Judge: Michael C. Kelley, Case: 21AVCV00577, Date: 2022-09-15 Tentative Ruling
Case Number: 21AVCV00577 Hearing Date: September 15, 2022 Dept: A15
Background
This action for quiet title was initiated on July 16, 2021, by Leo D. Skeen (“Leo”) against Defendants Chadwick Skeen and Penilope Pearl Jacobs (collectively, “Defendants”) regarding the real property located at 44648 Rosario Avenue, in the city of Lancaster (the “Property”). Leo since passed away on October 5, 2021. (Pl.’s Mot. Substitute at Ex. 1.) His daughter and successor-in-interest, Vanisa Alicia Bennett (“Plaintiff”), has been substituted into this action as plaintiff in his stead.
Plaintiff alleges that, on October 18, 2010, Leo purchased and became the sole owner of the Property. (First Am. Compl. ¶ 13.) She alleges that Leo permitted his younger brother, Defendant Skeen, and his brother’s wife, Defendant Jacobs, to live at the Property. (Ibid.)
Plaintiff alleges that, on April 20, 2021, Defendant Skeen used a fake identification card to pretend he was Leo, and used it to transfer the Property from Leo to Defendant Jacobs without Leo’s knowledge. (First Am. Compl. ¶ 16.) Defendants executed the grant deed on April 20, 2021, and recorded it with the Los Angeles County Recorder’s Office on April 23, 2021. (Id., ¶ 20.)
Plaintiff filed the operative First Amended Complaint on February 24, 2022. After Defendants’ Demurrer to the First Amended Complaint was sustained in part, the remaining causes of action are for (2) declaratory relief, (3) quiet title, (4) financial elder abuse, and (5) slander of title. (Min. Ord., dated Jun. 28, 2022.)
On August 19, 2022, Defendant Skeen timely filed and served the instant Motion for Leave to File a Cross-Complaint. Plaintiff filed a timely Opposition and Defendant Skeen filed a timely Reply.
Analysis
Motion for Leave to File Cross-Complaint—Under Code of Civil Procedure section 426.30, a defendant against whom a complaint has been filed and served must “allege in a cross-complaint any related cause of action which (at the time of serving his answer to the complaint) he has against the plaintiff[.]” (Code Civ. Proc., § 426.30, subd. (a).) If the defendant fails to allege his related cause of action, he many not thereafter assert it against plaintiff in a future lawsuit. (Ibid.)
A “related cause of action” is defined as “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.” (Code Civ. Proc., § 426.10, subd. (c).)
If a defendant fails to assert his related cause of action, “whether through oversight, inadvertence, mistake, neglect, or other cause,” he may
apply to the court for leave 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 . . . 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.)
Here, Defendant Skeen moves to file a verified cross-complaint, lodged as Exhibit A to his motion, alleging cross-claims for quiet title, adverse possession, conversion, and unjust enrichment. His attorney, Amanda Rokita, attests that, despite the failure to file the cross-complaint with the answer, Defendants and their attorneys acted in good faith: she attests to having only realized the need to file a cross-complaint after taking over the case from Defendants’ original attorney. (Defs. Decl. Rokita Supp. Mot. Leave File Cross-Compl. ¶¶ 4-5.)
But Plaintiff argues this motion should be denied because it was made in bad faith, it does not qualify as a compulsory cross-complaint, it does not meet the requirements for granting this motion, and the cross-claims should be pursued in Probate.
The Court first addresses whether Defendant Skeen has met the statutory requirements for being granted leave to file a cross-complaint, and then addresses Defendant’s arguments.
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Statutory Requirements for Granting Leave
In order for the court to grant leave to belatedly file a cross-complaint, Code of Civil Procedure section 426.50 simply requires a compulsory cross-claim, notice to the adverse party, and good faith. (Code Civ. Proc., § 426.50.)
Plaintiff contends that Defendant Skeen should be denied leave to file his cross-complaint because he has not explained his delay in filing, and does not allege the existence of new facts or claims. But the Court is unaware of such requirements. Instead, Plaintiff appears to equate the requirements for amending pleadings to add completely new causes of action with the requirements for filing a compulsory cross-claim.
