Judge: Mark C. Kim, Case: 21LBCV00424, Date: 2023-02-02 Tentative Ruling
Case Number: 21LBCV00424 Hearing Date: February 2, 2023 Dept: S27
1. Complaint
Plaintiff, Say Eng filed this
action against Defendants, Patrick T. Chim, Maria I. Haban, Chantha A. Chim, Victor
M. Torres, Jr., Mekphachanh Chanthaphasouk, Only Glo, Inc., and all persons
claiming legal or equitable right, title, estate, lien, or interest in the
subject property. Plaintiff’s operative Third
Amended Complaint, filed on 8/08/22, includes causes of action for breach of
fiduciary duty and related claims. Plaintiff
added Wells Fargo as a named defendant to the action, as it is the bank with the
mortgage on the subject property.
Defendants are Plaintiff’s children,
Patrick Chim and Chantha Chim, and their respective spouses, Maria I. Haban and
Mekphachanh Chanthaphasouk. Plaintiff
alleges her eldest son, Patrick, convinced her to sign over title to him in
2007. She and her husband had divorced,
and Patrick convinced her it was in her best interest to sign the title over to
him. Because he was the eldest and the
only college-educated child, she did so, trusting his promises to take care of
her and the home.
Plaintiff alleges Patrick, unbeknownst
to her, encumbered the property in 2017 with a deed of trust in the amount of
$350,000. All monies went to Patrick and
his wife, and were used for their benefit.
Additionally, in 2020, Patrick obtained a $454,000 deed of trust against
the property. Defendant, Only Glo is the
mortgagor in connection with the 2020 DOT.
Plaintiff alleges Patrick and his sister, Chantha, are estranged from
the other children, some of whom live in the house with her. Plaintiff alleges the property has two rental
units, which generate income sufficient to pay all costs associated with the property.
Plaintiff went out of town in
August of 2021; while she was out of town, Patrick entered into an agreement to
list the property for sale with a real estate agent. Patrick and Chantha put a “for sale” sign on the
property while she was gone. Patrick
insists on moving forward with the sale, telling Plaintiff she should “live in
Section 8 housing like her friends.”
Plaintiff alleges Patrick Chantha, and Chantha’s husband entered into the
property on 8/05/21 and demanded that all occupants immediately vacate; they
then changed the locks to the home.
Plaintiff’s child, who was living in the home, was called by her
children, whom she found outside in the yard when she returned home. Plaintiff alleges Defendants accepted an offer
to sell the home, and then entered the home and removed all of her property,
including passport and other important documents, family photographs, jewelry,
etc.
2. Cross-Complaints
Wells Fargo filed a cross-complaint
on 2/28/22. The cross-complaint is
against Patrick Chim, and essentially alleges that Chim applied for a loan on
the subject property and indicated he was the sole owner, but Eng is now
claiming, in this lawsuit, to be the owner, such that Wells Fargo must expend
attorneys’ fees to defend the action.
Wells Fargo seeks indemnification from Chim for any fees and costs
expended, as well as any balance on the loan that ultimately must be refunded
to Eng.
Chim filed a cross-complaint
against Eng on 3/03/22. The cross-complaint
is a judicial council form complaint, and includes causes of action for
indemnification, apportionment of fault, and declaratory relief. The cross-complaint seeks indemnification,
including attorneys’ fees, from Eng in connection with any loss Chim ultimately
sustains per Wells Fargo’s cross-complaint.
3. Motion
for Leave to File Amended Cross-Complaint
a. Parties’
Positions
Chim seeks leave to file an FACC
against Eng, pursuant to which he would add claims for unjust enrichment/quasi-contract/restitution
and common counts, on the theory that Eng abandoned the subject property and
Chim has incurred all expenses related to the property since 2007, which total
not less than $250,000. Chim argues he
substituted a new attorney into the case and the new attorney realized these
claims needed to be asserted, and he acted in good faith at all times such that
granting the motion is mandatory.
Eng opposes the motion. She argues Chim delayed in seeking relief,
and the delay has prejudiced her. She notes
that trial is scheduled for 3/06/23, and must be continued if the Court is
inclined to grant the motion.
b. Applicable
Legal Standard
Chim argues the Court must grant the
motion if it finds he acted in good faith.
Eng argues the motion must be denied if Chim delayed in filing the motion
and the delay caused her prejudice. Thus,
the threshold issue before the Court is the standard to be applied when seeking
leave to amend the cross-complaint.
Chim relies on CCP §426.50 to
support his position that the motion must be granted so long as he acted in
good faith. §426.50 provides, “A party
who fails to plead a cause of action subject to the requirements of this
article, whether through oversight, inadvertence, mistake, neglect, or other
cause, may apply to the court for leave to amend his pleading, or to file a
cross-complaint, to assert such cause at any time during the course of the
action. The court, after notice to the adverse party, shall grant, upon such
terms as may be just to the parties, leave to amend the pleading, or to file
the cross-complaint, to assert such cause if the party who failed to plead the
cause acted in good faith. This subdivision shall be liberally construed to
avoid forfeiture of causes of action.”
Notably, “this article” is the
article entitled “compulsory cross-complaints.”
Chim’s proposed amended cross-complaint clearly states compulsory
claims, as they arise out of the same facts and circumstances as Eng’s
complaint, and they are stated against Eng.
Thus, the standard to be applied is “good faith,” not “delay and
prejudice.”
c. Analysis
Eng argues at length that Chim
delayed in bringing the motion and the delay prejudiced her. While this is the standard, set forth in CCP
§473(a), for amendment of a complaint, it is not the standard, set forth in
§426.50, for amendment of a compulsory cross-complaint. Eng fails to set forth any facts in her opposition
tending to show a lack of good faith, and she therefore fails to show the
motion should be denied.
Notably, Eng articulates a potential
technical ground for denial of the motion under CRC 3.1324. Denial on this ground, however, would be
without prejudice, and would simply result in further delay of the proceedings so
Chim can cure the defect and obtain a new hearing date. The Court, therefore, finds substantial compliance
with the Rules of Court, and will not deny the motion on this ground.
d. Continuance
of Trial
Eng argues that, in the event the
Court is inclined to grant the motion, the trial date must be continued. The Court agrees. Trial is scheduled for 3/06/23, approximately
one month after the hearing on this motion.
The amended cross-complaint will set forth, for the first time,
substantive claims against Eng, and she must be permitted time to prepare her
defense of those allegations.
The Court is inclined to continue
the trial date for six months, to Monday, 8/07/23 at 8:30 a.m. in Department
S27. The FSC is likewise continued from
3/03/23 to Thursday, 8/03/23 at 8:30 a.m. in Department S27.
Chim is ordered to give notice.
Parties who intend to submit
on this tentative must send an email to the court at gdcdepts27@lacourt.org indicating intention to submit on the tentative as
directed by the instructions provided on the court website at www.lacourt.org. If the department
does not receive an email indicating the parties are submitting on the tentative
and there are no appearances at the hearing, the motion may be placed off calendar. If a party submits on the tentative, the
party’s email must include the case number and must identify the party
submitting on the tentative. If any party does not submit on the tentative, the
party should make arrangements to appear remotely at the hearing on this
matter.