TENTATIVE ORDER

Plaintiff/Cross-Defendant The One Experience, LLC’s Motion for Leave to Substitute as the Plaintiff in this Action is GRANTED.

Defendant/Cross-Complainant David Loomstein’s Motion to Dismiss or in the Alternative for an Order Requiring Non-Resident Plaintiff to File an Undertaking to Secure Award of Costs in the Amount of $46,535.00 is DENIED.

Defendant/Cross-Complainant David Loomstein to give notice.

REASONING

Defendant/Cross-Complainant David Loomstein (“Defendant”) moves the Court for an order dismissing this action or, alternatively, requiring Plaintiff/Cross-Defendant The One Experience, LLC (“Plaintiff”) to file an undertaking to secure an award of costs in the amount of $46,535.00 on the ground that Plaintiff is a non-resident plaintiff. Plaintiff moves the Court for leave to substitute Flixcity Mgmt Inc. as the Plaintiff in this action pursuant to Corporations Code section 1107, subdivision (d), on the ground that The One Experience, LLC was merged into Flixcity Mgmt Inc. At the outset, the Court notes that Defendant filed no substantive opposition to Plaintiff’s motion to substitute, instead simply “incorporating by reference” its motion to dismiss. Here, an opposition to the motion to substitute is not dispositive of the motion, i.e., Plaintiff retains the burden of showing that substituting is proper, but this does not relieve Defendant of the duty to provide argument where it intends to oppose a motion. The practice of “incorporating by reference” the arguments from another filing is not well taken. Plaintiff is advised that future attempts to “incorporate by reference” will result in the Court finding the motion to be unopposed based on failure to provide argument as required by rule 3.1113(b) of the California Rules of Court.

Requests for Judicial Notice

Defendant requests judicial notice of the Court’s minute order dated March 1, 2023, granting Defendant’s motion for an order compelling Plaintiff to post an undertaking. Defendant’s request is GRANTED pursuant to Evidence Code section 452, subdivision (d).

Plaintiff requests judicial notice of the declaration of Ken Schwenker, filed with Plaintiff’s opposition to Defendant’s motion to require Plaintiff to post an undertaking in the appeal of this action; Plaintiff’s opposition to the Order to Show Cause and the declarations of Ken Schwenker and John G. Burgee supporting the same; the declaration of Ken Schwenker, filed with Plaintiff’s motion to vacate the order granting Defendant’s special motion to strike; and the Court’s minute order dated December 11, 2023. Plaintiff’s request is GRANTED pursuant to Evidence Code section 452, subdivision (d).

Defendant also requests judicial notice of its motion to dismiss. Defendant’s request is GRANTED pursuant to Evidence Code section 452, subdivision (d).

Analysis

Notably, Defendant’s motion to dismiss or require an undertaking is essentially a motion asking the Court to reconsider its minute order dated December 11, 2023, despite Defendant’s arguments to the contrary. The procedural history here, in short, is that Defendant’s prior motion for an order compelling Plaintiff to post an undertaking was granted on March 1, 2023, and after several appearances by the parties before the Court, as well as a prior motion for leave to substitute the plaintiff in this action, the Court ultimately terminated the requirement for Plaintiff to post bond in its minute order dated December 11, 2023, on the ground that less than $1,500 in costs had been incurred by Defendant to date, and there was no basis for an award of attorney fees readily apparent, such that an undertaking was no longer proper. Defendant argues the present motion to dismiss cannot be considered a motion for reconsideration because it was filed before the Court’s December 11, 2023, minute order. This may be factually accurate, but this does not account for the fact that the Court issued an order after the motion was filed addressing the exact issue raised in the present motion, specifically whether an undertaking was proper, and the Court concluded it was not. Thus, should the Court find it proper to substitute the plaintiff in this action, Defendant’s motion must be denied.

As to Plaintiff’s motion to substitute the plaintiff in this action, the court may grant leave to amend the pleadings at any stage of the action. (Code Civ. Proc., § 473, subd. (a).) Courts apply a policy of great liberality in permitting amendments to the complaint “at any stage of the proceedings, up to and including trial,” absent prejudice to the adverse party. (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761.) Prejudice exists where the amendment would require delaying the trial, resulting in loss of critical evidence, added costs of preparation, or an increased burden of discovery. (See Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 486-488 [trial court’s denial of leave to amend was proper where those factors were present].)

Plaintiff moves the Court for leave to substitute Flixcity Mgmt Inc. as the Plaintiff in this action pursuant to Corporations Code section 1107, subdivision (d), on the ground that The One Experience, LLC was merged into Flixcity Mgmt Inc. Corporations Code section 1107, subdivision (d), provides that “[a]ny action or proceeding pending by or against any disappearing corporation may be prosecuted to judgment, which shall bind the surviving corporation, or the surviving corporation may be proceeded against or substituted in its place.” Corporations Code section 1107, subdivision (a), also provides as follows:

Upon merger pursuant to this chapter the separate existence of the disappearing corporations ceases and the surviving corporation shall succeed, without other transfer, to all the rights and property of each of the disappearing corporations and shall be subject to all the debts and liabilities of each in the same manner as if the surviving corporation had itself incurred them.

In support of the motion, Plaintiff provides the Articles of Incorporation of Flixcity Mgmt Inc., an Agreement of Merger between Flixcity Mgmt Inc. and The One Experience LLC, and the Certificate of Merger as to the merger between Flixcity Mgmt Inc. and The One Experience LLC. (Mot., Burgee Decl. ¶ 2, Exs. 1-3.)

In its March 1, 2023, minute order initially requiring the posting of a bond, the Court ruled that The One Experience, LLC had not lost its right to continue as the plaintiff in this action, and Flixcity Mgmt Inc. did not automatically become the plaintiff by way of merger. (Order dated Mar. 1, 2023, at p. 5.) Here, the evidence indicates that Plaintiff has merged with Flixcity Mgmt Inc., and Flixcity Mgmt Inc. is identified in the Certificate of Merger as the surviving entity, such that Flixcity Mgmt Inc. may be substituted in place of Plaintiff pursuant to Corporations Code section 1107, subdivision (d).

Defendant fails to address the application of Corporations Code section 1107 in his motion to dismiss or reply to the same, and the Court notes that Plaintiff did not cite this statute in his opposition to the initial motion to post undertaking, such that the Court lacked a basis to deny the motion on a ground not raised by Plaintiff, as Plaintiff had only provided a conclusory statement that Flixcity Mgmt Inc. was the proper new plaintiff. At this juncture, the Court finds it proper to substitute Flixcity Mgmt Inc. as the plaintiff in this action pursuant to Corporations Code section 1107, subdivisions (a) and (d). Accordingly, Plaintiff/Cross-Defendant The One Experience, LLC’s Motion for Leave to Substitute as the Plaintiff in this Action is GRANTED. Defendant/Cross-Complainant David Loomstein’s Motion to Dismiss or in the Alternative for an Order Requiring Non-Resident Plaintiff to File an Undertaking to Secure Award of Costs in the Amount of $46,535.00 is DENIED.