Judge: Michael P. Linfield, Case: 22STCV10347, Date: 2023-03-16 Tentative Ruling

Case Number: 22STCV10347    Hearing Date: March 16, 2023    Dept: 34

SUBJECT:         Motion for Leave to Amend First Amended Cross-Complaint

Moving Party:  Defendants/Cross-Complainants Gloria Shulman Hughes and John E. Hughes, Jr.

Resp. Party:    Cross-Defendants Living the Dream and Shalom Shay Gozlan

Defendants/Cross-Complainant’s Motion for Leave to Amend First Amended Cross-Complaint is GRANTED.

BACKGROUND:

On March 24, 2022, Plaintiff Living the Dream filed its Complaint against Defendants Gloria Shulman Hughes and John E. Hughes, Jr. on causes of action regarding a dispute over real property.

On March 25, 2022, Plaintiff filed its Lis Pendens on the real property at issue in this matter.

On June 13, 2022, Plaintiff filed its First Amended Complaint against Defendants on the following causes of action:

(1)       Declaratory relief;

(2)       Breach of the implied covenant of good faith and fair dealing;

(3)       Promissory fraud; and

(4)       Intentional interference with prospective economic advantage.

On September 21, 2022, Defendants/Cross-Complainants Gloria Shulman Hughes and John E. Hughes, Jr. filed their Answer and their Cross-Complaint against Plaintiff/Cross-Defendant Living the Dream.

On October 10, 2022, Defendants/Cross-Complainants filed their First Amended Cross-Complaint against Cross-Defendants Living the Dream, California Numbered Company 4009746, Applied Plant Science, and Shalom Gozlan on the following causes of action:

(1)       Breach of lease;

(2)       Declaratory judgment;

(3)       Conversion;

(4)       Negligence;

(5)       Negligence per se;

(6)       Intentional misrepresentation;

(7)       Negligent misrepresentation;

(8)       Intentional interference with prospective economic advantage; and

(9)       Common counts.

On February 1, 2023, the Court sustained Cross-Defendant’s Demurrer to the second, fifth, and eighth causes of action in the First Amended Cross-Complaint, without leave to amend. The Court also granted Cross-Defendant’s Motion to Strike and struck certain items from the Cross-Complaint.

On February 17, 2023, Defendants/Cross-Complainants filed their Motion for Leave to Amended First Amended Cross-Complaint.

On March 3, 2023, Cross-Defendants Living the Dream and Shalom Shay Gozlan (“Cross-Defendants”) filed their Opposition. Cross-Defendants concurrently filed: (1) Request for Judicial Notice; and (2) Proof of Service.

On March 9, 2023, Defendants/Cross-Complainants filed their Reply.

ANALYSIS:

I.           Request for Judicial Notice

In their Request for Judicial Notice, Cross-Defendants request that the Court take judicial notice of the following item: the “Unlawful Detainer Complaint” filed with the court as Case Number 22STCV19824.

Judicial notice is denied as irrelevant. “Although a court may judicially notice a variety of matters (Evid. Code, § 450 et seq.), only relevant material may be noticed” (Am. Cemwood Corp. v. Am. Home Assurance Co. (2001) 87 Cal.App.4th 431, 441, fn. 7.) 

II.        Legal Standard

The court may, in furtherance of justice and on any proper terms, allow a party to amend any pleading. (Code Civ. Proc., § 473, subd. (a)(1); Branick v. Downey Savings & Loan Association (2006) 39 Cal.4th 235, 242.)

The court may also, in its discretion and 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. (Code Civ. Proc., § 473, subd. (a); Branick, supra, 39 Cal.4th at 242.)

“This discretion should be exercised liberally in favor of amendments, for judicial policy favors resolution of all disputed matters in the same lawsuit.” (Kittredge Sports Co. v. Super. Ct. (1989) 213 Cal.App.3d 1045, 1047.) Leave to amend is thus liberally granted, provided there is no statute of limitations concern. (Kolani v. Gluska (1998) 64 Cal.App.4th 402, 411.) The Court may deny the plaintiff’s leave to amend if there is prejudice to the opposing party, such as delay in trial, loss of critical evidence, or added costs of preparation. (Id.)

Under California Rules of Court, rule 3.1324, a motion to amend a pleading before trial must (1) include a copy of the proposed amendment or amended pleading, 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.  (Cal. Rules of Court, rule 3.1324(a).)  A separate supporting declaration specifying (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 reason why the request for amendment was not made earlier must accompany the motion. (Id., rule 3.1324(b).)

III.     Discussion

A.      Rules of Court

Defendants/Cross-Complainants complied with California Rules of Court, rule 3.1324.

First, Defendants/Cross-Complainants submitted a copy of the proposed amended pleading (Motion, Ex. 2).

Second, Exhibit 2 is a red-lined version of the proposed Second Amended Cross-Complaint, which shows exactly all the items that would be deleted and added, as well as exactly where those deletions and additions are located.

Finally, Defendants/Cross-Complainants submitted a separate supporting declaration from Robert D. Goldberg that describes the effect of the amendment (to add new causes of action, new allegations, and new remedies), why the amendment is necessary and proper (to allow for an adjudication on the merits of all liability and damages questions for this case), when the facts giving rise to the amendments were discovered (it is not clear whether new facts were discovered, but Counsel Goldberg declares that he has come to better understand the facts and circumstances in this case over the course of the litigation), and the reason why the request for amendment was not made earlier (because Counsel Goldberg has come to better understand the case over the course of the litigation) (Motion, Decl. Goldberg, ¶¶ 5–8.)

B.      Prejudice

Cross-Defendants oppose the Motion, although they do not argue that there would be prejudice to Cross-Defendants were the Court to grant leave. Rather, Cross-Defendants argue: (1) that there has been a failure to comply with California Rules of Court, rule 3.1324; and (2) that the claims Defendants/Cross-Complainants seek leave to allege are futile. (Opposition, p. 3:2–3, 4:1.) Cross-Defendants reserve their right to challenge the Second Amended Cross-Complaint should the Court allow the second amendment. (Id. at 5:5–6.)

The Court disagrees with Cross-Defendants’ arguments. The Motion complies with California Rules of Court, rule 3.1324. In addition, it is not the Court’s role to consider the final merits of the proposed amendments when considering whether there is good cause to allow the amendments. Absent statute of limitation concerns, leave to amend is liberally granted. (Kolani, supra, at 411.)

As Trial is one year away, there appears to be minimal prejudice to Cross-Defendants if leave were granted. The Court finds good cause for allowing the amendment.

IV.       Conclusion

Defendants/Cross-Complainant’s Motion for Leave to Amend First Amended Cross-Complaint is GRANTED.