Judge: Michael E. Whitaker, Case: 20STCV17211, Date: 2023-05-09 Tentative Ruling

Case Number: 20STCV17211    Hearing Date: May 9, 2023    Dept: 32

PLEASE NOTE:   Parties are encouraged to meet and confer concerning this tentative ruling to determine if a resolution may be reached.  If the parties are unable to reach a resolution and a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept32@lacourt.org indicating that party’s intention to submit.  The email shall include the case number, date and time of the hearing, counsel’s contact information (if applicable), and the identity of the party submitting on this tentative ruling.  If the Court does not receive an email indicating the parties are submitting on this tentative ruling and there are no appearances at the hearing, the Court may place the motion off calendar or adopt the tentative ruling as the order of the Court.  If all parties do not submit on this tentative ruling, they should arrange to appear in-person or remotely (which is highly encouraged).  Further, after the Court has posted/issued a tentative ruling, the Court has the inherent authority to prohibit the withdrawal of the subject motion and adopt the tentative ruling as the order of the Court. 

TENTATIVE RULING

MOTION

Defendant/Cross-Complainant Francini, Inc. (Francini) moves the court for an order granting leave to file a Second Amended Cross-Complaint (SAXC).  Francini asserts that the proposed SAXC is necessary to assert an additional cause of action for negligence against Cross-Defendants Armstrong Transport Group, LLC (Armstrong) and Neon Logistics, LLC (Neon), based on new facts learned through discovery and a recent Motion for Summary Judgment filed by Neon.  Armstrong and Neon separately oppose the motion.  Francini replies.

On April 18, 2023, after review and consideration of the moving papers, opposition, reply, and oral argument, the Court continued the hearing for the instant motion to allow the parties to submit supplemental papers in regard to Francini’s motion for leave to file a SAXC.  On April 25, 2023, Francini filed a supplemental brief in support of its motion.  On May 2, 2023, Armstrong and Neon separately filed supplemental oppositions.

ANALYSIS

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 2022) ¶ 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.”

Second Amended Cross-Complaint

Here, Francini argues the Court should grant it leave to amend its Cross-Complaint in the  interest of justice.  First, Francini explains that its business relationship with Neon and Armstrong is based on Francini’s expectation that Neon and Armstrong send it qualified, highly trained and experienced drivers to fulfill Francini’s transportation needs.  Francini states that it was not aware what Neon and Armstrong did or did not do in vetting the transportation companies and drivers before sending them to Francini for its transportation needs.  Thus, Francini did not initially have a basis to bring a negligence cause of action against either Neon or Armstrong. 

Further Francini highlights that its proposed amendment will not likely delay trial because the current trial date is fourth months away, and the additional cause of action is based on the same underlying facts as the indemnity and duty to defend causes of action already asserted against Armstrong and Neon.  Francini contends that the negligence cause of action will allow all aspects of the underlying dispute to be resolved in one judicial proceeding.  Francini claims that it only recently determined, based on written discovery and depositions completed to date, along with the assertions contained in Neon’s Motion for Summary Judgment/Adjudication that a claim for negligence could be brought against Neon and Armstrong.  (See Declaration of Jonathan A. Ross, ¶ 8.)

Armstrong argues in opposition that the proposed addition of a negligence cause of action is “superfluous and redundant” and further that it is barred by California’s Economic Loss Rule.”  Neon argues in opposition that Francini cannot state a cause of action for negligence against Neon.  The Court finds that these arguments are related to the merits of the proposed amendments which are not considered when determining whether to grant leave to amend.  (See Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048.) 

Neon additionally argues in opposition that Francini has failed to articulate the new facts which have purportedly given rise to the amended allegations, and when they were discovered.  Neon also states alternatively that Francini has failed to give reasons why the requested amendment was not made earlier.  Neon characterizes Francini’s declaration in support of its motion as conclusory and contends that Francini knew the facts and allegations which are the basis for Francini’s proposed new cause of action since January 2021 when it first filed its cross-complaint.  Neon concludes that because Francini has failed to articulate any new facts and has further failed to explain the delay in seeking the amendment, the Court should deny Francini leave to file the SAXC. 

In reply, Francini explains that it learned through recent completed discovery, and assertions stated in Neon’s Motion for Summary Judgment, that the transportation company selected by Armstrong and Neon assigned two drivers to haul Francini’s load, one of them being Plaintiff.  Further Francini learned that Plaintiff did not speak to the second driver and that both Plaintiff and the second driver left the subject load for nearly one day unsecured and unsupervised.  Finally, Francini has determined that Armstrong and Neon did not perform research or investigation into the transportation company they selected for Francini.

The Court notes that the declaration advanced with Francini’s motion still does not describe with sufficient detail when and how it discovered the above-described facts.  The Court finds Francini’s statement that it learned this information through recent completed discovery and admissions in Neon’s motion for summary judgment, is too vague to meet the procedural requirements of California Rules of Court, rule 3.1324.  Further, as is highlighted by Neon, Francini has failed to explain why their request to amend was not made earlier when their new cause of action for negligence is based on the same facts and underlying accident that support the causes of action already included in the cross-complaint.  Accordingly, the Court finds Francini’s motion to be procedurally defective. 

