Judge James L. Crandall, Case 21-1204685 2022-12-08 Tentative Ruling

Judge: James L. Crandall, Case: 21-1204685, Date: 2022-12-08 Tentative Ruling

1. Motion for Leave to File Cross Complaint

2. Motion for Leave to File Cross Complaint

1. Motion 1

Defendants’ (John Stuart Jr. and Joanne Carson) Motion to File Cross-Complaint is GRANTED.

A party shall file a cross-complaint against any of the parties who filed the complaint or cross-complaint against him or her before or at the same time as the answer to the complaint or cross-complaint. (Code Civ. Proc. § 428.50(a).) Any other cross-complaint may be filed at any time before the court has set the first trial date. (Code Civ. Proc. § 428.50(b).)

A party shall obtain leave of court to file any cross-complaint except when one is filed within the time specified in subdivision (a) or (b). (Code Civ. Proc. § 428.50(c).) 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(c).)

A Cross-Complaint is compulsory if the causes of action arise out of the “same transaction, occurrence, or series of transactions or occurrences as the cause of action ... in (the) complaint.” (Code Civ. Proc. § 426.10(c).) Causes of action arise out of the “same transaction or occurrence” if the factual or legal issues are logically related. They need not be absolutely identical. The basic approach is to avoid duplication of time and effort (i.e., are any factual or legal issues relevant to both claim?). (Currie Medical Specialties, Inc. v. Bowen (1982) 136 Cal.App.3d 774, 777; Align Tech., Inc. v. Bao Tran (2009) 179 Cal.App.4th 949, 965.)

If Defendants’ causes of action against Plaintiffs are related to the subject matter of the underlying Complaint, then it must be raised by Cross-Complaint. (Code Civ. Proc. § 426.30.) Failure to plead it will bar Defendants from asserting them in any later lawsuit. (Id.) In addition, to be considered a compulsory Cross-Complaint, the related causes of action must have existed at the time Defendants served their Answer to the underlying Complaint. (Code Civ. Proc. § 426.30(a).)

Here, both the underlying Complaint and the proposed Cross-Complaint pertain to the wage and hour causes of action that are the subject matter of the Complaint. Thus, the factual and legal issues are logically related. Thus, the proposed Cross-Complaint is compulsory.

Plaintiffs contend that Defendants’ cross-complaint contains causes of action that are not valid and, therefore, should not be allowed. Ordinarily, the judge will not consider the validity of the proposed amended pleading in deciding whether to grant leave to amend. (Kittredge Sports Co. v. Superior Court (Marker, U.S.A.) (1989) 213 Cal. App. 3d 1045, 1048.) A cause of action subject to demurrer as being barred by res judicata and/or the statute of limitations can support denial of leave to amend. (See, Yee v. Mobilehome Park Rental Review Bd. (1998) 62 Cal.App.4th 1409, 1429.) But if further leave to amend would likely be granted, then grounds for demurrer or a motion to strike are premature, since the opposing party will have an opportunity to attack the validity of the amended pleading by way of demurrer or a motion to strike. (See, Kittredge Sports Co. v. Superior Court, supra, 213 Cal.App.3d at 1048.) Thus, grounds for a demurrer or motion to strike are premature. (Id.) After leave to amend is granted, the opposing party will have the opportunity to attack the validity of the amended pleading. (Id.) Based on the foregoing, analyzing the merits of the causes of action is premature.

Plaintiffs contend that Defendants acted in bad faith by delaying filing this motion and the delay has prejudiced Plaintiffs. Thus, the court has discretion to deny leave to amend. (See, Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 490.) Absent prejudice, mere delay in seeking amendment is not sufficient to overcome the liberal policy of granting leave to amend. (See, Higgins v. Del Faro (1981) 123 Cal.App.3d 558, 564 to 565.)

Silver Organizations Ltd. v. Frank, (1990) 217 Cal. App. 3d 94, 98 (Silver Organizations) provides: “The legislative mandate is clear. 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 further provides ““'Bad faith' is defined as '[t]he 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. [Citation.]' [Citations.]” (Pugh v. See's Candies, Inc. (1988) 203 Cal.App.3d 743, 764 [250 Cal.Rptr. 195].)” (Id. at 100.)

Here, there is no reason not to follow the liberal general rule and strong public policy favoring the resolution of all disputes between the parties in the same action. Plaintiffs have failed to establish bad faith.

Accordingly, the Court GRANTS Defendants’ (John Stuart Jr. and Joanne Carson) Motion to File Cross-Complaint. Defendants are to file Ex. 1 to the Motion within 10 days of this order.

Defendants to give notice.

2. Motion 2

Defendant John Carson’s Motion to File Cross-Complaint is GRANTED.

Plaintiffs contend that Defendant’s cross-complaint contains causes of action that are not valid and, therefore, should not be allowed. Ordinarily, the judge will not consider the validity of the proposed amended pleading in deciding whether to grant leave to amend. (Kittredge Sports Co. v. Superior Court (Marker, U.S.A.) (1989) 213 Cal. App. 3d 1045, 1048.) A cause of action subject to demurrer as being barred by res judicata and/or the statute of limitations can support denial of leave to amend. (See, Yee v. Mobilehome Park Rental Review Bd. (1998) 62 Cal.App.4th 1409, 1429.) But if further leave to amend would likely be granted, then grounds for demurrer or a motion to strike are premature, since the opposing party will have an opportunity to attack the validity of the amended pleading by way of demurrer or a motion to strike. (See, Kittredge Sports Co. v. Superior Court, supra, 213 Cal.App.3d at 1048.) Thus, grounds for a demurrer or motion to strike are premature. (Id.) After leave to amend is granted, the opposing party will have the opportunity to attack the validity of the amended pleading. (Id.) Based on the foregoing, analyzing the merits of the causes of action is premature.

Plaintiffs contend that Defendant acted in bad faith by delaying filing this motion and the delay has prejudiced Plaintiffs. Thus, the court has discretion to deny leave to amend. (See, Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 490.) Absent prejudice, mere delay in seeking amendment is not sufficient to overcome the liberal policy of granting leave to amend. (See, Higgins v. Del Faro (1981) 123 Cal.App.3d 558, 564 to 565.)

Accordingly, the Court GRANTS Defendant John Carson’s Motion to File Cross-Complaint. Defendants are to file Ex. 1 to the Motion within 10 days of this order.

Defendant to give notice.