Judge: Michael E. Whitaker, Case: 23SMCV01851, Date: 2024-07-16 Tentative Ruling

Case Number: 23SMCV01851    Hearing Date: July 16, 2024    Dept: 207

TENTATIVE RULING

MOTION

On April 27, 2023, Plaintiff Ian Herzog (“Plaintiff”) brought suit against Defendants Fidelity National Home Warranty, Inc. dba FNHW; Dameriol L.; and Monet R. (“Defendants”) alleging four causes of action for (1) breach of contract; (2) fraud; (3) intentional infliction of emotional distress; (4) and insurance bad faith. 

Defendant Fidelity National Home Warranty, Inc. dba FNHW (“FNHW”) moves for leave to file a cross-complaint against Plaintiff for declaratory relief.  Plaintiff opposes the motion and FNHW replies.

LEGAL STANDARD

A party against whom a cause of action has been asserted in a complaint or cross-complaint may file a cross-complaint setting forth either or both of the following:

(a)   Any cause of action he has against any of the parties who filed the complaint or cross-complaint against him. Nothing in this subdivision authorizes the filing of a cross-complaint against the plaintiff in an action commenced under Title 7 (commencing with Section 1230.010) of Part 3.

(b)   Any cause of action he has against a person alleged to be liable thereon, whether or not such person is already a party to the action, if the cause of action asserted in his cross-complaint (1) arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause brought against him or (2) asserts a claim, right, or interest in the property or controversy which is the subject of the cause brought against him.

(Code Civ. Proc., § 428.10, subds. (a)-(b).) 

(a)   A party shall file a cross-complaint against any of the parties who filed the complaint or cross-complaint against him or her before or at the same time as the answer to the complaint or cross-complaint.

(b)   Any other cross-complaint may be filed at any time before the court has set a date for trial.

(c)   A party shall obtain leave of court to file any cross-complaint except one filed within the time specified in subdivision (a) or (b). Leave may be granted in the interest of justice at any time during the course of the action.

(Code Civ. Proc., § 428.50, subds. (a)-(c).) 

Indeed, where a cause of action would otherwise be lost, leave to amend is appropriate even if the party was negligent in not moving for leave to amend earlier.  “The legislative mandate is clear.  A policy of liberal construction of section 426.50 to avoid forfeiture of causes of action is imposed on the trial court.  A motion to file a cross-complaint at any time during the course of the action must be granted unless bad faith of the moving party is demonstrated where forfeiture would otherwise result.”  (Silver Organizations, Ltd. v. Frank (1990) 217 Cal.App.3d 94, 98-99.)   Further, “Cross-complaints for comparative equitable indemnity would appear virtually always¿transactionally¿related to the main action.”¿¿(Time for Living, Inc. v. Guy Hatfield Homes¿(1991) 230 Cal.App.3d 30, 38; see also Countrywide Home Loans, Inc. v. Superior Court (1999) 69 Cal.App.4th 785, 799 [“Undoubtedly, a claim for contribution or indemnity ‘arises out of’ the same transaction or occurrence as the plaintiff's claim”].)¿

DISCUSSION

            FNHW seeks leave to file a cross-complaint against Plaintiff for declaratory relief that the parties’ contract limits FNHW’s liability to Plaintiff to a maximum of $1500.  Plaintiff opposes the motion on the grounds that declaratory relief is not available where, as here, Plaintiff’s cause of action for breach of contract has already matured. 

            However, the Court does not generally consider the merits of the proposed pleading in determining whether to grant leave.  Instead, the Court implements the legislative mandate to liberally construe requests for leave to avoid forfeiture of causes of action.  To the extent Plaintiff takes issue with the proposed cross-complaint, Plaintiff may raise those by appropriate motion.  (See Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048 [“the preferable practice would be to permit the amendment and allow the parties to test its legal sufficiency by demurrer, motion for judgment on the pleadings or other appropriate proceedings”].)

CONCLUSION AND ORDER

            For these reasons, the Court grants FNHW’s motion for leave to file a cross-complaint, and orders FNHW to file and serve the proposed cross-complaint on or before July 30, 2024.

            Further, the Court orders FNHW to provide notice of the Court’s ruling and file the notice with a proof of service forthwith.

DATED:  July 16, 2024                                  ___________________________

                                                                  Michael E. Whitaker

                                                                  Judge of the Superior Court