Judge: Michael E. Whitaker, Case: 20SMCV00426, Date: 2024-05-16 Tentative Ruling

Case Number: 20SMCV00426    Hearing Date: May 16, 2024    Dept: 207

TENTATIVE RULING

BACKGROUND

On March 13, 2020, Plaintiffs Bobbie Reif and Bruce A. Stoller filed the Complaint for (1) quiet title; (2) declaratory relief; and (3) trespass against Defendants Steven A. Kauffman; Janice Kauffman; Wells Fargo Bank, N.A. as Successor Trustee of the Helen C. Zeff Living Trust, dated September 17, 2007; Lonnie Vidaurri; and Lara Vidaurri, to assert their rights to an easement they allegedly retained on a parcel of undeveloped land (the “Zeff Property”) in connection with their prior sale of the land. 

Per stipulation and order entered July 18, 2022, Plaintiff Bruce A. Stoller was removed and Plaintiff Dan Herman was added.  Only Defendant Wells Fargo Bank, N.A., as successor trustee of the Helen C. Zeff Living Trust, dated September 17, 2007 (“Wells Fargo”) remains, as the other defendants have since been dismissed.  Wells Fargo has refused to cooperate with Plaintiffs Bobbie Reif and Dan Herman (“Plaintiffs”) to allow Plaintiffs to construct a driveway on the easement to access Plaintiffs’ adjacent land parcel (“Reif Property”) on the basis that Plaintiffs’ rights to the easement have been extinguished by adverse possession.

On August 1, 2023, the Court ruled on the parties’ cross motions for summary judgment, holding (1) genuine issues of material fact regarding the encroachments precluded summary adjudication regarding adverse possession; (2) the merger doctrine did not extinguish the issue of adverse possession; (3) Plaintiffs failed to meet their burdens of production and persuasion to demonstrate that they have an easement by necessity; (4) Plaintiffs have not alleged an equitable or implied easement in the Complaint; and (5) Wells Fargo’s motion for summary adjudication was granted as to the trespass cause of action on the grounds that Plaintiffs cannot sustain a claim for trespass based on a non-exclusive non-possessory interest in an easement.

Plaintiffs now move for leave to amend the complaint to (1) remove plaintiff Bruce A. Stoller and replace him with Plaintiff Dan Herman; (2) to delete the cause of action for trespass; and (3) to add three new causes of action for (i) quiet title – implied easement; (ii) quiet title – equitable easement; and (4) quiet title – easement by necessity.  Trial is currently set for July 15, 2024.

Wells Fargo opposes the motion and Plaintiffs reply.

LEGAL STANDARD

Amendments to Pleadings: General Provisions

            Under Code of Civil Procedure section 473, subdivision (a)(1), “The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect; and may, upon like terms, enlarge the time for answer or demurrer. The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars; and may upon like terms allow an answer to be made after the time limited by this code.”

            To wit, without notice to the other party the Court has wide discretion to allow either party (i) to add or strike the name of a party or (ii) to correct a mistake in the name of a party or a mistake in any other respect “in furtherance of justice” and “on any terms as may be proper.” (See Code Civ. Proc., § 473, subd. (a)(1); see also Marriage of Liss (1992) 10 Cal.App.4th 1426, 1429.) Alternatively, after notice to the other party, the Court has wide discretion to allow either party to amend pleadings “upon any terms as may be just.” (See Code Civ. Proc., § 473, subd. (a)(1). Similarly, Code of Civil Procedure section 576 states “Any judge, at any time before or after commencement of trial, in the furtherance of justice, and upon such terms as may be proper, may allow the amendment of any pleading or pretrial conference order.”

            Judicial policy favors resolution of all disputed matters between the parties and, therefore, leave to amend is liberally granted. (Berman vs. Bromberg (1986) 56 Cal.App.4th 936, 945; Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 488-489 [this has been an established policy in California since 1901] (citing Frost v. Whitter (1901) 132 Cal. 421, 424; Thomas v. Bruza (1957) 151 Cal.App.2d 150, 155).) The Court of Appeal in Morgan v. Superior Court held “If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend and where the refusal also results in a party being deprived of the right to assert a meritorious cause of action or a meritorious defense, it is not only error but an abuse of discretion.” (Morgan v. Superior Court (1959) 172 Cal.App.2d 527, 530, citations omitted.) Moreover, “it is an abuse of discretion for the court to deny leave to amend where the opposing party was not misled or prejudiced by the amendment.” (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048 [opposing party did not establish harm by the delay in moving to amend the complaint].)

