Judge: Mark A. Young, Case: 22SMCV00889, Date: 2023-10-10 Tentative Ruling

Case Number: 22SMCV00889    Hearing Date: October 10, 2023    Dept: M

CASE NAME:           Smith, et al., v. CM Construction Inc., et al.

CASE NO.:                22SMCV00889 (related to 21SMCV00849)

MOTION:                  Motion for Leave to File Cross-Complaint

HEARING DATE:   10/10/2023

Legal Standard

Generally, a party must file a cross-complaint against any of the parties who filed the complaint or cross-complaint against him or her before or at the same time as the answer to the complaint or cross-complaint. (CCP, § 428.50(a).)  The court may grant leave to file a cross-complaint if the failure to plead a cause of action was the result of oversight, inadvertence, mistake, neglect, or other cause. (CCP, § 426.50.) Where the proposed cross-complaint arises out of the same transaction as plaintiff’s claim, the court must grant leave to file the cross-complaint as long as defendant is acting in good faith. (Id.) Judicial policy favors resolution of all disputed matters between the parties in the same lawsuit and discretion will usually be exercised liberally to permit amendment of the pleadings. (Nestle v. Santa Monica (1972) 6 Cal.3d 920, 929.) 

A party may obtain leave of court to file a cross-complaint at any time during the course of a lawsuit, and leave may be granted in the interest of justice. (CCP, §§ 426.50, 428.50.) Courts have interpreted section 426.50 to require that a motion to file a cross-complaint be granted at any time during the course of the action unless bad faith of the moving party is demonstrated. (Silver Orgs. v. Frank (1990) 217 Cal.App.3d 94, 98-99 [“Factors such as oversight, inadvertence, neglect, mistake or other cause, are insufficient grounds to deny the motion unless accompanied by bad faith.”]; Sidney v. Superior Court (1988) 198 Cal.App.3d 710, 718 [a “strong showing of bad faith” is required].)

Analysis

Defendant CM Construction moves for leave to file a proposed Cross-Complaint. (See Quiling Decl., Ex. A.)  The Cross-Complaint arises out of the same transaction as Plaintiff’s complaint. This case involves construction of a new single-family home located at 23919 Malibu Rd, Malibu, CA.  Smith entered into a construction contract with non-party Focus Builders, Inc. to build a new home. Due to lack of progress with Focus, on November 7, 2018, Plaintiff entered into a construction contract with CMC, where CMC would complete the construction project in accordance with terms and specs of previous contract with Focus. Plaintiff claims to have discovered breaches of the construction contract and defects in CMC’s work.

Defendant CMC answered the complaint on July 27, 2023.  Thereafter, Haight Brown & Bonesteel LLP, substituted in as counsel for CMC. After reviewing the file and production, counsel identified additional parties which may be liable, including the listed cross-defendants. (Quiling Decl., ¶¶ 4-7.) New counsel determined that prior counsel failed to appropriately file a cross-complaint against the subcontractors. (Id., ¶ 4.) This evidence demonstrates CMC’s good faith in seeking to file a cross-complaint.

No prejudice is apparent to any parties to be named in the proposed Cross-Complaint. No trial date has been set in this matter and no depositions have been taken to date. (Quiling Decl., ¶¶ 11-12.) Conversely, CMC would be prejudiced if not granted leave to bring all responsible parties into this action.

Accordingly, the motion is GRANTED.  CMC to file the proposed Cross-Complaint by October 13, 2023.  The Court shall continue the CMC to January 9, 2024 at 8:30 a.m.