Judge Malcolm Mackey, Case Number: 22STCV38250, Date: 2023-08-23 Tentative Ruling

Judge: Malcolm Mackey, Case: 22STCV38250, Date: 2023-08-23 Tentative Ruling

Case Number: 22STCV38250 Hearing Date: August 23, 2023 Dept: 55

S1OF 1 PROPERTIES LLC v. PHOOD FARMACY 2 LLC, 22STCV38250

Hearing Date: 8/23/23, Dept. 55.

#6: MOTION TO AMEND COMPLAINT.

Notice: Okay

Opposition

MP: Plaintiff

RP: Defendant

Summary

On 12/7/22, Plaintiff filed a Complaint.

On 2/1/23, Plaintiff filed a First Amended Complaint, alleging that Plaintiff, as commercial lessor and lender, agreed to provide over $350,000 for Defendant tenant’s improvements to prepare 1000 E. 60th Street, Los Angeles, in preparation for occupancy, but Defendant abandoned the premises after about 7 months of possession and refuses to repay the loan or further rent.

The causes of action are:

1) BREACH OF LEASE;

2) FAILURE TO REPAY LOAN;

3) COMMON COUNTS: MONEY OWED; and

4) UNJUST ENRICHMENT.

On 5/22/23, Plaintiff filed a motion for leave to amend the operative complaint to add causes of action related to alter ego issues and false and defamatory statements made to Plaintiff’s investors.

MP Positions

Moving party requests an order allowing leave to amend the operative complaint to add causes of action related to alter ego issues and Defendant’s defamatory statements, on grounds including the following:

· Plaintiff recently discovered information leading to the good faith belief that Defendant and its principals provided false, defamatory and inflammatory information to Plaintiff’s investors in an effort to induce said investors to part ways with Plaintiff.

· Plaintiff seeks to amend its complaint to include causes of action related to the recently discovered alter ego issues and related to the recently uncovered false and defamatory statements made to Plaintiff’s investors.

· Plaintiff diligently filed its Motion for Leave to Amend on May 22, 2023. Plaintiff discovered Defendant’s incorporation date, on or about March 3, 2023, while reviewing Defendant’s discovery responses. Plaintiff received notice that its investors had been contacted with defamatory statements on May 15, 2023. (Mahurin Decl., ¶ 3.)

· There are no “extensive discovery procedures” necessary for Defendant to investigate Plaintiff’s causes of action, and the time remaining before the May 2024 trial date is adequate to perform any discovery and investigation necessary.

· A motion for leave to amend does not properly involve consideration of the merits of the allegations.

RP Positions

Opposing party advocates denying, for reasons including the following:

· The proposed amendments would be: (1) prejudicial to Phood Farmacy; (2) unwarranted delay in this case including trial delay; and (3) futile under these circumstances.

· The 4-month delay in filing the motion after filing the First Amended Complaint is inexcusable.

· Plaintiff seeks to introduce new factual allegations and legal theories that are unsupported by any credible evidence or applicable legal principles.

Tentative Ruling

The motion is granted.

Plaintiff may serve and file the proposed Second Amended Complaint, as a separate document, within 5 days.

Defendant’s demurrer and motion set for hearing 8/29/23 are ordered off calendar, as moot, in light of leave to file the superseding complaint. Berman v. Bromberg (1997) 56 Cal.App.4th 936, 945-46.

A court can deny leave to amend if there was long, inexcusable delay, and if there is cognizable prejudice, such as discovery needed, trial delay, critical evidence lost, or added preparation expense. Solit v. Tokai Bank (1999) 68 Cal. App. 4th 1435, 1448; Atkinson v. Elk Corp. (2003) 109 Cal. App. 4th 739, 761; Green v. Rancho Santa Margarita Mortgage Co. (1994) 28 Cal.App.4th 686, 692; Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 487. In considering whether there was unjustified delay as to a motion for leave to file an amended pleading, the court should consider whether the party, “was not diligent in offering the amendment after knowledge of the facts….” Solit v. Tokai Bank (1999) 68 Cal. App. 4th 1435, 1448.

“If discovery and investigation develop factual grounds justifying a timely amendment to a pleading, leave to amend must be liberally granted.” Mabie v. Hyatt (1998) 61 Cal.App.4th 581, 596 (if claims were pled before obtaining justifying support, via investigating and discovery, complainants could be exposed to liability for malicious prosecution).

Courts generally do not consider the validity of a motion’s proposed amendments to a pleading. Kittredge Sports Co. v. Sup. Ct. (1989) 213 Cal. App. 3d 1045, 1047; Atkinson v. Elk Corp. (2006) 109 Cal. App. 4th 739, 760 (“the better course of action would have been to allow … [plaintiff] to amend the complaint and then let the parties test its legal sufficiency in other appropriate proceedings.”).