Judge: James L. Crandall, Case: 20-1149836, Date: 2022-07-21 Tentative Ruling

Motion for Leave to File Cross Complaint

Defendant, California Business Bank (CBB) moves for leave to file a Cross-Complaint for fraud against Plaintiff Eugene Louis Blumberg dba Papa Gino’s Safes Service & Security Solutions (Blumberg).

CBB contends that it entered into an agreement with Blumberg (the “Agreement”) pursuant to which Blumberg was to provide it certain banking services relating to smart safes in exchange for compensation. According to CBB, it later learned that the smart safes at issue required a subscription fee which CBB had to incur and was unable to pass onto its customers. CBB contends that it has suffered damages as a result of being unable to pass on these subscription fees and moves for leave to file a Cross-Complaint against Blumberg to recover these damages.

Code of Civil Procedure section 426.50 provides:

“A party who fails to plead a cause of action subject to the requirements of this article, whether through oversight, inadvertence, mistake, neglect, or other cause, may apply to the court for leave to amend his pleading, or to file a cross-complaint, to assert such cause at any time during the course of the action. 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.”

“A policy of liberal construction of section 426.50 to avoid forfeiture of causes of action is imposed on the trial court. A motion to file a cross-complaint at any time during the course of the action must be granted unless bad faith of the moving party is demonstrated where forfeiture would otherwise result. 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 (1990) 217 Cal.App.3d 94, 98–99.)

CBB’s proposed Cross-Complaint is compulsory because it alleges a related cause of action against Plaintiff Blumberg.

Therefore, the motion for leave to file a cross-complaint is granted.

Defendant also moves for an order continuing trial and all related trial dates.

On April 7, 2022, the court ordered that trial be continued to March 27, 2023 and that the Mandatory Settlement Conference be continued to February 24, 2023 pursuant to the parties’ stipulation.

Therefore, the motion is moot as to the request to continue trial.

Moving Party to give notice.

Future hearing dates

2/24/23 – MSC

3/27/23 – Jury Trial