Judge: Michael E. Whitaker, Case: 21STCV43580, Date: 2023-09-13 Tentative Ruling

Case Number: 21STCV43580    Hearing Date: September 13, 2023    Dept: 207

TENTATIVE RULING

BACKGROUND

Plaintiffs United Clinical Research, Inc. (“United Clinical”), Peyman Banooni, Stan Gershovich and Faramarz (Fred) Shaham originally brought suit against Defendants Michael Landver[1] and California Clinical Research (collectively, “Defendants”) alleging 12 causes of action stemming from allegations that Defendants sabotaged the business and financial operations of United Clinical, causing its corporate status to be suspended.  (Complaint ¶ 12.)  

On August 3, 2022, Plaintiff Peyman Banooni dismissed the Ninth Cause of Action, Plaintiff Stan Gershovich dismissed the Eleventh Cause of Action, and Plaintiff Faramarz (Fred) Shaham dismissed the Tenth cause of action, which were the only causes of action each of these Plaintiffs had respectively brought.  Thus, the only Plaintiff with claims remaining against Defendants is United Clinical.

United Clinical now seeks leave to amend the complaint to modify paragraph 3 to update the allegations to indicate that United Clinical is no longer suspended; to add sub-paragraphs E. and F. to paragraph 9, adding allegations regarding Defendants’ intent and purpose, and solicitation of United Clinical’s agents; and to remove the Ninth, Tenth, and Eleventh causes of action and all plaintiffs except United Clinical.  Of note, the originally filed complaint appears to be missing pages 2, 3, and 4, and jumps from the cover page to what appears to be the second half of paragraph 11.  Thus, the originally filed complaint did not contain paragraphs 1-10 or the first half of paragraph 11, and as such, paragraphs 1-11 of the amended complaint are all new.

Defendants have not opposed Plaintiff’s motion.

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

            United Clinical has included a copy of the proposed amended complaint, has stated what will be deleted and what is proposed to be added.  The accompanying declaration explains that during United Clinical’s corporate suspension, which lasted from September 29, 2020 until February 24, 2023, United Clinical “was absolutely barred from defending or prosecuting causes or claims before this court.” 

            United Clinical does not explain its nearly 6-month delay in moving for leave to amend the complaint between February 24, 2023 when its corporate status was reinstated and August 14, 2023, when it finally moved for leave to amend the complaint.  Moreover, the hearing on its motion for leave to amend is on September 13, 2023, and the final status conference in this case is currently scheduled for September 15, 2023, and a non-jury trial set for October 9, 2023.  Nonetheless, the Court finds that the proposed amendments are minor, and merely clean up the complaint and clarify the current allegations.  Moreover, the Court notes that Defendants have not opposed the proposed amendments.

CONCLUSION AND ORDER

For the reasons stated herein, the Court grants United Clinical’s Motion for Leave to file the First Amended Complaint and orders United Clinical to file and serve the First Amended Complaint by September 20, 2023. 

United Clinical shall provide notice of the Court’s ruling and file a proof of service regarding the same. 

DATED:  September 13, 2023                                               ___________________________

                                                                                          Michael E. Whitaker

                                                                                          Judge of the Superior Court