            “The court may grant leave to amend the pleadings at any stage of the action.” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2023) ¶ 6:636 (hereafter Weil & Brown).) Denial of a motion to amend is rarely justified if the motion is timely made and granting the motion will not prejudice the opposing party. (Id. at ¶ 6:639, citations omitted.) However, if the party seeking the amendment has been dilatory, and the delay has prejudiced the opposing party, the judge has discretion to deny leave to amend. (Id. at ¶ 6:655, citations omitted. Absent prejudice, any claimed delay alone is not grounds for denial. “If the delay in seeking the amendment has not misled or prejudiced the other side, the liberal policy of allowing amendments prevails. Indeed, it is an abuse of discretion to deny leave in such a case even if sought as late as the time of trial. (Id. at ¶ 6:653 (citing Higgins v. Del Faro (1981) 123 Cal.App.3d 558, 564-565).) “Prejudice exists where the amendment would result in a delay of trial, along with loss of critical evidence, added costs of preparation, increased burden of discovery, etc. . . . But the fact that the amendment involves a change in legal theory which would make admissible evidence damaging to the opposing party is not the kind of prejudice the court will consider.” (Weil & Brown, supra, at ¶ 6:656, citations omitted.)

            “Even if some prejudice is shown, the judge may still permit the amendment but impose conditions, as the Court is authorized to grant leave ‘on such terms as may be proper.’” (Weil & Brown, supra, at ¶ 6:663, citation omitted.) For example, the court may cause the party seeking the amendment to pay the costs and fees incurred in preparing for trial. (Id. at ¶ 6:664 (citing Fuller v. Vista Del Arroyo Hotel, 42 Cal.App.2d 400, 404).)

California Rules of Court, rule 3.1324: Procedural Requirements

            Pursuant to California Rules of Court, rule 3.1324(a), a motion to amend a pleading before trial must:

“(1) Include a copy of the proposed amendment or amended pleadings, which must be serially numbered to differentiate it from previous pleadings or amendments;

(2) state what allegations in the previous pleading are proposed to be deleted, if any, and where, by page, paragraph, and line number, the deleted allegations are located; and

(3) State what allegations are proposed to be added to the previous pleading, if any, and where, by page, paragraph, and line number, the additional allegations are located.”

            In addition, under Rule 3.1324(b), a motion to amend a pleading before trial must be accompanied by a separate declaration that specifies the following:

“(1) the effect of the amendment;

(2) why the amendment is necessary and proper;

(3) when the facts giving rise to the amended allegations were discovered; and

(4) the reasons why the request for amendment was not made earlier.”

DISCUSSION

            In support of the motion, Plaintiffs have also included a redlined version of the proposed first amended complaint, showing all the changes from the initial complaint.  Plaintiffs have provided the Declaration of Jeffrey A. Meinhardt who states in relevant part:

10. Following the August 1, 2023 hearing on the competing MSJs, the Court denied both MSJs due to the finding of disputed material facts. Although Plaintiffs still believed that the Complaint was sufficient to allege causes of action for implied easement, equitable easement and/or easement by necessity (in addition to causes of action for express easement), the Court's August 1, 2023 ruling was the first time that Plaintiffs thought that the Complaint may need to be amended to clarify their causes of action, as the Court stated that the a cause of action for implied easement was not sufficiently pled in the Complaint to support a finding on summary judgment.

11. Immediately following the denial of the competing MSJs, the parties renewed settlement discussions and scheduled another mediation, which took place on November 21, 2023 and continued for weeks thereafter. Plaintiffs remained hopeful that settlement could be reached prior to the February 20, 2024 trial date and concentrated their efforts and resources toward settlement. Plaintiffs did not want to "upset the apple cart" by causing the parties to incur additional fees to address a motion for leave to amend the Complaint. Only within the last few weeks, settlement negotiations broke down after promising discussions. In an effort to get the case to trial on February 20, 2024, Plaintiffs continued to believe the Complaint was sufficient to pursue the theories of the Alternative Easements at trial. In their Supplemental Trial Brief, filed on February 9, 2024, Plaintiffs disclosed their intent to amend the Complaint at trial to conform to proof of to the Alternative Easements, if necessary.

