Judge: Michael E. Whitaker, Case: 22STCV07001, Date: 2024-09-04 Tentative Ruling

Case Number: 22STCV07001    Hearing Date: September 4, 2024    Dept: 207

TENTATIVE RULING

BACKGROUND

On February 25, 2022, Plaintiffs Marina Harmon, Michael C. Colonnese, and Brittany Gleason (“Plaintiffs”) filed suit against Defendants 501 Altair, LLC; Bianca Ryan-Lopez; PC Rutherford; and Moss Management Services, Inc., dba Moss & Company Property Management (“Moss”), alleging six causes of action for (1) breach of covenant of quiet enjoyment; (2) constructive eviction; (3) negligence; (4) intentional infliction of emotional distress; (5) breach of the warranty of habitability; and (6) nuisance, due to mold issues at the property Plaintiffs rented from Defendants.  On December 8, 2022, the Court granted Moss’s motion to strike punitive damages from the complaint.

Plaintiffs filed the First Amended Complaint on January 11, 2023, adding Defendant Concord Real Estate Services.

Plaintiffs now move for leave to file a second amended complaint (“SAC”) adding three causes of action for (7) intentional misrepresentation of fact; (8) suppression of fact; and (9) negligent misrepresentation of fact; and to reassert the claim for punitive damages.  Moss opposes the 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

            In support of the motion, Plaintiffs have provided the Declaration of Ara Joe Keropian, to which Plaintiffs have attached a redlined version of the proposed SAC and described the proposed changes (Keropian Decl. ¶¶ 11-12.)  The Keropian declaration also indicates Moss originally served Plaintiffs with documents on July 25, 2023.  (Id. at ¶ 3.)             The Keropian declaration provides the following detail: 

6. This motion was not filed earlier because during the ensuing several months following the document production, Plaintiffs were busy preparing for their depositions taken by Moss on August 22, 23 and 24, 2023, and responding to discovery consisting of RFAs, FROGS, DPD, and SPROGS to each of the plaintiffs propounded by Moss.

7. Plaintiffs were also busy reviewing the documents produced and meeting and conferring with Moss regarding further discovery responses, and production of additional documents, which were ultimately served on Plaintiffs by Moss on October 20, 2023.

8. Plaintiffs, during the next several months engaged in additional discovery in attempting to obtain the complete file and other documents that Plaintiffs suspected had not been produced by Moss by subpoenaing documents directly from RMC. However, after an attempt had been made to serve RMC with the subpoena dated August 8, 2023, for production on September 8, 2023, Plaintiffs learned that RMC was no longer at its Lake Forest location, so Plaintiffs were put to the additional task of locating the appropriate RMC location to serve an updated subpoena. On September 1, 2023, Plaintiffs revised the subpoena and managed to serve RMC who ultimately produced documents on September 14, 2023 that consisted of 659 mb of documents and photographs requiring review and analysis by Plaintiffs.

9. Plaintiffs during this same time period had been attempting to serve Defendants Rutherford and Bianca Ryan-Lopez, after a number of previous attempts at service were unsuccessful. Delay in filing a motion for leave to amend was delayed because Plaintiffs wanted these defendants to make a general appearance in the case, otherwise, Plaintiffs would have to reserve the defendants with the summons and second amended complaint. Defendants Rutherford and Ryan-Lopez ultimately filed their answer to the FAC on November 2, 2023.

10. The parties also engaged in discussions concerning and agreed to mediation. Mediation had been scheduled, or so Plaintiffs thought, so Plaintiffs did not wish to create more issues in an effort to avoid complicating the case more than it was for the mediation. However, the mediation did not occur through inadvertence of counsel who graciously undertook the task of arranging the mediation, but mediation did not occur after defendants advised Plaintiffs that their insurance carrier purportedly denied coverage after initially providing coverage. I wrote to Defendants’ counsel in regard to Plaintiffs’ reasons for wanting to amend and their intentions to move to amend, but Defendants refused to stipulate to Plaintiffs filing a second amended complaint to add causes of action for fraud based on evidence discovered during litigation in the discovery process. Defendants will not be prejudiced by the amendment and in additional discovery have already made their position known in regard to their defense to Plaintiffs’ fraud claims.

(Keropian Decl. at ¶¶ 6-10.)

            Moss originally produced documents in July 2023, which appear to form the basis of the requested amendments (Id. at ¶ 3), but also made a supplemental production on October 20, 2023 (Id. at ¶ 7), which may or may not also form the basis of the requested amendments, and non-party RMC produced documents in response to a subpoena on September 14, 2023 (Id. at ¶ 8), which also may or may not form the basis of the requested amendments.  Plaintiffs were further delayed because Defendants Rutherford and Ryan-Lopez had not been successfully served and did not file a responsive pleading until November 2, 2023. 

            It is unclear from the declaration which production(s) of documents included information warranting the requested amendments, which documents were instructive, or what specific information was learned that gives rise to the requested amendments.  The declaration also does not specify why Plaintiffs delayed nearly nine months from November 2, 2023, when Defendants Rutherford and Ryan-Lopez answered the FAC, to August 7, 2024, when Plaintiffs filed the motion for leave, other than vague allegations of a planned mediation that did not ultimately occur due to “inadvertence of counsel who graciously undertook the task of arranging the mediation, but mediation did not occur after defendants advised Plaintiffs that their insurance carrier purportedly denied coverage after initially providing coverage.”  (Keropian Decl. at ¶ 10.)  Which counsel’s inadvertence is unclear.  It is also unclear how the insurance coverage denial is related to counsel’s inadvertence (if at all), or whether mediation is still on the table. 

