Judge: Lynne M. Hobbs, Case: 21STCV19944, Date: 2024-04-09 Tentative Ruling

Case Number: 21STCV19944    Hearing Date: April 9, 2024    Dept: 30

EDUARDO TIZOC vs GEORGE ANTHONY MORAN, et al.

TENTATIVE

Plaintiffs’ motion for leave to amend is GRANTED. Plaintiffs are ordered to file the proposed second amended complaint attached to the motion within 10 days of the date of this hearing. 

The Motion to Continue the Trial Date is GRANTED. 

Moving party is ordered to give notice.

Legal Standard

California Code of Civil Procedure section¿473, subdivision¿(a)(1) provides, in relevant part: “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.”¿

“This discretion should be exercised liberally in favor of amendments, for judicial policy favors resolution of all disputed matters in the same lawsuit.”¿¿(Kittredge Sports Co. v. Superior Court¿(1989) 213 Cal.App.3d 1045, 1047.)¿ Ordinarily, the court will not consider the validity of the proposed amended pleading in ruling on a motion for leave since grounds for a demurrer or motion to strike are premature.¿ The court, however, does have discretion to deny leave to amend where a proposed amendment fails to state a valid cause of action as a matter of law and the defect cannot be cured by further amendment.¿¿(See¿California Casualty General Ins. Co. v. Superior Court¿(1985) 173 Cal.App.3d 274, 281¿(overruled on other grounds by¿Kransco¿v. American Empire Surplus Lines Ins. Co.¿(2000) 23 Cal.4th 390).)¿

“ ‘[I]t is an abuse of discretion to deny leave to amend where the opposing party was not misled or prejudiced by the amendment.’ (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 759-761.) Prejudice exists where the amendment would require delaying the trial, resulting in loss of critical evidence, or added costs of preparation such as an increased burden of discovery. (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 486-488.)

Under¿California Rules of Court¿Rule 3.1324(a), a motion to amend a pleading shall (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.¿

Under¿California Rule of Court¿Rule 3.1324(b), a separate declaration must accompany the motion and must specify (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.¿

Discussion

Plaintiffs seek leave to file a second amended complaint to add allegations for punitive damages against Defendant VCI, arguing that through the course of discovery, facts giving rise to Plaintiffs’ allegations in support of Plaintiffs’ claims for punitive and exemplary damages have been discovered. Specifically, Plaintiffs contend that it was revealed on March 5, 2024, in PMQ depositions, that Defendant VCI’s officers, directors, executives, and managing agents, possessed knowledge that Moran was a danger to the motoring public based on prior moving violations, driving while intoxicated, hit-and-run, driving on a suspended license, operating a vehicle while on a cell phone and a prior accident while in the course and scope of his employment with VCI. Plaintiffs contend that Defendants ignored the evidence. Plaintiffs contend that VCI ratified Moran’s conduct and made a conscious and reckless decision to allow Moran unfettered and unrestricted use of the company vehicle.

Compliance with California Rules of Court, rule 3.1324

Plaintiffs have complied with CRC Rule 3.1324 by including a copy of the proposed pleading and indicating what allegations are to be added. (Summers Decl., ¶ 17; Proposed Second Amended Complaint.) Plaintiffs also explain that they discovered additional facts regarding Defendant’s knowledge of Moran’s driving record during discovery. This is sufficient to explain why the amendment is necessary and proper, when the facts giving rise to the amended allegations were discovered, and why it was not made earlier.

Prejudice

Plaintiffs argue Defendant will not be prejudiced, as they knew of these facts. Further, trial is in April 2024, and the five-year statute does not expire until May 2026, such that a reasonable trial continuance to allow VCI to additional discovery and proceed with any dispositive motions can be heard.

Defendants argue that Plaintiffs knew of Moran’s driving history when they deposed Moran in October of 2022, and he testified about these facts. Defendants argue unwarranted delay without more, can be a valid reason for denying this motion. Defendants argue that allowing leave to amend would radically change the posture of the case because Defendants have admitted liability and the only issue that remains is the extent of Plaintiffs’ damages. Thus, they would need to defend the punitive damages claim on the merits by initiating a new round of discovery to obtain evidence to refute the claim. The parties have been involved in the investigation and discovery of this case for nearly three years. Defendants have prepared their defenses and evaluated their risks and exposure.