12. During the Final Status Conference on February 9, 2024, the Court continued the Trial to July 15, 2024 and ordered the parties to engage in a mandatory settlement conference with Judge Cowan (the "MSC"). The parties participated in the MSC on February 15, 2024. Again, Plaintiffs believed that a settlement was within reach based on comments from Judge Cowan and WF's counsel during the MSC. However, in the last few weeks, following the proposal of a settlement agreement by our office to WF's attorneys, we were again disappointed to learn that WF was not willing to agree to certain necessary material terms to which we understood WF would agree. A further MSC is currently scheduled for June 14, 2024.

13. Plaintiffs are no longer optimistic that a settlement can be reached with WF. Therefore, despite Plaintiffs' belief that the Complaint states the facts necessary for quiet title and declaratory relief for express easement, implied easement, equitable easement and easement by  necessity, out of an abundance of caution, Plaintiffs have decided to file this Motion for Leave to File the First Amended Complaint (the “Motion") to clarify Plaintiffs' causes of action for implied easement, equitable easement and easement by necessity and eliminate any procedural objection by WF regarding these causes of action at the time of trial. Moreover, a new California Supreme Court opinion in the case of Romero v. Shih was published in February 2024. This case addresses implied easements and, based on this opinion, Plaintiffs believe that their claim for implied easement was clarified and strengthened.

14. On March 29, 2024, I corresponded with WF's counsel regarding their willingness to stipulate to the filing of a First Amended Complaint. After sending a follow up email, WF's counsel responded that they could not stipulate to an amended complaint without the providing of additional facts. A true a correct copy of this email correspondence is attached hereto as Exhibit H. Based on the upcoming trial date, motion cut-off date and past experience with WF regarding settlement, Plaintiffs decided that they could no longer wait to file the Motion, as WF was well aware of Plaintiffs' arguments for these Alternative Easements, as these causes of action were extensively briefed in the competing MSJ s.

(Meinhardt Decl. ¶¶ 10-14.)

            Plaintiffs’ declaration does not identify any new facts that were discovered.  Rather, Plaintiffs “discovered” that the Court issued an order denying summary adjudication regarding their claims of equitable or implied easements because those claims were not pled in the Complaint.  In other words, Plaintiffs did not discover any new facts; Plaintiffs discovered that they had not pleaded all the legal theories they now wish to pursue.

            Now, on the eve of trial, after discovery has been closed for over a year and the Court denied Plaintiffs’ dispositive motion, Plaintiffs seek to amend the Complaint to allege three entirely new theories of recovery.   Plaintiffs have not demonstrated how the proposed amendments are either necessary or proper. 

            Moreover, Wells Fargo will be prejudiced if Plaintiffs were allowed to essentially start the case over on the eve of trial to pursue new theories of liability after their motion for summary judgment was denied in August 2023 and discovery has been closed for over a year.  Moreover, the Court notes that Plaintiffs in their quest to amend the Complaint have not sought to reopen discovery and/or continue the trial to mitigate the prejudice that Wells Fargo will be subjected to by the prolonged delay in seeking to amend the Complaint.   (See Fisher v. Larsen (1981) 138 Cal.App.3d 627.)  In Fisher v. Larsen, the Court of Appeal held that the plaintiff “[k]new of the motions for summary judgment as early as January 6, 1981, but took no action to amend for five months. The rights to amend a complaint rest within the sound discretion of the court, and may be denied where there has been a long delay in seeking the amendment. The court was within its discretion in denying the amendment.”  (Id. at p. 649 [cleaned up].) 

            As to the other proposed amendments (1) to remove plaintiff Bruce A. Stoller and replace him with Plaintiff Dan Herman and (2) to delete the cause of action for trespass, the Court finds those proposed amendments to be moot.  Dan Herman has been added as a plaintiff and Bruce A. Stoller has been removed as a plaintiff per the Court’s order of July 18, 2022.  Further, the Court granted Wells Fargo’s motion for summary adjudication on Plaintiffs’ trespass cause of action as set forth in the Court’s ruling of August 1, 2023.    

CONCLUSION AND ORDER

            Therefore, the Court denies Plaintiffs’ Motion for Leave to Amend the Complaint. 

            Plaintiffs shall provide notice of the Court’s ruling and file a proof of service of such.

DATED:  May 16, 2024                                 ___________________________

                                                                  Michael E. Whitaker

                                                                  Judge of the Superior Court