Judge: Michael E. Whitaker, Case: 22SMCV02095, Date: 2023-12-18 Tentative Ruling

Case Number: 22SMCV02095    Hearing Date: January 18, 2024    Dept: 207

TENTATIVE RULING

MOTION

            This case arises from a dispute concerning the purchase and installation of chevron flooring in Plaintiff Ressie Huang aka Rui Xue Huang’s (“Plaintiff”) home.  Although Plaintiff purchased the defective flooring at issue, Defendant Zra Estates, Inc. dba Rhodium Floors (“Defendant”) allegedly refused to return it to the manufacturer for a refund, to deliver it back to Plaintiff, or to attempt to sell it to mitigate Plaintiff’s damages.  As such, Plaintiff seeks leave to amend the complaint to allege a cause of action for conversion.  Defendant opposes, arguing Plaintiff’s proposed amendment is not meritorious, and Plaintiff has replied. 

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

            Plaintiff seeks leave to amend the complaint to add a cause of action for conversion, stemming from Defendant’s failure to timely return the defective chevron flooring Plaintiff purchased to the manufacturer for a refund, to deliver the flooring product to Plaintiff, or to re-sell the flooring to mitigate damages. 

            Plaintiff has lodged a proposed first amended complaint, and the motion describes the proposed additions. 

            Plaintiff has also provided the Declaration of Sandra Khalili, which provides a detailed timeline of various discovery and settlement negotiations.  Specifically, the Declaration indicates:

·         Defendant served responses to Plaintiff’s Requests for Production of Documents and Form Interrogatories on March 7, 2023 and to Plaintiff’s special interrogatories on September 21, 2023.  (Khalili Decl. ¶ 3.)

·         Believing Defendant’s discovery responses were incomplete, Plaintiff subpoenaed third party Frontier Floor Company (“Frontier”) for a deposition and for production of documents on October 26, 2023, but to date Frontier has not appeared for deposition or produced any documents.  (Khalili Decl. ¶ 4.)

·         At a May 1, 2023 Case Management Conference, the parties agreed to participate in a mandatory settlement conference, which was continued twice – first by stipulation and then on the Court’s own motion – and was finally held on November 2, 2023.  (Khalili Decl. ¶¶ 5-7.)

·         The parties agreed “to hold off on depositions and motion practice pending the MSC” and to “attempt to resolve the dispute before incurring substantial fees and resources for pre-trial and trial preparation and additional discovery.”  (Khalili Decl. ¶ 7.)

·         The MSC was ultimately unsuccessful and settlement negotiations conclusively broke down between the parties on November 9, 2023.  (Khalili Decl. ¶¶ 8-9.)

·         On November 15, 2023, Plaintiff received confirmation from Defendant’s counsel that Defendant would not stipulate to the proposed amendment (Khalili Decl. ¶ 9.)

The Khalili Declaration also discusses the timeline of events giving rise to the litigation:

·         “Plaintiff first notified Defendant of the defects on July 11, 2022 and requested that Defendant repair and return the flooring by July 15, 2022[.]” (Khalili Decl. ¶ 11a.)

·         “Plaintiff gave Defendant a final deadline of July 29, 2022 to return the flooring.”  (Khalili Decl. ¶ 11a.)

·         “Plaintiff and Defendant first discussed sale of the flooring in April and May 2023 after the lawsuit was already filed[.]”  (Khalili Decl. ¶ 11b.)

·         “In late September 2023, Defendant’s counsel, Mr. Avrahamy, informed me that the flooring had not been sold, and that Defendant would continue to make efforts to sell the flooring.”  (Khalili Decl. ¶ 11c.)

·         “At the November 2, 2023 MSC, Plaintiff and I were again informed that none of the flooring had been sold.”  (Khalili Decl. ¶ 11c.)

·         “Plaintiff learned shortly before or at the MSC of Defendant’s claim that not all of chevron pattern flooring that it had withheld from Plaintiff was defective.  Nonetheless, Defendant had continued to withhold all of the flooring – even the part that Defendant claimed was not defective.”  (Khalili Decl. ¶ 12.)

Defendant contends that Plaintiff was aware of the facts underlying the new conversion claim when the complaint was originally filed in October 31, 2022, and that the new facts do not support a conversion claim.

The Court disagrees.  Plaintiff has provided a declaration indicating that Plaintiff did not discover that Defendant withheld flooring that was not defective until either shortly before or at the MSC, which was held on November 2, 2023.  Moreover, the Khalili declaration indicates that a motion for leave to amend was not filed sooner because the parties were earnestly working toward settlement. 

With respect to Defendant’s arguments about the merits of the conversion claim, the Court will generally not consider the merits of the proposed amendment in determining whether to grant leave to amend.  (See Kittredge Sports Co. v. Superior Court, supra, 213 Cal.App.3d at p. 1048; see also Weil & Brown, supra, at ¶ 6:656, citations omitted  [“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”].)

Finally, Defendant opposes the motion for leave to amend on the grounds that it will likely require another trial continuance so that Defendant can challenge the new claim by dispositive motion.  But 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).)  Defendant does not argue prejudice in any way.

CONCLUSION AND ORDER

            Therefore, the Court finds that Plaintiff has satisfied all procedural and substantive requirements and grants Plaintiff’s Motion for Leave to Amend. 

Further, the Court orders Plaintiff to file and serve the proposed amended complaint on or before February 1, 2024.

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

DATED:  January 18, 2024                                                    ___________________________

                                                                                          Michael E. Whitaker

                                                                                          Judge of the Superior Court