Judge: Michael Shultz, Case: 22CMCV00416, Date: 2023-04-04 Tentative Ruling

INSTRUCTIONS: If the parties wish to submit on the tentative ruling and avoid a court appearance on the matter, the moving party must:

1. Contact the opposing party and all other parties who have appeared in the action and confirm that each will submit on the tentative ruling.

2. No later than 4:00 p.m. on the court day before the hearing, call the Courtroom (310-761-4302) advising that all parties will submit on the tentative ruling and waive hearing; and

3. Serve notice of the Court's ruling on all parties entitled to receive service.

If this procedure is followed, when the case is called the Court will enter its ruling on the motion in accordance with its tentative ruling. If any party declines to submit on the tentative ruling, then no telephone call is necessary, and all parties should appear at the hearing. If there is neither a telephone call nor an appearance, then the matter may either be taken off calendar or ruled on. 

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Case Number: 22CMCV00416    Hearing Date: April 4, 2023    Dept: A

22CMCV00416 Avelina Boltiador Wiley v. State Bridge Company, LLC, et al.

Tuesday, April 4,  2023, at 8:30 a.m.

[TENTATIVE] ORDER GRANTING MOTION FOR LEAVE TO FILE A CROSS-COMPLAINT

I.        Facts and Procedural Background

            The complaint alleges that a fraudulent deed of trust was recorded on Plaintiff’s property to secure a loan although a promissory note was not included. Defendants allegedly filed a Notice of Default claiming to be successors and legitimate holders of the deed of trust. Plaintiff alleges claims for fraud, cancellation of instruments, wrongful foreclosure, and unfair business practices. Defendants, Statebridge Company, LLC and Wilmington Savings Fund Society, FSB, filed their answer on December 19, 2022.

II.      ARGUMENTS

            Defendants request an order for leave to file a cross-complaint against Plaintiff for contract-related claims and common counts. The claims all arise from the same facts that form the basis of Plaintiff’s complaint. Defendants could not file the cross-complaint at the time of its answer because of Plaintiff’s pending bankruptcy action. Defendants have since obtained an order from the bankruptcy court for relief from stay.

            Plaintiff filed a late opposition on March 29, 2023, contending that Defendants failed to establish that they have standing to file the cross-complaint based on documentary evidence submitted as Exhibits A through Q. Defendants object to the late filing and ask the Court not to consider it.

III.    DISCUSSION

            Plaintiff’s opposition was due on March 21, 2023, nine court days before the hearing date. Code Civ. Proc., § 1005 subd. (b). Although the opposition was untimely filed on March, 29, 2023, the court has discretion to consider late papers in favor of the strong policy favoring disposition of the case on the merits. (Kapitanski v. Von’s (1983) 146 Cal.App.3d 29, 32. [“Judges are well aware of the unnecessary burdens placed on courts and counsel when strict compliance with local procedural rules results in the expenditure of unnecessary time and money for the preparation of later section 473 motions.”]).

            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)). Leave to file or amend a cross-complaint 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’s opposition disputes the facts alleged in the cross-complaint, however, these arguments are more appropriate for a motion for summary judgment or adjudication. The proposed cross-complaint is compulsory as it arises from the same facts alleged in the complaint. The Court must grant leave to file a compulsory cross-complaint unless bad faith is demonstrated. (Silver Orgs. v. Frank (1990) 265 Cal.Rptr. 681).

            Here, Defendants were constrained by the automatic stay resulting from Plaintiff’s Chapter 13 petition for bankruptcy protection filed on January 18, 2022. (Mot. Ex. 1). Defendants obtained an order granting their motion for relief from the automatic stay on February 1, 2023. (Mot. Ex. 2). Accordingly, Defendants’ motion is GRANTED.