Judge: Margaret L. Oldendorf, Case: 22AHCV00484, Date: 2023-08-23 Tentative Ruling
Case Number: 22AHCV00484 Hearing Date: April 16, 2024 Dept: P
[TENTATIVE]
ORDER GRANTING ADMIRAL INSURANCE CO.’S MOTION FOR LEAVE TO INTERVENE
(See below for tentative order re Floor Technology Group's Motion for Leave to Amend.)
I. INTRODUCTION
This complex, hydra-headed litigation
appears poised to sprout another head. Given
the multitude of parties, complaints and cross-complaints, the history of these
cases is too extensive to recite here. The
condensed version most applicable to the current motion to intervene begins
with Pasadena Oaks Life Properties and Signature Health Services, LLC hiring
Jokake Construction Services, Inc. to construct a two-story psychiatric
hospital known as Las Encinas. Jokake hired numerous subcontractors, including
PHL and Sierra Fireproofing. Problems and delays arose, which Jokake, Pasadena and
Signature attempted to work through. Following a June 2019 mediation, Pasadena
and Jokake executed an amendment to the contract. The disputes continued. In
March 2022, Pasadena terminated the Contract.
On July 21, 2022, Jokake filed 22AHCV00484
against 14 different parties, including Pasadena Oaks, Signature Health, PHL
and Sierra Fireproofing. In consolidated
case 22AHCV00352, PHL filed suit against Jokake and 2 other parties. In case ending 484, Sierra Fireproofing filed
a cross-complaint against Jokake and multiple additional parties. On May 1, 2023, Jokake filed a
cross-complaint against 14 parties, including PHL and Sierra Fireproofing. PHL is also a cross-defendant in a
cross-complaint filed by Huntington Glazing.
Admiral issued two commercial general
liability policies pertinent to the current motion, one to PHL and one to Sierra
Fireproofing. Jokake qualifies as an additional insured under those policies.
Admiral is currently defending Jokake in the pending arbitration matter
involving Pasadena and Signature and has spent over $100,000 so far in that
effort. Admiral anticipates that it will
ultimately spend over $250,000 defending Jokake. Admiral argues that “Admiral has an interest
in the transaction at issue in the present lawsuit through the payment of past
and future litigation expenses. As an insurer with partial indemnity and
subrogation rights, Admiral has a direct pecuniary interest in the present
action against the indemnitor/cross-defendants. In the absence of intervention,
disposition of the present action may impair or impede Admiral’s ability to
protect its pecuniary interest. Furthermore, Admiral’s pecuniary interest is not
adequately represented in the present action.”
Before the Court is Admiral’s motion for leave to
intervene. Plaintiff Jokake filed an opposition on April 3, 2024. Defendant ENC
Lath & Plaster filed a joinder to Jokake’s opposition on April 3, 2024.
Admiral filed a reply on April 9, 2024.
The motion is granted.
II. REQUEST FOR JUDICIAL NOTICE
Admiral requests judicial notice of the April 21,
2023 Minute Order denying the Motion to Compel Arbitration in this case. Though it is not necessary to take judicial notice of
papers already in the court file, the request is granted. (See Evid. Code, § 452, subd. (d).) (Evid.
Code § 453; Scott v. JP Morgan Chase Bank, N.A. (2013) 214 Cal.App.4th
743, 754-755.)
The Court takes judicial notice of Exh. 2.
III. LEGAL
STANDARD
Code
Civ. Proc. Section 387 sets forth the rules on intervention. An intervention
takes place when a non-party becomes a party by: “(1) Joining a plaintiff
in claiming what is sought by the complaint. (2) Uniting with a defendant
in resisting the claims of a plaintiff. (3) Demanding anything adverse to
both a plaintiff and a defendant.” (CCP § 387(b).) The Court shall grant a
nonparty leave to intervene if either of the following conditions is met:
“(A) A provision of law confers an unconditional right to intervene [or] (B) The
person seeking intervention claims an interest relating to the property or
transaction that is the subject of the action and that person is so situated
that the disposition of the action may impair or impede that person’s ability
to protect that interest, unless that person’s interest is adequately
represented by one or more of the existing parties.” (CCP § 387(d)(1)
[intervention by right].)
A
motion for leave to intervene shall include a copy of the proposed pleading in
intervention and set forth the grounds for intervention. (CCP § 387(c).)
