Judge Mark H. Epstein, Case Number: 22SMCV01207, Date: 2024-02-26 Tentative Ruling

Judge: Mark H. Epstein, Case: 22SMCV01207, Date: 2024-02-26 Tentative Ruling

Case Number: 22SMCV01207 Hearing Date: March 21, 2024 Dept: I

The motion to strike is DENIED.

First, the court would like to discuss the relationship between the moving party and Orange Team. For a while, the court thought that this was essentially moot given the Orange Team motion in that Orange Team was “dba” Green Planet. But upon a more careful reading, there is both the dba Green Planet (which is not itself a jural entity but rather is Orange Team) and a corporate entity Green Planet. What is does plaintiff assert is the role of each? What does Green Planet (the entity) say?

Assuming, though, that this motion remains live, the court agrees (somewhat reluctantly) with Green Planet that the amended complaint had the effect of vacating the default, and thus the answer is proper. A party in default cannot answer; rather, what it can do is to move to vacate the default and, if the motion is granted, then answer. (Forbes v. Cameron Petroleums, Inc. (1978) 83 Cal.App.3d 257.) However, the amended complaint supersedes the original complaint. As such, a default of one is not a default on the other. The named defendants must be served again and they have a right to answer once served. (Ostling v. Loring (1994) 27 Cal.App.4th 1731.) But there is an exception to that rule. Where the amended complaint makes no substantive change with regard to the defaulted defendant, then the default remains. The test to determine whether an amendment is one of form or substance is sometimes a hard question. But it is substantive and material when it changes the damages sought or adds or changes a cause of action based on a different factual or legal theory. The focus is on whether the change gives rise to a different amount of damages or form of liability, or indicates a different defense or other ground for avoiding liability. (Paterra v. Hansen (2021) 64 Cal.App.5th 507.)

Green Planet contends that the amended complaint is substantive because it changed the nature of Green Planet’s purported liability. More specifically, Green Planet asserts that in the original complaint, it was sued directly for not remediating the mold problem (see Complaint, ¶¶23-24), but in the amended complaint it was sued for not issuing (or at least recommending) a change order to do so inasmuch as it appears that under the theory in the amended complaint Green Planet was not hired to remediate mold, only water damages (see FAC, ¶¶31-35). Plaintiffs, on the other hand, contend that the change is technical only as to Green Planet. The real thrust of the amendment, they assert, is the addition of punitive damages alleged against other defendants. Thus, while plaintiffs agree that the amended complaint made substantive changes as to some parties, they argue that there were no substantive changes as to Green Planet and therefore the default remains.

Green Planet also asserts that it was never served with the amended complaint, or at least not served properly. Plaintiffs challenge that. Green Planet notes that its prior counsel, Horn, withdrew from the case on November 11, 2022, and there is no proper service reflecting the amended complaint. Plaintiffs note that the amended complaint was served on Horn on November 4, 2022—a week before he withdrew. One problem, though, is that Horn’s participation is odd on this record. Horn never appeared for Green Planet—not ever. He may well have written to plaintiffs, but there is nothing in the court’s file that shows Horn filed any document or appeared at any hearing. Given that, the court is unsure whether service on Horn is good service (even if service was made before plaintiffs were told that Horn was no longer counsel). As a general rule, had Horn appeared, the court would view service on Horn as sufficient service (and in that way the court disagrees with Green Planet’s apparent argument that amended complaints must always be served like original complaints). On the other hand, if Green Planet had never appeared in the case, then the court is not sure that service on Horn is valid—at least unless there is some writing plaintiffs have that says to the contrary. In any case, the court believes that the motion turns on the question of substance, not service.

The substance question is a close one. Mold is mentioned throughout both the original and amended complaints, and it is mentioned with regard to Green Planet as well. But the court believes that the balance tips in Green Planet’s favor on the question. Green Planet’s duty under the original complaint was to remediate the mold. Its duty under the amended complaint was to point out the issue and ask for permission to remediate the mold. Those are two different things. If Green Planet was hired to remediate the mold, then it has no defense for failing to do so (if it failed to do so). Of course, there remains the question to whom the duty was owed, but a contractual duty would exist somewhere. On the other hand, if mold remediation is outside the contract’s scope of work, then Green Planet had no direct contractual duty to remediate at all. It might or might not have some duty to ask for an amendment to the contract or to point out the issue, but that is a different duty. That seems to fit within the test for substance. The court also notes that California has a strong public policy favoring resolution on the merits.

All of that said, though, the court will not allow this to become an excuse to continue the trial. Green Planet has answered and it has therefore been able—one presumes—to participate in the case. Accordingly, the trial dates remain, the discovery cut offs remain, and the FSC (and the related filings) remain all as set forth in the court’s March 13, 2024 order. If Green Planet has a different intent, it should say so now as it may effect certain equities.