Judge Michael P. Linfield, Case Number: 22STCV23144, Date: 2023-08-08 Tentative Ruling

Judge: Michael P. Linfield, Case: 22STCV23144, Date: 2023-08-08 Tentative Ruling

SUBJECT: Motion for Leave to File First Amended Answer and to Continue Trial

Moving Party: Defendants American Fertility Medical Center Corporation, AFMC Diamond Lab, and Xiyue Luo

On July 19, 2022, Plaintiff Tsung-Chieh Jackson Wu filed his Complaint against Defendants American Fertility Medical Center Corporation, AFMC Diamond Lab, and Xiyue Luo on causes of action arising from Plaintiff’s employment with Defendants.

On September 16, 2022, Defendants American Fertility Medical Center Corporation, AFMC Diamond Lab, and Xiyue Luo filed their Answer to the Complaint.

On July 17, 2023, Defendants American Fertility Medical Center Corporation, AFMC Diamond Lab, and Xiyue Luo filed their Motion for Leave to File First Amended Answer and to Continue Trial (“Motion for Leave to Amend Answer”).

On July 17, 2023, Defendant AFMC Diamond Lab filed its Motion for Leave to File Cross-Complaint and to Continue Trial (“Motion for Leave to File Cross-Complaint”).

On July 26, 2023, Plaintiff filed his Oppositions to the two motions. In support of each of the Opposition, Plaintiff concurrently filed: (1) Declaration of Sarah Cayer (in support of the Opposition); (2) Request for Judicial Notice; (3) Declaration of Sarah Cayer (in support of the Request for Judicial Notice); and (4) Proposed Order. Plaintiff also concurrently filed a Proof of Service for both Oppositions and a Declaration of Tsung-Chieh Jackson Wu only in support of the Motion for Leave to File Cross-Complaint.

On July 27, 2023, Plaintiff filed his Notice of Errata and his Proof of Service.

On August 1, 2023, Defendants American Fertility Medical Center Corporation, AFMC Diamond Lab, and Xiyue Luo filed their Reply regarding the Motion for Leave to Amend Answer. They concurrently filed their Objections to Evidence.

On August 1, 2023, Defendant AFMC Diamond Lab filed its Reply regarding the Motion for Leave to File Cross-Complaint.

As the two motions both request a continuance of trial, the Court separately considers the three requests for relief: (1) leave to amend the Answer; (2) leave to file the proposed Cross-Complaint; and (3) a continuance of Trial.

Defendants filed evidentiary objections to the declarations submitted in support of Plaintiff’s Opposition to the Motion for Leave to Amend Answer. The following are the Court’s rulings to these objections.

Objection
1		OVERRULED
2		OVERRULED

Objection
1		OVERRULED
2		OVERRULED

For both motions, Plaintiff requests that the Court take judicial notice of various profiles of Defense Counsel, which can be found on Defense Counsel’s website and/or on LinkedIn.

For the Motion for Leave to File Cross-Complaint, Plaintiff also requests that the Court take judicial notice of Defendant American Fertility Medical Center Corporation’s Statement of Information, filed with the California Secretary of State on March 9, 2023.

The Court DENIES as irrelevant judicial notice to all of these items. “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, quotation omitted, italics in original.)

“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.” (Code Civ. Proc., § 473, subd. (a)(1).)

“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.” (Code Civ. Proc., § 576.)

“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 declaration must accompany the motion and must specify: (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.” (Cal. Rules of Court, rule 3.1324(b).)

“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.)¿¿

Defendants move the Court for leave to file their proposed First Amended Answer. (Motion for Leave to Amend Answer, p. 10:8–9.) Defendants argue that leave to amend should be allowed here. (Id. at p. 6:13.)

Plaintiff disagrees, arguing: (1) that Defendants cannot justify their delay in filing this motion; (2) that Defendants erroneously rely on distinguishable cases; (3) that Defendants’ delay in bringing this motion poses substantial prejudice to Plaintiff; and (4) that Defendants’ moving papers fail to comply with the California Rules of Court. (Opposition to Motion for Leave to Amend Answer, pp. 6:24, 7:22–23, 8:17, 9:25.)