Intervention
by right is invoked when the proposed intervenor’s interest in the litigation
““must be of such a direct and immediate character that [he] will either gain
or lose by the direct legal operation and effect of the judgment.” (Fireman’s
Fund Ins. Co. v. Garlic (1976) 56 Cal.App.3d 299, 303, internal citations
omitted.) Preservation of an insurer’s subrogation rights has been acknowledged
as a circumstance meriting intervention by right. (Hodge
v. Kirkpatrick Development, Inc. (2005) 130 Cal.App.4th 540, 548,
internal citations omitted.)
IV. DISCUSSION
Admiral currently represents Jokake as an additional
insured on its policies to PHL and Sierra Fireproofing, Jokake’s
sub-contractors. Jokake is the Plaintiff in this action. Four other insurance companies
are also representing Jokake in the arbitration proceeding. As one of the insurance companies representing
Jokake, Admiral has an interest in this action. (CCP § 387(d)(1).)
Admiral
has paid over $100,000 in fees and costs to defend Jokake in the arbitration
action currently pending. (Derfler Decl. ¶ 6.) As there are additional
sub-contractors who allegedly are contractually obligated to indemnify and
defend Jokake from claims against Jokake arising out of the various
sub-contractor’s work on the project, Admiral has an interest in equitable
indemnity against these other sub-contractors. (See Hodge v. Kirkpatrick
Development, Inc. (2005) 130 Cal.App.4th 540, 550, see Motion p. 9.)
Admiral
attaches a copy of its proposed Cross-Complaint to the declaration of its
attorney. (Derfler Decl. Exh. 1.)
In its
opposition, Jokake urges that Admiral Insurance Co.’s interests are adequately
represented by Jokake’s Cross-Complaint against the subcontractors. On May 1,
2023, Jokake filed a cross-complaint against the various subcontractors in this
consolidated matter, alleging causes of action for express indemnity, equitable
indemnity and declaratory relief: duty to defend, duty to indemnify. However,
the indemnity causes of action in Jokake’s Cross-Complaint relate to the
liability of Jokake as to Pasadena, not the cost of defending Jokake. The Court
finds Admiral’s reliance on Hodge persuasive. Although Jokake attempts to
distinguish Hodge, the court agrees with Admiral’s argument that it is a distinction without a difference.
The
Court finds that the motion is timely. (See Truck Ins. Exchange v. Superior
Court (1997) 60 Cal.App.4th 342, 351 [application to intervene filed after
four years was timely as no prejudice was shown]; Allen v. California Water
& Tel. Co. (1947) 31 Cal.2d 104, 108, internal citations omitted.)
The
Court concludes that this is intervention by right (mandatory intervention).
Admiral has an interest in this litigation because it is defending Jokake in the
pending arbitration with Pasadena Oaks.
Admiral seeks to file a cross-complaint for indemnity against the other
sub-contractors’ insurers for the cost of doing so. This interest is not
adequately represented by any of the existing parties. (See Hodge v.
Kirkpatrick Development, Inc. (2005) 130 Cal.App.4th 540, 548-550; Reply p.
5: 14-28.)
The Court
grants Admiral’s motion to intervene and file a cross-complaint.
V. ORDER
Non-party
Admiral Insurance Co.’s motion for leave to intervene is granted.
Admiral Insurance is ordered
to file and serve the proposed Cross-Complaint on all parties in this
consolidated action within 30 days’ notice of this order.
Dated: April 15, 2024 JARED D. MOSES
JUDGE OF THE SUPERIOR COURT
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[TENTATIVE]
ORDER GRANTING CARPET SERVICE BERT THE DUTCHMAN dba FLOOR TECHNOLOGY GROUP’S
MOTION FOR LEAVE TO AMEND
I. INTRODUCTION
These consolidated cases involve a
construction project in the city of Pasadena. Pasadena Oaks Life Properties and
Signature Health Services, LLC hired Jokake Construction Services, Inc. to
construct a two-story psychiatric hospital called Las Encinas.
Jokake
hired numerous subcontractors, including the colorfully named Carpet Service
Bert The Dutchman dba Floor Technology Group. Problems and delays arose, which
the parties attempted to work through. Following a June 2019 mediation, Pasadena
and Jokake executed an amendment to the contract. The disputes continued. In
March 2022, Pasadena terminated the Contract. These related and consolidated
cases followed.
