Judge Lee W. Tsao, Case Number: 21NWCV00430, Date: 2023-12-20 Tentative Ruling

Judge: Lee W. Tsao, Case: 21NWCV00430, Date: 2023-12-20 Tentative Ruling

Case Number: 21NWCV00430 Hearing Date: March 6, 2024 Dept: C

ATV, INC. v. INTEGRITY INSURANCE SERVICES, INC.

CASE NO.: 21NWCV00430

HEARING: 3/6/24 @ 10:30 AM

TENTATIVE RULING

Plaintiff ATV Inc.’s motion for leave to amend to substitute plaintiff HYE, LLC is GRANTED.

Moving Party to give NOTICE.

Background

This is an insurance broker malpractice action. On December 28, 2018, a fire broke out at 1395 E. Washington Street in Colton, California. The insurer, Allied World National Assurance Company, denied coverage based on an exclusion for vacant properties. Plaintiff ATV, Inc., also known as American Tire Depot, alleges that its broker, Integrity Insurance Services, Inc. dba Hawley Insurance Services did not procure adequate commercial property insurance on its behalf.

Plaintiff sues Integrity Insurance Services, Inc. for the following:

1. Professional Negligence;

2. Negligent Misrepresentation;

3. Breach of Contract; and

4. Declaratory Relief.

Legal Standard

Amendments naming a new party plaintiff are permitted if there is no change in the claim being asserted. (Branick v. Downey Sav. & Loan Ass'n (2006) 39 Cal.4th 235, 243.) Similar principles govern whether an amendment relates back for purposes of the statute of limitations to the date on which the original complaint was filed. (Id., at 244.) The relation-back doctrine requires that the amended complaint (1) rests on the same general set of facts, (2) involve the same injury, and (3) refer to the same instrumentality. (Ibid.)

The Court has discretion to deny leave to amend when the party seeking the amendment has been dilatory and the delay has prejudiced the opposing party. (See Hirsa v. Super. Ct. (Vickers) (1981) 118 Cal.App.3d 486, 490.)

Requests for Judicial Notice

Defendant requests judicial notice of the following: (1) Statement of Information for HYE, LLC filed with California Secretary of State on September 13, 2021; (2) Statement of Information for ATV, Inc. filed with the California Secretary of State on October 28, 2020; and (3) Statement of Information for ATD Holdings, Inc. filed with California Secretary of State on December 14, 2022.

Materials prepared by private parties that are on file with governmental agencies, such as the Secretary of State, are not official records of which judicial notice may be taken. (People v. Thacker (1985) 175 Cal.App.3d 594, 598-99.) Thus, the Court denies Defendant’s requests for judicial notice.

Leave to Amend to Substitute Plaintiff

Plaintiff moves to substitute HYE, LLC as the named plaintiff. Plaintiff asserts that HYE, LLC is also a named insured, its relationship with the current plaintiff was known to Hawley, it has standing, and the claims alleged would be the same. Plaintiff also argues that no prejudice would result.

Defendant argues that HYE, LLC’s claims are barred by the statute of limitations because they do not “relate back” to the original complaint. According to Defendant, HYE, LLC’s claims entail a distinct injury and would impose greater liability upon Defendant than Plaintiff’s claims. Defendant argues HYE, LLC would assert claims “by the owner of the Subject Property, which heretofore have not been asserted.” (Opp., p. 11:12-14.) However, this argument is undermined by Defendant’s assertion elsewhere that original plaintiff’s itemized damages consist of the “replacement cost of the structure; lost business property; and prejudgment interest.” (Defendant’s Memorandum of Points and Authorities in Support of Motion for Summary Judgment, p. 5:22-25, italics added.)

The Court finds that there appears to be no distinct injury if HYE, LLC becomes the plaintiff. Both are named insured on the insurance policy. (Decl. Tchaghlassian, ¶ 4, Ex. 1.) As the owner of the real property, HYE, LLC has appeared only to suffer the loss of the structure of the real property. As the business that planned to operate at the subject property, original plaintiff also appears to suffer the loss of the structure of the real property. The real property would likely be used for the plaintiff’s business activities, including housing Plaintiff’s business. Substituting HYE, LLC as the plaintiff would not add injuries to the lawsuit.

Defendant also argues that prejudice will result because there would be insufficient time to challenge HYE, LLC’s belated claim by summary judgment. Defendant further argues that if a continuance were granted, it would need to conduct additional discovery as to the new plaintiff, file motions, and prepare for trial. However, there are no new claims asserted. Plaintiff only seeks to substitute HYE, LLC as the plaintiff. In addition, Defendant argues that Plaintiff unreasonably delayed this substitution. Because the Court found that no prejudice will result, it will not adjudicate this issue.

Thus, Plaintiff’s motion for leave to substitute plaintiff HYE, LLC is GRANTED.