In their Reply, Defendants argue: (1) that Plaintiff will not be prejudiced by the proposed amendments; (2) that the proposed amendment must be allowed because Plaintiff will not be prejudiced by it; (3) that any purported delay in making this motion is not grounds to deny the motion because there is no prejudice to Plaintiff by the proposed amendment; and (4) that the motion complies with California Rules of Court, rule 3.1324. (Reply regarding Motion for Leave to Amend Answer, pp. 2:16–17, 5:21–22, 8:23.)

First, Defendants submitted a copy of the proposed amended pleading, which is serially numbered to differentiate it from the original pleading. (Motion for Leave to Amend Answer, Exh. 1.)

Second, Defendants listed all the affirmative defenses that would be added, and they included a blue-lined copy of the amended pleading that shows exactly where all the additions would be located. (Motion for Leave to Amend Answer, Exh. 2.)

Finally, Defendants describe the effect of the amendment (to add affirmative defenses to their pleading), why the amendment is necessary and proper (because the affirmative defenses are related to Plaintiff’s claims and would allow Defendants to litigate the merits of those claims), when the facts giving rise to the amendments were discovered (when Defendants changed counsel), and why the amendment was not made earlier (Defendants’ prior counsel was not able to communicate in Chinese). (Motion for Leave to Amend Answer, Decl. Ho, ¶¶ 5–8.)

Statutes and case law have clearly and repeatedly indicated the Courts have wide latitude in this area, and have upheld a Court granting leave to amend answers during a motion for summary judgment and even after commencement of trial. (Code Civ. Proc., §§ 473, subd. (a)(1) and 576; see also Eng v. Brown (2018) 21 Cal.App.5th 675, 700–02; see also Cruey v. Gannett Co. (1998) 64 Cal.App.4th 356, 367; see also Gardenswartz v. Equitable Life Assurance Soc. (1937) 23 Cal.App.2d Supp. 745, 752–53.)

Here, Trial is more than three months away. Thus, there is no issue with timeliness.

There would be minimal prejudice to Plaintiff by allowing Defendants to assert their affirmative defenses. As stated above, Trial is more than three months away. Plaintiff will have adequate time to prepare.

It would be in the interests of justice to allow Defendants to amend their Answer to include their affirmative defenses.

“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.” (Code Civ. Proc., § 428.50, subd. (a).)

“Any other cross-complaint may be filed at any time before the court has set a date for trial.” (Code Civ. Proc., § 428.50, subd. (b).)

“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, subd. (c).)

“A party who fails to plead a cause of action subject to the requirements of this article, whether through oversight, inadvertence, mistake, neglect, or other cause, may apply to the court for leave to amend his pleading, or to file a cross-complaint, to assert such cause at any time during the course of the action. The court, after notice to the adverse party, shall grant, upon such terms as may be just to the parties, leave to amend the pleading, or to file the cross-complaint, to assert such cause if the party who failed to plead the cause acted in good faith. This subdivision shall be liberally construed to avoid forfeiture of causes of action.” (Code Civ. Proc., § 426.50.)

Defendant AFMC Diamond Lab moves the Court for leave to file its proposed Cross-Complaint. (Motion for Leave to File Cross-Complaint, p. 11:2–3.) Defendant AFMC Diamond Lab argues: (1) that Defendant’s claims are compulsory; (2) that Defendant is acting in good faith; and (3) that leave to file the proposed Cross-Complaint must be granted because Defendant’s claims are compulsory and Defendant is acting in good faith. (Id. at p. 5:13–14.)

Plaintiff disagrees, arguing that Defendant AFMC Diamond Lab is bringing this motion as a bad faith, dilatory tactic. (Opposition to Motion for Leave to File Cross-Complaint, p. 7:16.)

Defendant AFMC Diamond Lab argues that none of the conduct Plaintiff discusses is bad faith conduct. (Reply, 2:11–12.)

In his Complaint, Plaintiff pleads five causes of action against Defendants: (1) breach of contract; (2) violation of Labor Code section 203; (3) age discrimination; (4) failure to prevent discrimination; and (5) violation of Labor Code section 1102.5.