Supplemental Papers

In support of its supplemental brief in support of leave to file a SAXC, Francini advances the declaration of its counsel Jonathan A. Ross (Ross).  Ross avers that after his office received Neon’s Motion for Summary Judgment/Adjudication on January 5, 2023, Ross reviewed Neon’s previously received discovery responses.  (Declaration of Jonathan A. Ross, ¶¶ 3-6.)  In Neon’s September 3, 2021 verified responses to Francini’s Special Interrogatories, set one, Neon indicated it had no policies or procedures to ensure JCM Freight Transport (JCM) retained qualified or trained drivers for loading and unloading goods.  (Declaration of Jonathan A. Ross, ¶ 5, Exhibit A.)  In Neon’s September 3, 2021 verified responses to Francini’s Request for Admissions, set one, Neon admitted it did know if Plaintiff received proper training or was qualified to operate or load/offload heavy cargo from a flatbed truck.  (Declaration of Jonathan A. Ross, ¶ 6, Exhibit B.)  Ross explains that based on the foregoing responses, he understood Neon could be liable to Francini via a comparative negligence theory, but was unsure whether this evidence would be sufficient to defeat Neon’s Motion for Summary Judgment.  (Declaration of Jonathan A. Ross, ¶ 7.)

Next Ross highlights Plaintiff’s June 16, 2022 deposition, during which Plaintiff confirmed that his employer, JCM, originally dispatched a different driver to make the subject delivery, who then left the subject flatbed truck with delivery at a truck stop unprotected and unsupervised.  (Declaration of Jonathan A. Ross, ¶ 8.). It was not until nearly 24 hours later that Plaintiff arrived to complete the delivery.  (Declaration of Jonathan A. Ross, ¶ 8.)  Additionally, Ross advances the February 1, 2023 deposition transcript of Ryan Edwards, a Neon employee (Edwards).  (Declaration of Jonathan A. Ross, ¶ 9.)  Edwards states that Neon’s policy is to contact the transport driver prior to their picking up any load.  (Declaration of Jonathan A. Ross, ¶ 9.)  Edwards could not confirm if he spoke to either the initial unidentified JCM driver, or Plaintiff, before the subject load was picked up.  (Declaration of Jonathan A. Ross, ¶ 9.)  Edwards also stated that Neon was not aware that a second driver was dispatched to complete the subject delivery, nor that the subject delivery and flatbed truck would be abandoned for nearly 24 hours before the second driver, Plaintiff, could complete the delivery.  (Declaration of Jonathan A. Ross, ¶ 9.)

Ross ultimately concluded based on this most recent deposition that there was a direct negligence theory against Neon and Armstrong.  (Declaration of Jonathan A. Ross, ¶ 10.)  This theory was based on Francini’s reliance upon Neon to hire only qualified and competent drivers to protect Francini from liability resulting from injuries caused by the negligent acts of unskilled and untrained drivers transporting heavy loads.  (Declaration of Jonathan A. Ross, ¶ 10.)  Francini argues that the facts and contentions outlined in Ross’s declaration meet the procedural requirements of California Rules of Court, Rule 3.1324, and thus its motion for leave to file a SAXC should be granted.  

The Court finds, as is noted in both Neon and Armstrong’s supplemental oppositions, that Francini has failed to present any recently discovered information that would support a negligence theory against Neon and Armstrong that it was not already aware of when it first received written discovery from Neon on September 3, 2021.  Further Francini has failed to offer reasonable justification for waiting until March of 2023 to request an amendment to the complaint based on a theory of liability that was discovered nearly a year and six months prior.  Francini points to the Edwards deposition as a source of new information that would justify its recent request for leave to amend.  However, the Edwards deposition does not provide any new information regarding the theory of liability Francini proposes to allege against Neon and Armstrong in the SAXC: that they had a duty to vet or train drivers they provided to Francini, and did not do so. 

Neon further argues that the proposed added allegations fail to state a cause of action and further are duplicative of the allegations already included in the first amended cross-complaint.  The Court finds however, similarly as mentioned above, these arguments are related to the merits of the proposed amendments which are not considered when determining whether to grant leave to amend.  (See Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048.) 

Finally, the Court notes that neither Armstrong nor Neon have advanced arguments explaining how the Court granting Francini’s dilatory request for leave to amend would greatly prejudice them.  Absent prejudice, any claimed delay alone is not grounds for denial.  (Weil & Brown, supra, at ¶ 6:653.)  The trial for this matter is set for September 9, 2024, which should give the parties sufficient time to complete necessary discovery for the added negligence cause of action without imposing substantial prejudice on Armstrong or Neon.

CONCLUSION AND ORDER

Accordingly, the Court finds that Francini has met its burden in establishing a factual and legal basis for leave to file a SAXC and grants Francini’s motion for leave.  Francini shall file and serve the proposed SAXC on or before May 23, 2023.   

The Court orders Francini to provide notice of the Court’s ruling and file a proof of service of such.