Judge: Malcolm Mackey, Case: 20STCV22167, Date: 2022-09-28 Tentative Ruling

Case Number: 20STCV22167    Hearing Date: September 28, 2022    Dept: 55

GMP ASSOCIATES, INC. v. SHAWN RABIZADEH                            20STCV22167

Hearing Date:  9/28/22,  Dept. 55

#6:   MOTION FOR LEAVE TO AMEND CROSS-COMPLAINT.

Notice:  Okay

Opposition

MP:  Defendants and Cross-Complainants RACHEL RABIZADEH and SHAWN RABIZADEH.

RP:  Plaintiff

Summary

On 6/12/20, Plaintiff GMP ASSOCIATES, INC. filed a Complaint

On 6/15/20, Plaintiff filed a First Amended Complaint, alleging that the owner defendants agreed to pay for remodeling of their owned home, but failed to pay for a significant portion of the construction work.

The Plaintiff’s causes of action are:

1.      BREACH OF CONTRACT

2.      REASONABLE VALUE OF WORK

3.      FORECLOSURE OF MECHANICS LIEN.

On 8/3/20, Cross-Complaint was filed by defendants RACHEL RABIZADEH and SHAWN RABIZADEH against Plaintiff, alleging Plaintiff did remodeling having numerous construction defects.

On 8/24/22, defendants filed a motion seeking to amend defendants’ Cross-Complaint, to include alter ego allegations and a claim for Violations Penal Code Section 496(b).

On 4/27/21, a Cross-Complaint was filed by GMP ASSOCIATES, INC. and GABRIEL MARTIN PEREZ, against MOES 1 through 50, regarding getting indemnification pursuant to subcontractors’ agreements.

MP Positions

Moving parties request an order allowing leave to amend the Cross-Complaint, on grounds including the following:

·         The Rabizadehs became aware that GMP removed slabs of granite from their home during construction. They communicated this to GMP, and had believed that GMP would return the items.

·         Granting the motion will not prejudice GMP.

·         Moving party cited distinguishable cases involving longer delay and an imminent trial.

RP Positions

Opposing party advocates denying,  for reasons including the following:

·         The motion lacks any explanation for 17 months’ delay in seeking to amend to include alter ego allegations and a claim for Violations Penal Code Section 496(b).

·         Moving parties knew or reasonably should have known for over two years the nature and scope of the pertinent facts, the parties involved, and the legal theories upon which liability could be based arising from those facts.

Tentative Ruling

The motion is granted.

The proposed First Amended Cross-Complaint may be served and filed, as a separate document, within 10 days.

Excuse for the delay includes attempts to informally obtain the return of granite slabs  (reply, Sean Dowsing decl., ¶ 6).  Cf.  New Linen Supply v. Eastern Environmental Controls, Inc. (1979) 96 Cal. App. 3d 810, 815 (“It was certainly reasonable for all parties to postpone formal dispute resolution mechanisms while they were attempting to amicably and informally settle their problems.”).  Generally, courts have allowed case resolution efforts as a satisfactory excuse for delay in prosecution or filing papers, if negotiations occurred during the relevant time span, and there were mutual efforts inducing a party reasonably to believe they were working towards a probable settlement.  E.g., San Bernardino City Unif. Sch. Dist. v. Sup. Ct. (1987) 190 Cal. App. 3d 233, 239.  Accord  Arnke v. Lazzari Fuel Co., (1962) 202 Cal. App. 2d 278, 281. 

Further, moving parties properly seek to add legal theories-- alter ego and a statutory violation--to the same general set of facts regarding defective remodeling by a contractor.

“‘“[I]t is irrelevant that new legal theories are introduced as long as the proposed amendments 'relate to the same general set of facts….”’”   Atkinson v. Elk Corp. (2003) 109 Cal. App. 4th 739, 761.

“A claim based upon an alter ego theory is not itself a claim for substantive relief.”  Leek v. Cooper  (2011) 194 Cal.App.4th 399, 418.

“Penal Code section 484, subdivision (a) describes the acts constituting theft to include theft by false pretense, which is the consensual but fraudulent acquisition of property from its owner.”   Bell v. Feibush (2013) 212 Cal.App.4th 1041, 1049  (also upholding civil liability under Penal Code Section 496).

As a policy consideration, “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. Sup. Ct. (1989) 213 Cal. App. 3d 1045, 1047.