filed an opposition. On April 5, 2024, Defendant filed his reply.

Plaintiff requests the Court take judicial notice of the following pursuant to California Evidence Code Section 452 (d): Complaint Filed on 23STCV10421 on May 9, 2023, currently pending in Dept. 68 of the Los Angeles County Superior Court, Stanley Mosk Courthouse - Exhibit 1. The Request for Judicial Notice is GRANTED, but not for the truth of the matters stated therein.

Defendant moves for leave to file the cross-complaint because it is a compulsory cross-complaint. (Not. of Mot. p.2.) Plaintiff argues that Defendant acted in bad faith and the motion is untimely. (Opp’n p.4.)

Parties generally must file a cross-complaint against the party who filed the complaint before or at the same time as the answer to the complaint. (Code Civ. Proc. § 428.50(a).) Parties seeking to file untimely compulsory cross-complaints, however, may file with the Court for leave to do so, even though the failure to timely file resulted from oversight, inadvertence, mistake, neglect, or other cause. (Id. § 426.50.) In such a case, after notice to the adverse party, the Court must grant leave to file the cross-complaint if the party acted in good faith. Courts liberally construe section 426.50 to avoid forfeiture of causes of action. (Ibid.)

The purpose of the compulsory cross-complaint statute is to prevent piecemeal litigation. (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 959.) Compulsory cross-complaints consist of those causes of action existing at the time of service of the answer that the defendant must bring against the plaintiff, or else forfeit the right to bring them in any other action. (Code Civ. Proc., § 426.30(a).) Specifically, compulsory cross-complaints consist of the causes of action that “arise out of the same transaction, occurrence, or series of transactions or occurrences as the cause of action which the plaintiff alleges in his complaint.” (Id. § 426.10(c).) To avoid piecemeal litigation, courts liberally construe the term “transaction”—it is “ ‘not confined to a single, isolated act or occurrence . . . but may embrace a series of acts or occurrences logically interrelated.’ ” (Align Technology, at p. 960.)

Thus, a motion to file a compulsory cross-complaint at any time during the course of the action must be granted where forfeiture would otherwise result, unless the moving party engaged in bad faith conduct. (Silver Organizations Ltd. v. Frank (1990) 217 Cal.App.3d 94, 99.) The determination that the moving party acted in bad faith must be supported by substantial evidence. (Ibid.; Foot’s Transfer & Storage Co. v. Superior Court (1980) 114 Cal.App.3d 897, 902 [“We conclude that this principle of liberality requires that a strong showing of bad faith be made in order to support a denial of the right to file a cross-complaint under this section”].)

Here, Defendant submits the declaration of his attorney, Tyler Porto. Tyler Porto states that Defendant filed his cross-complaint on the same day that he filed his answer to the Second Amended Complaint. (Porto Decl. ¶¶ 5-6,8; Ex. B-C.) However, Tyler Porto received a notice of e-filing rejection of the Cross-Complaint from One Legal on December 26, 2023, which provided: “Reject Reason Other. Error in pleading. Party names written on Item #1 does not match party caption. Item #1 has Brandon Kim, but party caption for cross-complainant/plaintiff is Jinhee Kim, an individual. Do not use ‘et al.’ ” (Porto Decl. ¶ 11; Ex. D.) Later that day, Brandon Kim fixed those deficiencies and resubmitted the cross-complaint for e-filing, and this time the cross-complaint was accepted. (Porto Decl. ¶ 12.) Nevertheless, the Court finds that regardless of the reason for the delay in e-filing, the cross-complaint was untimely by four days. Additionally, on February 26, 2024, the Court stated that Defendant’s untimely filing “violates CCP § 428.50(c)’s requirement to obtain leave from the court” and therefore granted Plaintiff’s motion to strike in its entirety, without prejudice to Brandon Kim’s seeking leave to file his Cross-Complaint by motion. (Minute Order 02/26/24.)

Parties seeking to file untimely compulsory cross-complaints, however, may file with the Court for leave to do so, even though the failure to timely file resulted from oversight, inadvertence, mistake, neglect, or other cause. (Code Civ. Proc. § 426.50.) In such a case, after notice to the adverse party, the Court must grant leave to file the cross-complaint if the party acted in good faith. Courts liberally construe section 426.50 to avoid forfeiture of causes of action. (Ibid.)

Defendant argues that he is not acting in bad faith because the cross-complaint is directly related to the allegations made by Plaintiff in the Second Amended Complaint. (Mem. P&A p.12.) Plaintiff argues that Defendant acted in bad faith because the cross-complaint is a defensive tactic. (Opp’n p. 4.) The Court is unpersuaded by Plaintiff’s argument because Plaintiff fails to provide any evidence showing that Defendant acted in bad faith in seeking leave to file the cross-complaint, but rather only provides conclusory arguments.

Accordingly, the motion for leave to file the cross-complaint is GRANTED. Defendant is ordered to file his Cross-Complaint within five (5) court days of the date of this order.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court