There is some additional information in the declaration about what new information was purportedly discovered from the document production(s) in July – October 2023, but the declaration is formatted in a way that contains pasted excerpts of the proposed SAC, making the declaration not only very hard to follow, but also deprives many of the substantive statements of their evidentiary value.  For example, paragraph 12 of the declaration provides as follows:

12. The following changes and additions to the first amended complaint in the proposed SAC are as follows:

[…]

(g) The old numbered paragraph 13 is renumbered par. 17 at 6:27, with new paragraphs 13-16 added at 5:7-6:26:

“13. Plaintiffs only discovered in or about August/September 2023, in documents produced by Defendant Moss in response to Plaintiffs’ demand for production of documents that:

(a) the statements made by Defendants as stated in paragraph 12, by Defendants Moss, Owners and Does 1 through 10, inclusive, through Angela Young and other unknown persons at Moss, were not true;

(b) Defendants Moss, Owners and Does 1 through 10, inclusive, through Angela Young and other persons at Moss as set forth herein, covered up and failed to warn Plaintiffs of hazardous conditions of the subject property that they had learned from the third-party vendors, Restoration Management Remediation Services (“RMC”) and Excel; (c) RMC reported to Defendants Moss, Owners and Does 1 through 10, inclusive, through Angela Young, that it had found high moisture content in the kitchen and family room referred to as the “tv room” and the bathroom area adjacent to the kitchen and unless remediated the high moisture content would lead to the growth of heavy concentrations of mold, or in fact contained high levels of mold that was hazardous and injurious to Plaintiffs’ emotional, mental and physical health and well-being.

14. Plaintiffs also learned for the first time through the document production by Moss that on March 20, 2019, Defendants, Moss Management, Owners and Does 1 through 10, Angela Young, Franklin Scotti, Brian Smith, Ronald Maurer and Jared Stones, (“managing agents”) inclusive knew that remediation work in the kitchen area was required, because, RMC, based on its inspection, provided Defendant Owner and Moss, through their managing agents, with an estimate for remediation of the subject property’s kitchen and family area.

15. In said documentation produced by Moss, Plaintiffs discovered that: (a) on March 20, 2019, at 1:32 p.m., Angela Young emailed Brian Smith, “Hi, Ronald and I met with Restoration Management to review the above units, and reported with regard to the subject property: Moisture inspection was performed in 515, We meet (sic) with one of the residents and found moisture readings the (sic) kitchen behind all of the appliances in the kitchen. Also, moisture in the tv room next to the kitchen and in the bathroom that backs up to the kitchen”; (b) on March 20, 2019, at 2:02 p.m., Brian Smith wrote Angela Young in response: “Hi, Angela,. Thank you for the update. We will await the repair proposal for unit #515. Do we know the source of the water/moisture in the kitchen? Please document the results/recommendations provided by Restoration for unit #505”;

(c) at 2:20 p.m., on the same date, Angela Young wrote with respect to the subject property: “Hello, Best guess is the drain backup last week. Resident’s were away a few days and when they came home ‘grey water,’ had overflowed. For those reasons, Restoration suggested, ‘on site,’ that we remove the cabinets, baseboards, etc. ” [reference to 505 Altair omitted];

(d) Brian Smith at Moss, responded to Angela Young’s email, “Ok, let’s ensure we have resolved any issues, prior to clearance and reconstruction.”; and,

(e) on March 20, 2019 at 4:41 p.m., Franklin Scotti at randlinscotti@mosscompany.com, wrote in an email to Brian Smith at briansmith@mosscompany.com, with cc to Angela Young, at angelayoung@mosscompany.com, Ronald Maurer at ronaldmaurer@mosscompany.com and Jared Stones at jstones@rmc.com: “Thank you everyone. I will get with Angela regarding relocation as containment may make the kitchen inaccessible.” A true and correct copy of the March 20, 2019 email chain is attached hereto as Exhibit “2”.

(Keropian Decl. ¶ 12.)

            The declaration paragraph numbers, declaration sub-paragraph letters, proposed SAC paragraph numbers and SAC sub-paragraph letters are all presented at the same indentation level, and the declaration paragraph number (12) and proposed SAC paragraph number (13) are sequential, making it extremely difficult to follow what is a declaration paragraph number or subparagraph letter, versus what is a proposed SAC paragraph number or subparagraph letter.    

Once carefully parsed out, however, it becomes clear that much of the information the Court needs to evaluate the motion has no evidentiary value.  Specifically, because the information in paragraph 13 is characterized only as the proposed allegations Plaintiffs intend to add to the complaint, but not as true facts in their own right, the Court cannot rely on the truth of any of those statements.  In other words, the declaration confirms only that Plaintiffs intend to make those allegations; it does not confirm under penalty of perjury that any of the information in those allegations about what Plaintiffs discovered and when is actually true.

As such, Plaintiffs have failed to provide a declaration that states facts under penalty of perjury about (1) why the amendment is necessary and proper; and (2) when the facts giving rise to the amended allegations were discovered, as Rule 3.1324(b) requires, and which the Court needs to properly analyze the motion for leave.

CONCLUSION AND ORDER

            Therefore, Plaintiffs’ motion for leave to amend the complaint is denied without prejudice on procedural grounds for failure to comply with the requirements of Rule 3.1324(b). 

            Should Plaintiffs choose to file another motion for leave to amend, the Court notes for clarification that Plaintiffs’ obligation to state which allegations are to be added or deleted from the complaint shall be fully satisfied by providing a redlined copy of the proposed amended complaint, and Plaintiffs need not additionally state the proposed changes in the body of the motion or paste them into the body of a declaration.

            The Court orders Plaintiffs to provide notice of the Court’s ruling and file the notice with a proof of service forthwith.

DATED:  September 4, 2024                         ___________________________

                                                                  Michael E. Whitaker

                                                                  Judge of the Superior Court