Judge: Lynne M. Hobbs, Case: 20STCV47452, Date: 2025-04-24 Tentative Ruling
Case Number: 20STCV47452 Hearing Date: April 24, 2025 Dept: 61
JAE KU CHANG vs JAE MIN CHANG
Tentative
Plaintiff Jae Ku Chang’s Motion for Leave to File Second Amended Complaint is DENIED.
Defendant to give notice.
Analysis
I. MOTION FOR LEAVE TO AMEND
Code Civ. Proc. section 473 subd. (a)(1) states that:
The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect; and may, upon like terms, enlarge the time for answer or demurrer. The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars; and may upon like terms allow an answer to be made after the time limited by this code. “The trial court has discretion to permit or deny the amendment of the complaint, but instances justifying the court's denial of leave to amend are rare.” (Armenta ex rel. City of Burbank v. Mueller Co. (2006) 142 Cal.App.4th 636, 642.) “Although courts are bound to apply a policy of great liberality in permitting amendments to the complaint at any stage of the proceedings, up to and including trial [Citations], this policy should be applied only ‘[w]here no prejudice is shown to the adverse party . . .’ [Citation.] A different result is indicated ‘[w]here inexcusable delay and probable prejudice to the opposing party’ is shown. [Citation.]” (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 487.)
Pursuant to California Rule of Court Rule 3.1324, “[a] motion to amend a pleading before trial must: (1) Include a copy of the proposed amendment or amended pleading, which must be serially numbered to differentiate it from previous pleadings or amendments; (2) State what allegations in the previous pleading are proposed to be deleted, if any, and where, by page, paragraph, and line number, the deleted allegations are located; and (3)State what allegations are proposed to be added to the previous pleading, if any, and where, by page, paragraph, and line number, the additional allegations are located.” Such a motion must include a supporting declaration stating, “(1) The effect of the amendment; (2) Why the amendment is necessary and proper; (3) When the facts giving rise to the amended allegations were discovered; and (4) The reasons why the request for amendment was not made earlier.” (CRC Rule 3.1324, subd. (b).)
Plaintiff Jae Ku Chang (Plaintiff) seeks leave to file a Second Amended Complaint (SAC) alleging two new causes of action for aiding and abetting and accounting against new corporate defendants Korea Times Los Angeles, Inc., Pako Realty Corp., JKM Properties, LLC, and Hankook Investments, LLC (Entities). Plaintiff argues that the FAC presently alleges that Defendant defrauded Plaintiff by inducing him to sign a securities purchase agreement for the sale of Plaintiff’s interest in two companies — Korea-Times Los Angeles, Inc. and Hankook Investments, LLC — and that the SAC will re-frame the allegations as involving a joint venture agreement between Plaintiff and Defendant encompassing the Entities. (Chung Decl. ¶¶ 10–13, Exh. A.) Plaintiff’s counsel states that the necessity of the amendment became clear after he was substituted into the case in June 2024 and reviewed the case materials. (Chung Decl. ¶¶ 5–9.)
Defendant in opposition argues that Plaintiff has unreasonably delayed bringing this motion, and seeks to amend the complaint to add claims that are time-barred against the new defendants as a matter of law. (Opposition at pp. 7–13.) Defendant contends that all discovery materials from itself of the entities at issue was served in 2021, including discovery specifically responsive to Plaintiff’s inquiries about these entities, and thus Plaintiff had access to all matters forming the basis for the present motion since that time. (Sheldon Decl. ¶¶ 3–4.)
Plaintiff’s motion lacks justification and has been unreasonably delayed. The asserted reason for the present motion is the changing of Plaintiff’s counsel in mid-2024, not the discovery or uncovering of new information, all of which Plaintiff possessed when Defendant served its discovery in 2021. And although Plaintiff argues that the Entities are necessary parties to this action because they possess information concerning their assets and valuation, it is not necessary to add these parties as defendants in order to obtain that information, as Plaintiff implicitly acknowledged when he served the Entities with subpoenas. (Sheldon Decl. ¶ 3.)
The claims are also legally deficient and time-barred. “[L]eave to amend should not be granted where ... amendment would be futile.” (Sandler v. Sanchez (2012) 206 Cal.App.4th 1431, 1437, italics in original.) “[T]he failure of a proposed amendment to state facts sufficient to constitute a cause of action or defense may support an order denying a motion to amend.” (California Casualty Gen. Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274, 280, disapproved on other grounds by Kransco v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390.)
Defendant is correct that Plaintiff’s proposed claims against the Entities are time-barred. The cause of action for aiding and abetting fraud has a three-year statute of limitations, while an accounting claim is time-barred after four years. (Code Civ. Proc. §§ 337, subd. (d); 343; See In re McCabe's Estate (1947) 80 Cal.App.2d 823, 826 [applying statute to accounting claim].) Here, the alleged fraud took place in 2013, and Plaintiff alleges his discovery of the fraud in 2017 through the reading of news articles about Defendant’s wealth and holdings. (Proposed SAC ¶¶ 37–44.) Plaintiff’s claims against the Entities were time-barred by June 2021.*
Plaintiff in opposition argues that this court should not address any statute of limitations argument but should confine its analysis to addressing whether leave to amend is proper, as ““[t]he preferable practice [is] to permit the amendment and allow the parties to test its legal sufficiency by demurrer, motion for judgment on the pleadings or other appropriate proceedings.” (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048; Reply at pp. 5–6.) Yet the authority that Plaintiff cites rests upon the testing of novel legal theories, not straightforward application of statute-of-limitations principles. Plaintiff in reply does not offer any argument for the viability of the claims or any indication that arguments exist that would benefit from a hearing on a dispositive motion.
The motion is therefore DENIED.
*Plaintiff does not add the Entities as Doe defendants under Code of Civil Procedure § 474 and does not contend that their addition by such a procedure would be viable. Doing so would require a showing that Plaintiff was ignorant of the facts giving rise to his claims against them. (See Fuller v. Tucker (2000) 84 Cal.App.4th 1163, 1170.)