On June 8, 2022, Floor Technology
Group filed suit against Jokake for breach of contract and related causes of
action. On July 21, 2022, Jokake filed suit
against 14 different parties, including Floor Technology Group. On December 1, 2022, Floor Technology Group requested
leave to file its First Amended Complaint, which added Traveler’s Insurance and
a cause of action for claim against public works payment bond.
Before the Court is Floor Technology Group’s motion for
leave to amend and file a second amended complaint. Floor Technology seeks to add
a 7th cause of action for claim against mechanic’s lien bond as to Jokake and American Contractors Indemnity Company. The motion is unopposed.
The motion is granted.
II. LEGAL
STANDARD
Civ.
Proc. Code §473, subd. (a), allows courts to permit amendment of pleadings in
furtherance of justice and on any terms as may be proper.
Judicial policy strongly favors amendment. The general rule
is liberal construction of pleadings and liberal allowance of amendments. (Nestle v. Santa Monica (1972) 6 Cal.3d
920, 939.)
“Motions for leave to amend are directed to the sound
discretion of the judge: ‘The court may, in furtherance of justice and on any
terms as may be proper, allow a party to amend any pleading....’ (CCP § 473,
subd. (a)(1).) However, the court’s discretion will usually be exercised
liberally to permit amendment of the pleadings. (Citations.) The policy
favoring amendment is so strong that it is a rare case in which denial of leave
to amend can be justified. (Citation.) ‘Leave to amend should be denied only where
the facts are not in dispute, and the nature of the plaintiff's claim is clear,
but under substantive law, no liability exists and no amendment would change
the result.’ (Citation.)” (Howard v. County of San Diego (2010) 184
Cal.App.4th 1422, 1428.)
Courts will ordinarily not consider the validity of a
proposed pleading; the preferred 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.) But a court does not
abuse its discretion in denying leave to amend where the proposed pleading
fails to state a cause of action and further amendment would be “futile.” (Foxborough
v. Van Atta (1994) 26 Cal.App.4th 217, 230-231.)
Courts have discretion to deny leave to amend where delay
in seeking amendment has prejudiced the other party. (Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 490.)
Cal. Rules of Court, Rule 3.1324, subd. (b), requires that
a motion for leave to amend be accompanied by a declaration stating why the
amendment is necessary and proper, when the facts giving rise to the amended
declaration were discovered, and the reason why the request for amendment was
not made earlier.
III. DISCUSSION
A. The Procedural Requirements Are Met
Keith
Salek, counsel for Plaintiff Floor Technology, declares that after filing the
first amended complaint and receipt of Jokake’s answer, “I was notified of the
existence of the existence of a Release of Mechanic’s Lien Bond for the subject
Project on February 12, 2024.” (Salek Decl. ¶ 10.) Salek further declares that “FLOORTECH
filed the instant Motion on March 6, 2024, within one (1) month after being
advised of the existence of ACIC’s Release of Mechanic’s Lien Bond issued for
the subject Project.” (Salek Decl. ¶ 12.)[1] Salek
declares that leave to amend was not sought earlier as his office needed a few
weeks to draft the motion. (Salek Decl. ¶ 14.) Salek declares that “To force
FLOORTECH to litigate these matters in a separately filed action against ACIC
only would not further justice, but would only serve to waste judicial
resources, run up costs and fees for all involved, and would prejudice
FLOORTECH.” (Salek Decl. ¶ 13.) This declaration satisfies the requirements of
Rule 3.1324(b) in terms of explaining when the facts giving rise to the amended
allegations were discovered and why leave to amend was not sought
sooner.
B. The Motion is Timely
Timeliness
is only a basis for denial where leave to amend would be prejudicial. Thus,
while there is no particular time limit on motions for leave to amend, leave to
amend may be denied where allowing amendment would be prejudicial to the
opposing party.
As
this motion is unopposed and no party asserts that allowing amendment would be
prejudicial, the motion for leave to amend is not untimely.
IV. ORDER
Floor
Technology’s motion for leave to amend is granted.
Floor
Technology is ordered to file and serve separately the proposed 2nd Amended
Complaint on all parties within 30 days’ notice of this order.
Dated: April 15, 2024 JARED D. MOSES
JUDGE OF THE SUPERIOR COURT