In its proposed Cross-Complaint, Defendant AFMC Diamond Lab wishes to plead seven causes of action against Plaintiff: (1) fraud; (2) negligent misrepresentation; (3) rescission; (4) breach of contract; (5) breach of the implied covenant of good faith and fair dealing; (6) money paid or lent, and/or money had and received; and (7) unjust enrichment.

All of the causes of action arise from the same transactions, occurrences, or series of transactions: Plaintiff’s employment with Defendants, including the occurrences and transactions that led to Plaintiff’s hiring, Plaintiff’s pay while working, and Plaintiff’s termination.

Therefore, the proposed Cross-Complaint is compulsory (i.e., Defendant will lose its ability to sue on these causes of action if it does not file a cross-complaint). (Code Civ. Proc., §§ 426.10, 426.30, subd. (a).)

Given the compulsory nature of the proposed Cross-Complaint, it would be highly prejudicial to Defendant AFMC Diamond Lab for the Court to deny it leave to file its proposed Cross-Complaint.

On the other hand, it would only be minimally prejudicial to Plaintiff to grant such leave. As previously stated, Trial is more than three months away. Plaintiff will have sufficient time to challenge Defendant’s pleading should Plaintiff so choose.

The Motion for Leave to File Cross-Complaint is GRANTED. The Cross-Complaint is to be filed and served within 5 days.

Pursuant to California Rules of Court Rule 3.1332(b), “[a] party seeking a continuance of the date set for trial, whether contested or uncontested or stipulated to by the parties, must make the request for a continuance by a noticed motion or an ex parte application under the rules in chapter 4 of this division, with supporting declarations. The party must make the motion or application as soon as reasonably practical once the necessity for the continuance is discovered.”

“Although continuances of trials are disfavored, each request for a continuance must be considered on its own merits. The court may grant a continuance only on an affirmative showing of good cause requiring the continuance.” (Cal. Rules of Court, Rule 3.1332(c); See also In re Marriage of Falcone (2008) 164 Cal.App.4th 814, 823

(“Continuances are granted only on an affirmative showing of good cause requiring a continuance.”).)

Rule 3.1332(c) indicates that circumstances that may indicate good cause include “the unavailability of trial counsel because of death, illness, or other excusable circumstances,” “[a] party's excused inability to obtain essential testimony, documents, or other material evidence despite diligent efforts,” and “[a] significant, unanticipated change in the status of the case a result of which the case is not ready for trial.”

Other factors to consider under California Rules of Court, Rule 3.1332(d) include:

(2) Whether there was any previous continuance, extension of time, or delay of trial due to any party;

(4) The availability of alternative means to address the problem that gave rise to the motion or application for a continuance;

(5) The prejudice that parties or witnesses will suffer as a result of the continuance;

reasons for that status and whether the need for a continuance outweighs the need to avoid delay;

(7) The court's calendar and the impact of granting a continuance on other pending trials;

(10) Whether the interests of justice are best served by a continuance, by the trial of the matter, or by imposing conditions on the continuance; and

(11) Any other fact or circumstance relevant to the fair determination of the motion or application.

Defendants move for a three-month continuance of Trial so that the Parties can conduct discovery and obtain evidence. (Motion for Leave to Amend Answer, p. 8:8–9; Motion for Leave to File Cross-Complaint, p. 9:1–2.)

Plaintiff disagrees, arguing there is no good cause here for a continuance of Trial. (Opposition to Motion for Leave to Amend Answer, p. 10:25–26; Opposition to Motion for Leave to File Cross-Complaint, p. 11:1–2.)

This case was filed more than a year ago. Defendants could have requested to amend their answer or file a cross-complaint at any time during the past year. They are only now requesting leave to do so.

Since the Court is allowing the amendment to the answer and allowing Defendant AFMC Diamond Lab to file a cross-complaint, Plaintiff is the party that might be prejudiced by not delaying the case. Apparently hueing to the adage, “justice delayed is justice denied,” Plaintiff does not wish to continue the trial. Rather, Plaintiff has taken the position that “even if the Court grants Defendants leave to file a Cross-Complaint, there is no good cause for continuance of the trial.” (Opposition, p. 11:1-2.)