Judge: Kristin S. Escalante , Case: 21STCV22188, Date: 2023-03-23 Tentative Ruling
Case Number: 21STCV22188 Hearing Date: March 23, 2023 Dept: 24
MOVING PARTY: Prolink Staffing Services, LLC
(Defendant)
RESP. PARTY: Amanda Bowers (Plaintiff); Susan
Tidwell (Plaintiff)
NATURE OF PROCEEDINGS:
The
above-captioned matters are called for hearing.
The Court has read
the moving papers in the above-captioned motions and announces its tentative
ruling in open Court.
The Motion for Leave to File a Cross-Complaint reservation
no.: 533812245550 filed by Defendant Prolink Staffing Services, LLC on
02/17/2023 is GRANTED.
Defendant
Prolink Staffing Services, LLC (“Defendant”) moves for leave to file a
cross-complaint in this action against Plaintiffs Amanda Bowers and Susan
Tidwell (collectively “Plaintiffs”). The proposed cross-complaint alleges one
cause of action for declaratory relief.
By way of
background, on June 14, 2021, Plaintiffs filed the present Private Attorneys
General Act (“PAGA) action against Defendant for civil penalties under PAGA.
Plaintiffs are travel nurses whom Defendant hired on assignments in California.
Plaintiffs filed the operative second amended complaint (“SAC”) alleging:
failure to account for diem payments as they relate to overtime payments,
failure to pay minimum wages, failure to pay all hours worked, failure to
provide meal/rest breaks, failure to reimburse employees for work expenditures,
failure to pay wages due upon termination, failure to furnish accurate wage
statements, and failure to timely pay wages.
On November 4,
2022, the court ordered the parties to meet and confer regarding the per Diem
claim and stated “[c]ounsel are to ordered to file a stipulation regarding
437(c)(t).” (Nov. 4, 2022, Minute Order.) As presented in the moving papers,
Defendant states the parties were unable to come to an agreement on a motion
under Code of Civil Procedure section 437c subdivision (t), and Defendant had
no recourse but to request leave to file a declaratory judgment cross-complaint
on the legal issues surrounding Plaintiffs per diem claim.
A party against whom a cause of
action has been asserted may file a cross-complaint regarding “[a]ny cause of
action he has against a person alleged to be liable thereon, whether or not
such person is already a party to the action, if the cause of action asserted
in his cross-complaint (1) arises out of the same transaction, occurrence, or
series of transactions or occurrences as the cause brought against him or (2)
asserts a claim, right, or interest in the property or controversy which is the
subject of the cause brought against him.” (Code Civ. Proc. § 428.10(b). A
party shall obtain leave of court to file a cross-complaint if it is not concurrently
filed with the answer or filed at any time before the court sets a trial date.
(Code Civ. Proc., §428.50.) Leave may be granted in the interest of
justice at any time during the course of the action. (Code Civ. Proc., §
428.10, subd. (c).)
Cross-claims against
complainants arising from the same transaction or series thereof, existing at
the time of filing an answer, are compulsory. (See, e.g., Code Civ. Proc.
§426.30(a); Al Holding Co. v. O’Brien & Hicks, Inc. (1999) 75 Cal.App.4th
1310, 1313-14.) Defendant filed an answer to Plaintiffs’ second amended
complaint (“SAC”) on January 17, 2023 and did not file a concurrent cross
complaint. Accordingly, the court the decision as to granting permission to
file a “permissive cross-complaint is solely. . .[at] the trial court’s
discretion.” (Crocker Nat. Bank v. Emerald (1990) 221 Cal.App.3d 852, 864.)
Leave to file compulsory
cross-complaints must be granted where moving parties acted in good faith.
(Code Civ. Proc. § 426.50; Silver Organizations, Ltd. v. Frank (1990) 217
Cal.App.3d 94, 98-99.) “[W]hat constitutes “good faith”-or lack of it-under
Code of Civil Procedure Section 426.50 must be determined in light of and in
conformity with the liberality conferred upon the trial courts by the section and
by prior law. … [T]his 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.” (Foot’s Transfer & Storage Co. v.
