Judge: Michael P. Linfield, Case: 22STCV31263, Date: 2023-08-09 Tentative Ruling
Case Number: 22STCV31263 Hearing Date: February 13, 2024 Dept: 34
SUBJECT: Motion: (1)
For Leave to File a First Amended Complaint; (2) To Add Defendant Parties; and
(3) A Continuance of Trial
Moving Party: In
Hospitality, LLC
Resp. Party: Launch With Us, LLC, Mike Lee, and Jody
Hiramoto
The Motion is GRANTED. In
Hospitality, LLC is granted 7 days leave to file its proposed amended pleading.
BACKGROUND:
On September
26, 2022, In Hospitality LLC filed its Complaint against Launch With Us, LLC, Mike
Lee, and Jody Hiramoto (erroneously sued as Jody Hashimoto) on various causes
of action arising from the Parties’ contractual relationship(s).
On December
5, 2022, Launch With Us, LLC, Mike Lee, and Jody Hiramoto filed their Answer to
the Complaint.
Also on
December 5, 2022, Launch With Us, LLC filed its Cross-Complaint against In
Hospitality LLC, Dong Hyuk Lee, Jeff Jun, and Kevin Minsoo Son.
On April 7,
2023, Launch With Us, LLC filed its First Amended Cross-Complaint.
On May 16, 2023, Launch With Us, LLC filed its Second Amended Cross-Complaint
(SACC).
On January 29, 2024, In
Hospitality, LLC filed Motion: (1)
For Leave to File a First Amended Complaint; (2) To Add Defendant Parties; and
(3) A Continuance of Trial. In support of its Motion, In Hospitality, LLC
concurrently filed: (1) Declaration of Steven Han; and (2) Proposed Order.
On February 5, 2024, Launch With Us, LLC, Mike Lee, and Jody Hiramoto filed their
Opposition.
On February 7, 2024, In Hospitality, LLC
filed its Reply.
ANALYSIS:
I.
Legal
Standard
“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.)
II.
Discussion
A. The Parties’ Arguments
In Hospitality, LLC moves the Court to:
(1) grant leave for In Hospitality, LLC to file its proposed First Amended
Complaint (FAC), which would include the additional of new defendants to this
matter; and (2) continue trial by ninety days. (Motion, p. 2:3–8, 2:14–15.) In
Hospitality, LLC argues: (1) that good cause exists to allow Plaintiff leave to
amend; (2) that there is no prejudice to any party; (3) that a continuance of
trial for ninety days is appropriate; and (4) that Plaintiff was diligent in
bringing the Motion. (Id. at pp. 5:22, 7:11, 8:8, 8:19.)
Launch With Us, LLC, Mike Lee, and Jody
Hiramoto disagree, arguing: (1) that In Hospitality, LLC has not complied with
California Rules of Court, rule 3.1324; (2) that granting the Motion will
prejudice the non-moving parties; (3) that In Hospitality, LLC has alternate
means to pursue the claims and parties contemplated in the Motion; and (4) that
on balancing the interests, the Court should deny the Motion. (Opposition, pp.
5:2, 5:8, 5:20–21, 6:3–4.)
In its Reply, In Hospitality, LLC argues:
(1) that it was diligent in bringing the Motion, the necessity of which was
caused by non-moving parties’ conduct; (2) that non-moving parties cannot argue
prejudice when the delay is due to their own misconduct; and (3) that multiple
lawsuits are neither proper nor appropriate in this instance. (Reply, pp.
2:6–7, 3:8–9, 4:7.)
B.
California Rules of Court, Rule 3.1324
In Hospitality, LLC substantially complied
with California Rules of Court, rule 3.1324.
First, its
counsel submitted a copy of the proposed amended pleading. (Decl. Han, Exh. 6.)
Second, its
counsel submitted a red-lined version of the proposed amended pleading, which shows
exactly where additions and deletions would be made. (Decl. Han, Exh. 7.)
Finally, although the declaration could have
been clearer, its counsel sufficiently declares: (1) that the effects of the
proposed amendments would be to add to the pleading additional allegations, a
cause of action for fraudulent conveyance, and new defendants; (2) that the
proposed amendments are necessary and proper because they involve a transfer of
ownership and/or possession of In Hospitality’s furniture, fixtures, and equipment;
(3) that the facts giving rise to the proposed amendments arose during
discovery and that on December 15, 2023, a dispute between the Parties occurred
as to the transfer of this personal property; and (4) that the reason the
request for the proposed amendments was not made sooner was that non-moving
parties declined on January 9, 2024 to stipulate to this amendment. (Decl. Han,
¶¶ 3–6.)
C.
Prejudice
Trial is scheduled for March 4, 2024. Given
the proximity of this date and the relief requested, the Court is concerned
about the risk of prejudice to both the parties and the non-parties.
On the one hand, In Hospitality, LLC might be
at risk of losing compulsory claims should it not be allowed to amend its
pleading. Furthermore, if actions were wrongfully taken during the course of
the litigation to change possession of In Hospitality, LLC’s property, it would
severely In Hospitality, LLC by making it more difficult and time consuming for
it to regain its property.
On the other hand, adding new defendants
within thirty days of trial would present those new defendants with an extreme
risk of prejudice as they would essentially be precluded from engaging in
discovery or having adequate time to prepare for trial. Similarly, adding a new
claim with allegations of new conduct would pose a significant risk of
prejudice to the existing defendants.
Given the significant
risks of prejudice discussed above, it would be appropriate here to grant leave
to amend and to continue trial.
In coming to this
conclusion, the Court is also aware that it is Plaintiff who asks to add new
parties and continue the trial. Plaintiff
filed this action, and presumably would like to see it concluded as soon as possible.
III. Conclusion
The Motion is GRANTED. In
Hospitality, LLC is granted seven (7) days leave to file its proposed amended
pleading.
The Court will discuss with
counsel the dates for the continued FSC and trial.