Judge: Mark E. Windham, Case: 24STLC00727, Date: 2024-10-17 Tentative Ruling

Case Number: 24STLC00727    Hearing Date: October 17, 2024    Dept: 26

Heuer v. Bloomfield Villas HOA, et al.

MOTION FOR LEAVE TO FILE CROSS-COMPLAINT

(CCP §§ 426.50, 428.50)

TENTATIVE RULING:

Defendant Bloomfield Villas Homeowners Association’s Motion for Leave to File Cross-Complaint is GRANTED. THE PROPOSED CROSS-COMPLAINT IS TO BE FILED AND SERVED WITHIN 20 DAYS OF THIS ORDER.

ANALYSIS:

On January 31, 2024, Plaintiff Janet Heuer (“Plaintiff”) filed the instant action for breach of contract and declaratory relief against Defendant Bloomfield Villas Homeowners Association (“Defendant”). Defendant filed an answer to the Complaint on March 22, 2024.

Defendant the instant Motion for Leave to File Cross-Complaint on August 12, 2024. Plaintiff filed an opposition on October 4, 2024 and Defendant replied on October 9, 2024.

Discussion

The Motion is brought by Defendant for leave to file a cross-complaint against Defendant pursuant to Code of Civil Procedure sections 426.50 and 428.50. Since the cross-complaint was not filed before or at the same time as the answer to the complaint was filed, leave of Court is required, which may be granted in the interests of justice at any time during the action. (Code Civ. Proc., § 428.50, subds. (a), (c).) Code of Civil Procedure section 426.50, which applies to compulsory cross-claims, states in relevant part:

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.

(Code Civ. Proc., § 426.50.) Defendant also relies on case law that pertains to the filing of compulsory cross-complaints. “For purposes of determining whether a cause of action must be alleged in a cross-complaint, a ‘related cause of action’ is ‘a cause of action which arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause of action which the plaintiff alleges in his complaint.’ (§ 426.10, subd. (c).)” (K.R.L. Partnership v. Superior Court (2004) 120 Cal.App.4th 490, 498.) The Complaint is based on Plaintiff’s contention that Defendant is liable for the cost of repairs Plaintiff incurred following water intrusion into her property. (Compl., ¶¶5-13.) The proposed cross-complaint alleges that in entering into contracts for the repair of Plaintiff’s property following the water intrusion without Defendant’s permission, Plaintiff violated the governing documents and her fiduciary duties. (Motion, Moreno Decl., Exh. 1.) The cross-complaint, therefore, is compulsory and the Court can only deny the Motion upon a showing of bad faith by Defendant.

Plaintiff argues that the proposed cross-complaint is sought against her in bad faith because it is frivolous as board members are immune from liability for actions in the scope of their authority as board members. This is not automatic immunity, however. As the opposition points out, under Corporations Code section 7231, “A director of a nonprofit mutual benefit corporation is not liable for any alleged failure to discharge his or her duties as an officer or director and while acting in that capacity when he or she performs his or her duties in good faith, in a manner that he or she believes to be in the best interests of the corporation and its shareholders, and with the care of a reasonably prudent person in similar circumstances.” (Corps. Code, § 7321, subds. (a), (c).) The proposed cross-complaint does not bring a claim in violation of this standard. Plaintiff’s argument against the claim in the proposed cross-complaint is that its allegations are false. (Opp., p. 8:9.) There is no basis for the Court to make a finding of bad faith on these grounds. Doing so would turn the instant Motion into one for summary adjudication or judgment of the cross-claims. Accordingly, as there is no showing of bad faith, there are no grounds on which to deny Defendant leave to file the proposed cross-complaint.

Conclusion

Defendant Bloomfield Villas Homeowners Association’s Motion for Leave to File Cross-Complaint is GRANTED. THE PROPOSED CROSS-COMPLAINT IS TO BE FILED AND SERVED WITHIN 20 DAYS OF THIS ORDER.

Moving party to give notice.