Judge: Mark H. Epstein, Case: 22SMCV00352, Date: 2023-03-22 Tentative Ruling

Case Number: 22SMCV00352    Hearing Date: March 22, 2023    Dept: R

The motion for leave to file a cross-complaint is GRANTED. 

This is a wage and hour case in which plaintiff contends defendant violated various provisions of the Labor Code.  Defendant asserts that after being sued, it looked at the records and discovered that in fact it overpaid plaintiff and now seeks to file a cross-complaint to recover the alleged overpayment.

The court believes that this is in the nature of a compulsory cross-complaint.  As such, pursuant to Code of Civil Procedure section 426.50, leave must be granted absent bad faith to avoid the forfeiture.  The court cannot, on these papers, find bad faith, although the court does wonder why it took so long to bring the motion.  The court notes that there is a trial set for July 2023, and that might lead to denial of the motion were the complaint not a compulsory one.  But given that it is, the court is not inclined to deny the motion due to prejudice.  The court also notes that defendant stated that it disclosed this issue in discovery responses on July 5, 2022 and in its CMC statement of September 14, 2022, which mitigates the potential prejudice.  (Of course, that only enhances the question why defendant waited so long to bring the motion.)  To the extent that plaintiff wants or needs additional time to conduct discovery relating to the cross action, the court will almost certainly continue the trial to so allow.

Plaintiff suggests that the cross-action is not compulsory, but the court is not sure why that would be.  Further, at a minimum, the court would be inclined to allow defendant to amend its answer to allege an offset, which gets us to the much same place.

To avoid any prejudice, the court is prepared to issue a discovery order to give plaintiff priority on any discovery related to the cross action.  Further, as a condition to granting the motion, defendant must serve on plaintiff all of the pay records and back up materials (broadly construed) that relate to the claim of overpayment no later than March 31, 2023.