Although it is true “a court may deny a good amendment in proper form where there is unwarranted delay in presenting it,” it remains the case that “where there is no prejudice to the adverse party, it may be an abuse of discretion to deny leave to amend.” (Fair v. Bakhtiari (2011) 195 Cal.App.4th 1135, 1147; see also Kittredge Sports co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048 (“[Defendant] contends [Plaintiff] unreasonably delayed moving to amend… [e]ven if this were so, it is an abuse of discretion to deny leave to amend where the opposing party was not misled or prejudiced by the amendment.”)); Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761 (“[I]t is an abuse of discretion to deny leave to amend where the opposing party was not misled or prejudiced by the amendment.”); Thompson Pacific Construction, Inc. v. City of Sunnyvale (2007) 155 Cal.App.4th 525, 545 (“In spite of this policy of liberality, a court may deny a good amendment in proper form where there is unwarranted delay in presenting it. On the other hand, where there is no prejudice to the adverse party, it may be an abuse of discretion to deny leave to amend.”) (citations omitted).

Prejudice exists, for example, where the plaintiff unduly delayed in seeking leave to amend, and the amendment will require a trial continuance and a reopening of discovery on the eve of trial. (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 488 (“Where the trial date is set, the jury is about to be impaneled, counsel, the parties, the trial court, and the witnesses have blocked the time, and the only way to avoid prejudice to the opposing party is to continue the trial date to allow further discovery, refusal of leave to amend cannot be an abuse of discretion”).)

Here, Moran testified about his driving history in October 2022. In June of 2023, Plaintiffs served discovery in order to ascertain Defendant’s knowledge of Moran’s driving history. Plaintiffs contend that this alleged knowledge was not confirmed until the PMQ deposition in March of 2024. As such, the Court finds that Plaintiffs have not unduly delayed, as they were seeking this discovery since 2023. Had Plaintiffs been provided with this evidence last year, the parties could have been ready for trial. Moreover, it is irrelevant that new legal theories are introduced as long as the proposed amendments “relate to the same general set of facts.” (Hirsa, supra, 118 Cal.App.3d at p. 490.) The additional claim for punitive damages relies on the same facts.

Further, Defendants argue that at the time this motion is heard, the trial date will be only three weeks away. They contend that their litigation analysis and strategy have already been decided, and thus, punitive damages claim at this late stage in the process is detrimental and prejudicial to Defendants as it will require a continuance of the trial date.

However, it appears that a trial continuance will be necessary in any event in light of the fact that Defendants provided 600 pages of discovery on March 5, 2024; discovery that Plaintiffs sought since last year. The Court notes the hearing date for the motion to continue trial is on the same day as the hearing for this motion.

Merits of the Proposed Pleading

In considering whether to grant leave to amend, “the preferable practice would be to permit the amendment and allow the parties to test its legal sufficiency by way of demurrer, motion for judgment on the pleadings or other appropriate remedy.” (Kittredge Sports Co. v. Superior Court (Marker, U.S.A.) (1989) 213 Cal.App.3d 1045, 1048; Edmon & Karnow, Cal. Prac. Guide: Civil Procedure Before Trial, Section 6:644 (Rutter Group 2019).) “[I]t is an abuse of discretion to deny leave to amend where the opposing party was not misled or prejudiced by the amendment.” (Kittredge, supra, 213 Cal.App.3d at 1048.)

Here, the court finds that Plaintiffs’ proposed allegations are sufficient to support Plaintiffs’ request for leave to amend. Should Plaintiffs’ amended complaint be legally insufficient, Defendant’s proper remedy would be through a motion to strike. Moreover, Defendant has not shown that it has been misled or prejudiced by the proposed amendment. Accordingly, the court grants Plaintiff’s request to amend the complaint.

Conclusion

Based on the foregoing, Plaintiffs’ motion for leave to amend is GRANTED. Plaintiffs are ordered to file the proposed second amended complaint within 10 days of this hearing.

Good cause appearing, the motion to continue the trial date is GRANTED.