Superior Court (1980) 114 Cal.App.3d 897, 902.) A determination that the
petitioner acted in bad faith may be premised on “substantial injustice or
prejudice” to the opposing party. (Id. at p. 903; see also Gherman v. Colburn
(1977) 72 Cal.App.3d 544, 558-59 [stating that leave was properly denied when
the defendant’s motion “was merely a tactical strategic maneuver to deprive
plaintiffs of a right to a jury trial”].)
“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.) “Substantial
evidence” must support the trial court’s decision to deny the filing of a
cross-complaint. (Id. at p. 99.)
Here, the
substance of the parties’ dispute is whether Defendants have stated a claim for
declaratory relief which can be properly brought in a cross-complaint.
Defendant seeks declaratory relief on whether Defendant’s meal waivers are
valid where Defendant prepared and presented the waivers to Plaintiffs,
Plaintiffs signed, but Defendant did not sign.
Plaintiffs
argue the declaratory relief claim is an improper attempt to evade the
requirements of Code of Civil Procedure section 437c subdivision (f) (“Section
437c (f)”), while Defendant argues Plaintiff has made it impossible to proceed
in any other manner. Specifically, the parties need the issue of the meal
waivers adjudicated and Plaintiffs have refused to submit a limited motion for
summary judgment of a legal issue that does not completely dispose of a cause
of action under Code of Civil Procedures section 437c subdivision (t).
Additionally, Defendant argues the purpose of adjudicating this narrower issue
is to make Plaintiffs meal period claim manageable.
Plaintiffs
argue vigorously regarding the validity of the declaratory relief claim and
that leave to file the cross-complaint must be denied because the claim is
improper. Plaintiffs do not argue Defendant acted in bad faith or that it will
be prejudiced by proceeding with the declaratory relief claim. Indeed, the
prior action in the suit regarding this issue indicates that Defendant has
proceed with this course after exhausting all other options to address the
issue at hand. While the court may deny a motion to file a demurrable
cross-complaint, the standard does not require the court to examine the
validity of the underlying cause of action in motion for leave to file a
cross-complaint. (See Glogau v. Hagan (1951) 107 Cal.App.2d 313, 320 [stating
“The cross-complaint was demurrable. This was ample ground for rejecting
it.”].)
Here, Defendant
has demonstrated good cause for bringing the present motion to adjudicate a
narrow issue which can make the present suit more manageable. Under the “policy
of liberal construction of section 426.50 to avoid forfeiture of causes of
action is imposed on the trial court” granting leave to file the
cross-compliant is appropriate. (See Silver, supra, 217 Cal.App.3d at p.
98-99.)
Although not required to do so,
the court addresses Plaintiffs arguments as to the declaratory relief claim
briefly. Plaintiff argues that the meal waivers are already a subject of the
litigation and thus declaratory relief cannot be sought. To state a claim for
declaratory relief, a party need only allege “[t]he existence of an ‘actual controversy relating to the legal rights
and duties of the respective parties[]’. . . .”¿ (Ludgate Ins. Co. v. Lockheed
Martin Corp.¿(2000) 82 Cal.App.4th 592, 605.) Defendant’s allegations regarding
the validity of the meal waivers constitute a controversy regarding a narrower
issue between the parties. Under Hood v. Superior Court (1995) 33 Cal.App.4th
319, it appears a motion for summary judgment on defendant’s declaratory relief
claim would be unsuccessful. In Hood, plaintiff insurer amended its pleadings
to add a declaratory relief cause of action to assert issues already in dispute
in the underly action. The court of appeal reversed the granting of summary
judgment on the declaratory relief cause of action under Section 437c (f)
because it did not adjudicate the entirety of any cause of action. (Id. at pp.
323-24.) While this suggest Defendants may not be able to obtain summary
adjudication of the issue, it does not support the conclusion that the
declaratory relief claim may not be brought at all.
The court defers the
question of whether the declaratory relief claim is sufficiently prospective
given its lack of bearing on a motion for leave to file a cross-complaint.
Plaintiff’s arguments do not constitute
substantial evidence of bad faith appropriate to deny the motion. A demurrer is
the more appropriate mechanism to address the issues raised.
The motion is
granted.
Moving party is directed to give notice.