The language of the governing statute provides that the party may apply for leave to file a compulsory cross-claim after failing to file it earlier, whether that failure was caused by “oversight, inadvertence, mistake, neglect, or other cause.” (Code Civ. Proc., § 426.50.) This language suggests that, even in the face of inexcusable neglect, a party can be given leave to file, so long as it acted in good faith.
As for Plaintiff’s contention that Defendant Skeen must show “new facts”; the Court was unable to locate the authority Plaintiff cited in support of this contention—“Court Rule 3.124(a) and (b).” (Pl.’s Mem. P. & A. Opp’n Mot. Leave File Cross-Compl. at 4.) Presuming she meant to cite California Rules of Court, rule 3.1324, this rule pertains to amending pleadings, not to filing compulsory cross-complaints.
It is instead sufficient that Defendant Skeen’s attorney attests to having only realized the need to file a cross-complaint after taking over the case, and that the failure to recognize this earlier was not due to bad faith. (Defs. Decl. Rokita Supp. Mot. Leave File Cross-Compl. ¶¶ 4-5.) The attorney, Ms. Rokita, was only assisting with this case until it was determined that Defendants’ original attorney was unable to proceed. She then substituted into this case on June 28, 2022, became the main counsel, and filed the Motion for Leave to File a Cross-Complaint on August 19, 2022. This means Ms. Rokita completed her “review of the case in its entirety,” attempted to stipulate with Plaintiff’s counsel, and wrote and filed the instant motion in less than two months. (Id., ¶¶ 4-6.) If anything, this expedience suggests good faith, in that Ms. Rokita brought the potential cross-claims to Plaintiff’s and Court’s attention as soon as she was able.
The Court therefore finds Defendants acted in good faith. There is also no doubt that the proposed cross-complaint is “compulsory”: the cross-claims for quiet title and adverse possession of the Property clearly arise out of the same transactions. The proposed cross-complaint alleges a different perspective on Leo’s purchase of the Property in 2010. (First Am. Compl. ¶ 13; Defs. Mot. Leave File Cross-Compl. at Ex. A [PDF p. 9].)
In summary, the Court finds Defendants acted in good faith, despite failing to file the cross-complaint with their answer; and that the proposed cross-complaint is compulsory. As this motion was also properly served on Plaintiff, Defendant Skeen has satisfied all the statutory requirements for leave.
Bad Faith of Moving Party
Public policy strongly favors granting a motion to file a cross-complaint “unless bad faith of the moving party is demonstrated . . . .” (Silver Organizations Ltd. v. Frank (1990) 217 Cal.App.3d 94, 99.) The Court of Appeal defined “bad faith” in the context of moving for leave to file cross-complaints as:
“‘[t]he opposite of “good faith,” generally implying or involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake ..., but by some interested or sinister motive[,] ... not simply bad judgment or negligence, but rather ... the conscious doing of a wrong because of dishonest purpose or moral obliquity[.]’”
(Id., 100.) “Bad faith” may be evinced by words or conduct which suggest “dishonest purpose, moral obliquity, sinister motive, furtive design or ill will.” (Ibid.)
For example, in Gherman v. Colburn (1977) 72 Cal.App.3d 544, the Court of Appeal found that a defendant acted in bad faith by waiting until the first day of trial to move for leave to file a cross-complaint. (Id., 559.) The appellate court saw this as bad faith warranting the motion’s denial because of “the long history of litigation between the parties,” which had demonstrated that “both sides were jockeying for position over the right to a jury trial.” (Ibid.) It saw the defendants’ motion for leave to file a cross-complaint as a tactic in furtherance of their objective of avoiding the jury trial. (Ibid.)
Here, Plaintiff argues that Silver Orgs. Ltd. v. Frank, supra, 217 Cal.App.3d 94 stands for the proposition that “where there has been a delay of six months between filing the complaint and the motion then there may be bad faith.” (Pls. Mem. P. & A. Opp’n Mot. Leave File Cross-Compl. at 2.) Plaintiff then concludes that, because “it has been more than six months since the last filed Verified Amended Answer filed by Defendants,” the motion “should be denied due to bad faith.” (Ibid.)
But in Silver Orgs. Ltd. v. Frank, supra, 217 Cal.App.3d 94, the Court of Appeal simply noted that less than six months had elapsed between the date that the plaintiffs filed their complaint and the date the defendant moved to file the cross-complaint. (Id., 100.) Its actual holding was that a trial court abuses its discretion by denying a motion for leave to file a cross-complaint in the absence of “substantial evidence” of bad faith. (Id., 99.)
