Judge Mark A. Young, Case 20SMCV00819 2023-01-04 Tentative Ruling

If a party wishes to amend a pleading after an answer has been filed, or after a demurrer has been filed and after the hearing on the demurrer, or if he or she has already amended the pleading as a matter of course, the party must obtain permission from the court before amendment. (CCP §§ 473(a)(1), 576.) Motions for leave to amend the pleadings are directed to the sound discretion of the court. “The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading . . ..” (CCP § 473(a)(1); see CCP § 576.) Policy favors liberally granting leave to amend so that all disputed matters between the parties may be resolved. (See Howard v. County of San Diego (2010) 184 Cal.App.4th 1422, 1428.) Absent prejudice to the adverse party, the court may permit amendments to the complaint “at any stage of the proceedings, up to and including trial.” (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761 [internal quotes omitted].) Where leave is sought to add entirely new claims, the court may grant leave to amend if the new claims are based on the same general set of facts, and the amendment will not prejudice the opposing party. (Austin v. Massachusetts Bonding & Ins. Co. (1961) 56 Cal.2d 596, 600-602; Glaser v. Meyers (1982) 137 Cal.App.3d 770, 777 [holding trial court did not abuse its discretion in permitting amendment of complaint, which originally alleged constructive eviction, to allege retaliatory eviction where the new claim was based on the same general set of facts].)

Although denial is rarely justified, a judge has discretion to deny leave to amend if the party seeking the amendment has been dilatory, and the delay has prejudiced the opposing party. (Morgan v. Superior Court (1959) 172 Cal.App.2d 527, 530; Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 490). An opposing party is prejudiced where the amendment would necessitate a trial delay along with a loss of critical evidence, added preparation expense, increased burden of discovery, etc. (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 486-488 [leave properly denied where plaintiff sought leave on the eve of trial, nearly two years after the complaint was originally filed and gave no explanation for the delay which prejudiced defendant who did not discover or depose many of the witnesses who would support the new allegations and had not marshaled evidence in opposition of the new allegations].)

Procedurally, a motion for leave to amend must state with particularity what allegations are to be amended. Namely, it must state what allegations in the previous pleading are proposed to be deleted and/or added, if any, and where, by page, paragraph, and line number. (CRC, Rule 3.1324(a)(2)-(3).) The motion must be accompanied by a declaration specifying: (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(b).) The motion must also be accompanied by the proposed amended pleading, numbered to differentiate it from the prior pleadings or amendments. (CRC, Rule 3.1324(a)(1).) It is within the court’s discretion to require compliance with Rule 3.1324 before granting leave to amend. (Hataishi v. First American Home Buyers Protection Corp.¿(2014) 223 Cal.App.4th 1454, 1469.)

Defendant Venice Business Partners, Inc. (“VBPI”) moves for an order granting it leave to file a First Amended Answer (“FAA”) to the operative complaint by Plaintiff Tom Yang. VBPI seeks the following:

(1) add to VBPI’s Twentieth Affirmative Defense for insufficient grounds for an award of prejudgment interest, at the Answer, page 5, the following language at the end of the second sentence: “To the extent that an award of prejudgment interest is available to Plaintiff on any of his causes of action, pursuant to Civil Code Section 1504, Defendant’s prior tenders of payment to Plaintiff have stopped the running of such interest, and any interest available and awarded to Plaintiff should be limited accordingly.”

(2) add the following Twenty-Sixth Affirmative Defense for Illegal Usury, at the Answer, page 6: “Defendant alleges that the fee and interest rate on the face of the alleged loan at issue in on or more of Plaintiff’s causes of action are illegal usury per se pursuant to California law, and are, therefore, unenforceable. (Cal. Const. Art. XV, Sec. 1; Civ. Code §§¿1912 to 1916.12; and Cal Uncod. Init. Measures & Stats Deerings 1919, 1919-1.)”

Defendant’s motion complies with the Rules’ requirements for leave to amend. (See CRC Rule 3.1324.)

In opposition, Plaintiff argues delay on the part of VBPI because VBPI was well aware of its usury claims yet inexcusably waited until December 1, 2022, to file this motion. The Court concludes, however, that any delay inferred from the procedural history of the pleadings and this alleged delay cannot be prejudicial. The usury issues were fully explored via VBPI’s Cross-Complaint, whether or not they were also asserted formally in the answer. Thus, Plaintiff had notice of the issue.

Plaintiff does not demonstrate that adding this affirmative defense would prejudice the case, or cause unnecessary delay of trial. Plaintiff argues that the usury issue was not discussed during discovery. However, Plaintiff identifies no discovery that would be necessary on this issue. Thus, the Court does not expect that this amendment to the answer would require any delays. Accordingly, Defendant’s motion is GRANTED.