Judge: Michael Shultz, Case: 22CMCV00214, Date: 2023-04-25 Tentative Ruling
Case Number: 22CMCV00214 Hearing Date: April 25, 2023 Dept: A
22CMCV00214 Santander Consumer USA, Inc. v.
Meifang Yao, et al.
[TENTATIVE]
ORDER GRANTING MOTION FOR LEAVE TO FILE A CROSS-COMPLAINT BY DEFENDANT, FCC
LOGISTICS, INC.
I.
FACTS AND PROCEDURAL BACKGROUND
The complaint, filed on January 8,
2022, alleges that Defendant, Meifang Yao (“Yao”), purchased a vehicle from
Plaintiff’s assignor pursuant to a written contract. Plaintiff, Santander
Consumer USA Inc., dba Chrysler Capital (“Santander”), now has legal title to
the vehicle because Yao failed to make required lease payments. Defendant Yao
transferred possession of the vehicle to Defendants, Tan-Ing Chou, and FCC
Logistics, Inc (“FCC”). Plaintiff alleges claims for claim and delivery of
personal property and for a writ of possession, conversion, quiet title, and
declaratory relief. Defendant FCC filed its answer on October 20, 2022.
II.
ARGUMENTS
Defendant FCC requests leave to file
a cross-complaint against Plaintiff Santander and Defendant Yao for fraud,
breach of contract, and unjust enrichment. Defendant argues that the
cross-complaint arises from the same facts alleged in the complaint. FCC
contends it had the right to conduct a private auction of the vehicle to
recover its storage fees before, however, the Court granted Plaintiff’s
application for a writ of possession which foreclosed FCC’s statutory rights.
Plaintiff argues that the motion is
untimely because FCC was required to file the related cross-complaint at the
time it filed its answer. FCC had over 19 months to seek leave to file a
cross-complaint. Trial is now set for September 25, 2023. Plaintiff would
suffer prejudice if the Court grants the motion as it has been focused only on
its right to possession. Alternatively, Plaintiff asks for a continuance of
trial.
In reply, FCC argues that the
Court’s order granting Plaintiff’s writ of possession eliminated FCC’s
statutory right to sell the vehicle by auction. Plaintiff did not address this
argument. No prejudice will occur since no discovery has taken place.
III.
DISCUSSION
A party against
whom a cause of action has been asserted in a complaint may file a
cross-complaint setting forth either a cause of action against any of the
parties who filed the complaint, or any cause of action he has against a person
alleged to be liable, whether or not such person is already a party. (Code Civ. Proc., § 428.10 (b).)
Contrary to Plaintiff’s
argument, the proposed cross-complaint is compulsory because it asserts claims that
arise from the same transaction or occurrence, or series of transactions or
occurrences alleged in the complaint. (Code Civ. Proc., § 426.10.) However,
a defendant who fails to file a cross-complaint “whether through oversight,
inadvertence, mistake, neglect, or other cause” may request an order for leave
to file a cross-complaint which may be granted so long as the moving party
acted in good faith. The statute is liberally construed to avoid forfeiture. (Code Civ. Proc., § 426.50.)
Plaintiff has not
shown that FCC has acted in bad faith. Once the Court granted a writ of
possession in Plaintiff’s favor, FCC could no longer exercise its right to sell
the vehicle in its possession to satisfy its lien for storage fees. (Com. Code, § 7209, § 7210.)
The proposed cross-complaint asserts one cause of action against Plaintiff for
unjust enrichment and claims for fraud and breach of contract against Defendant
Yao. To the extent Plaintiff requires a continuance of trial, Plaintiff can
make a motion showing good cause pursuant to California Rules of Court,
Rule 3.1332.
IV.
CONCLUSION
Based on the foregoing, Defendant’s
Motion for Leave to File a Cross-complaint is GRANTED. Defendant is ordered to file and serve its
cross-complaint forthwith.