In the instant matter, there is zero evidence of bad faith; and the amount of time between Defendant Skeen’s answer and his Motion for Leave to File a Cross-Complaint in itself has no particular bearing on his good or bad faith. Plaintiff argues that Defendant Skeen’s cross-claims for quiet title and adverse possession are evidence of bad faith because they constitute a repeat attempt to argue issues this Court has already ruled upon. Plaintiff contends that, since the cross-claims for quiet title and adverse possession share elements with some of Plaintiff’s causes of action, and this Court overruled Defendants’ demurrer to those causes of action, the Court has already ruled on these cross-claims. Her implication is that Defendants possess an ulterior, “sinister motive” for filing this motion—to get a second bite at the apple, so to speak.
But in overruling Defendants’ demurrer to the third, fourth, and fifth causes of action, this Court merely found that the causes of action were sufficiently pled; it made no determination as to the whether these causes will be proved. The Court did not, for example, decide who actually possesses title. Therefore, the Court’s ruling on the demurrer does not preclude Defendant Skeen from asserting his own cross-claims—these issues have yet to be decided. There is nothing “sinister” about filing a cross-claim on an issue that has not been adjudicated. These cross-claims do not evince bad faith.
There is, in fact, no evidence of bad faith; and this finding supports the grant of Defendant Skeen’s motion.
Compulsoriness
Plaintiff next argues this motion must be denied because Defendant Skeen’s cross-claims are not “compulsory,” and were not filed with his answer. She argues his cross-claims are not compulsory because “[c]laims arising after service of the answer are permissive, not compulsory, even if the subject matter is related to the complaint.” (Pl. Mem. P. & A. Opp’n Mot. Leave File Cross-Compl. at 3.) She then points to Code of Civil Procedure section 426.30, which states that a party who fails to allege his related causes of action at the time he answers the complaint “may not thereafter in any other action assert against the plaintiff the related cause of action not pleaded.”
The statute prohibits a party from asserting a related cause of action in a future “action,” i.e., lawsuit. It does not, as Plaintiff contends, prevent the party from raising the related cause of action in the same lawsuit. Such a scenario is exactly what Code of Civil Procedure section 426.50 provides a mechanism for. As Plaintiff points out, “[a]t no point before or with the filing of Defendants’ answers, did they allege or bring about the claims stated in the proposed Verified Cross-Complaint . . . .” (Pl. Mem. P. & A. Opp’n Mot. Leave File Cross-Compl. at 4.) This is true—and it is the precise reason why Defendant Skeen filed this motion: because he failed to file his cross-claims with his answer, and now needs the Court’s permission to assert them. This type of oversight is the exact justification for the instant motion.
Plaintiff’s argument that the proposed cross-complaint is permissive, not compulsory, is also incorrect. She correctly cites the rule that, “[t]o be considered a compulsory cross-complaint, a related cause of action must have existed at the time of the service of” the defendant’s answer to the plaintiff’s complaint. (Crocker Nat. Bank v. Emerald (1990) 221 Cal.App.3d 852, 864.) However, Plaintiff then conflates this rule with her contention that, to be a compulsory cross-complaint, a related cause of action must have been asserted at the time of service at the answer. This is erroneous. As long as Defendant Skeen’s cross-claims are related to Plaintiff’s causes of action, the cross-complaint is compulsory; and regardless, whether a cross-complaint is compulsory or permissive is not in itself a reason to deny leave to file it.
Probate
Plaintiff’s last argument is that this motion should be denied because the claims should instead be filed in Probate.
The issue of who owns title to real property is distinct from the issue of how an estate should be distributed. A probate case would determine how Leo wished for the Property to be disposed of, in accordance with any guidance from a will, trust, or other estate plan.
But if Leo does not own title to the Property, then the execution of his estate plan is irrelevant—he would have had no right to dispose of the Property in the first place.
This civil matter will determine who owns title. The Court is unaware of any authority that divests it of its ability to adjudicate this issue.
Conclusion
Defendant Chadwick Skeen’s Motion for Leave to File a Cross-Complaint is GRANTED.