Judge Kevin C. Brazile, Case 21STCV00572 2023-03-10 Tentative Ruling

TENTATIVE RULINGS

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STANLEY MOSK COURTHOUSE, DEPARTMENT 20 - JUDGE KEVIN C. BRAZILE

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Case Name: Southland Restoration Inc., v. California University of Alternative Medicine

Moving Party: [Plaintiff] – Southland Restoration Inc., a California Corporation

Responding Party: [Defendant] – California University of Alternative Medicine, a California Corporation

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.

This matter stems from a contract dispute between Southland Restoration Inc., (“Plaintiff”) and California University of Alternative Medicine (CUAM) (“Defendant”).

On February 2, 2020, a water pipe broke inside the second-floor bathroom within Defendant’s property located at 2333 Beverly Boulevard, Los Angeles, CA 90057 (the “Property”), causing extensive damage to the second floor. (See Complaint, ¶ 5-6). Defendant then retained Plaintiff to perform all property repairs related to the broken water pipe. (See Complaint, ¶ 8). Plaintiff alleges that Defendant refused to pay Plaintiff after the repairs were completed. Plaintiff then filed their Complaint on January 7, 2021, with the single cause of action of breach of contract.

Plaintiff now brings the instant Motion for Leave to File First Amended Complaint (“Motion”), filed on February 14, 2023. Defendant filed Opposition Papers on February 22, 2023. Plaintiff filed Reply Papers on March 3, 2023.

Generally, leave to amend should be liberally granted. However, unwarranted delay justifies denial of leave to amend. (Englert v. IVAC Corp. (1979) 92 Cal.App.3d 178, 190, 154 Cal.Rptr. 804;)

A court can deny leave to amend after long, inexcusable delay, where there is cognizable prejudice, such as discovery needed, trial delay, critical evidence lost, or added preparation expense. (Solit v. Tokai Bank (1999) 68 Cal. App. 4th 1435, 1448; Atkinson v. Elk Corp. (2003) 109 Cal. App. 4th 739, 761; Green v. Rancho Santa Margarita Mortgage Co. (1994) 28 Cal.App.4th 686, 692; Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 487. But see Emerald Bay Community Assn. v. Golden Eagle Ins. Corp. (2005) 130 Cal. App. 4th 1078, 1097 (unreasonable delay in making a motion to amend a complaint alone is sufficient grounds to exercise court discretion to deny leave to amend, even absent any prejudice); Leader v. Health Industries of America, Inc. (2d Dist. 2001) 89 Cal. App. 4th 603, 613.)

In considering whether there was unjustified delay as to a motion for leave to file an amended pleading, the court should consider whether the party, “was not diligent in offering the amendment after knowledge of the facts….” Solit v. Tokai Bank (1999) 68 Cal. App. 4th 1435, 1448 (citing Roemer v. Retail Credit Co. (1975) 44 Cal. App. 3d 926, 940).

“[I]t is irrelevant that new legal theories are introduced as long as the proposed amendments 'relate to the same general set of facts….” Atkinson v. Elk Corp. (2003) 109 Cal. App. 4th 739, 761.

In their Motion, Plaintiff requests leave to add a second cause of action, quantum meruit. (See First Amended Complaint, “FAC”). Plaintiff argues that the Motion is warranted because (1) there is recently discovered testimony that demonstrates there had never been a contract and (2) the defendant will not be prejudiced by the filing.

Plaintiff states that on February 13, 2023, Plaintiff took the deposition of Eun Ju Jang. During that deposition, Ms. Jang testified that there had never been a written contract between Plaintiff and Defendant. (See Motion, 3:18-20). Plaintiff alleged that there had been a written contract between Plaintiff and Defendant for the services performed by Plaintiff, however, due to an error in Plaintiff’s file retention system, Plaintiff has not been able to locate the written contract. (See Motion, 3:12-18). Plaintiff therefore relied on Defendant to produce the written contract during discovery.

Defendant counters that the delay is not justifiable because (1) this information was not recently discovered, but known since at least September 9, 2022 and possibly earlier, therefore the Plaintiff unreasonably delayed their current Motion, and (2) that Defendant will suffer prejudice. The Court agrees.

Here, the Plaintiff concedes that the written contract cannot be produced by Plaintiff because of “an internal software update.” (Opposition Papers, Exh. A, 25:1-8). Plaintiff’s first argument is that Plaintiff did not know a written contract did not exist and was justified in believing that the other party to the contract may have a readily obtainable contract for the work performed by Plaintiff, until Ms. Jang’s testimony on February 13, 2023. (See Reply Papers, 2:1-5). This reliance is not justifiable for two reasons.

First, in a breach of contract action, the burden is on the plaintiff to prove the elements of the cause of action, specifically, that a contract existed. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)

Second, the deposition of Juan Rodriguez took place on September 9, 2022 where it was clear that Plaintiff did not have a copy of the written contract, nor would Plaintiff be able to produce it. (See Opposition Papers, Exh. A, 25:23-25 and 26:1). Additionally, earlier attempts to obtain the written contract had proven unsuccessful. (See Declaration of David J. Furtado, hereinafter, “Furtado Dec.”). At the time of filing, on January 7, 2021, Plaintiff knew the existence of a contract was a key issue. Trial is scheduled for March 20, 2023. There does not appear to be any reason to have waited until the eve of trial to amend the complaint in the case the contract could not be procured.

Within their first argument, Plaintiff contends that any delay in bringing this Motion can be attributed to the Defendant in (a) not responding properly to Plaintiff’s Requests for Production of Documents and (b) recanting good faith efforts to negotiate a settlement. (See Reply Papers, 2:25) The Plaintiff’s Requests for Production of Documents was served via email on October 4, 2021. Any dispute or issue as to the responses should have been brought to the Court’s attention earlier to be resolved. Similarly, any issues of good faith during negotiation or settlement attempts, which Plaintiff argues occurred during June and July of 2022, should have also been brought to this Court’s attention earlier to have been resolved. However, it appears that these issues are now being brought through the instant Motion instead, as reasons for the delay. These reasons are not sufficient to excuse the delay.

Solit counsels against granting leave to amend “after long, inexcusable delay, where there is cognizable prejudice”. (Solit, supra at 1148). This leads the Court to the Plaintiff’s second argument. Plaintiff argues the Defendant will suffer no prejudice; the Court disagrees.

Within their second argument, Plaintiff contends that the discovery already done by Defendant for the breach of contract claim, overlaps with the quantum meruit claim sufficiently enough that Defendant need not conduct further discovery. (See Reply Papers, 3:11-28). Although the causes of action are related, they are not the same and each requires different elements that the other does not.

First, it is worth noting that discovery has closed. Second, if Defendant has done no discovery on issues related to quantum meruit, then trial would need to be delayed to allow both parties the opportunity for discovery on those issues related to a quantum meruit cause of action. This is the type of concern that both Solit and Magpali take direct aim at. Where additional discovery or trial delay is necessary, this Court is well within its discretion to deny the request.

Accordingly, as Plaintiff has presented no excuse for the delay in bringing the current Motion, the Motion for Leave to File First Amended Complaint is DENIED.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.