Judge: Michael Shultz, Case: 23STCV11470, Date: 2025-04-18 Tentative Ruling
Case Number: 23STCV11470 Hearing Date: April 18, 2025 Dept: 40
23STCV11470
Green Commuter, Inc. v. GreenPower Motor Company, Inc., et al.
Friday,
April 18, 2025
FINAL [TENTATIVE]
ORDER
I.
BACKGROUND
Plaintiff
in this case is Green Commuter, Inc, an electric vehicle ride-sharing company.
Defendants are GreenPower Motor Company, Inc., an Electric Vehicle manufacturer,
and San Joaquin Valley Equipment Leasing, Inc., a subsidiary of GreenPower that
leases vehicles on their behalf. Plaintiff alleges that Defendants breached
multiple contracts when Defendants failed to deliver 10 electric vehicles (EVs),
repossessed 18 EVs, refused orders and denied service to 21 EVs, and refused to
deliver 29 EVs to Plaintiff’s customers.
The
original complaint in this case was filed on May 22, 2023. The close of
discovery is on April 21, 2025, and the jury trial is scheduled for May 21,
2025.
On March
20, 2025, Defendants filed a Motion for Leave to File Cross-Complaint. The
Cross-Complaint alleges that Plaintiff and others schemed to defraud Defendants
as well as the State of California by purchasing $105,000 vehicles with $120,000
EV vouchers.
II.
ARGUMENTS
A.
Motion filed March 20, 2025.
Defendants
GreenPower Motor Company, Inc. and San Joaquin Valley Equipment Leasing Inc.
filed this Motion for Leave to File Cross-Complaint. Defendants argue that
their cross-complaint arises out of the same transaction or occurrence as the
primary action in this case, and that they acted in good faith when they filed
this delayed Cross-Complaint.
B.
Opposition filed April 7, 2025.
Plaintiff
opposes this motion. They argue that Defendants are attempting to delay the
upcoming trial for this case by filing their Cross-Complaint just one month
before trial.
III.
LEGAL STANDARDS
Pursuant
to Code of Civil Procedure section 428.50, subdivision (a), “[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.” Pursuant to Code of Civil Procedure section
428.50, subdivision (b), “[a]ny other cross-complaint may be filed at any time
before the court has set a date for trial.” Pursuant to Code of Civil Procedure
section 428.50, subdivision (c), “[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.”
Under Code
of Civil Procedure § 426.50, “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.”.
IV.
DISCUSSION
Defendants’ Motion for Leave to File Cross-Complaint
fails to establish that Defendants acted in good faith. The motion comes too
close to the trial date in this action, the Defendants have previously been
sanctioned for repeated delays, and Defendants provide no factual justification
for their late submission. Additionally, four of Defendants’ five alleged
causes of action are not compulsory cross-claims, so they will not be
forfeited.
1)
The Impending
Trial Date
Defendants’ motion comes late in the
lifecycle of this case. The fact discovery cutoff for the primary action is
April 21, 2025, just one court day after the hearing on this motion. (Opp. p.
1:25-26.) Furthermore, the jury trial is set for May 21, 2025, a little over
one month from now. (Opp. p. 1:25-26.) California Courts have routinely held motions
for leave to file cross-complaints in bad faith when their submissions are
close to the trial date. (See Gherman
v. Colburn (1977) 72 Cal. App. 3d
544, 560 [holding that attempting to file a cross-complaint on the first day of
trial, moving party had not acted in good faith]; see also, Balding v. D. B. Stutsman, Inc. (1966), 246 Cal. App. 2d 559, 563 [where the
appellate court affirmed the trial court’s denial of a motion to file a
cross-complaint, where the motion was noticed for hearing only two weeks before
the scheduled trial date].)
The Cross-Complaint contains multiple
allegations of fraud against both Plaintiff and new parties. This would necessitate
more discovery, re-deposing of previous witnesses, and certainly a continuation
of the trial. Such a delay would not be in the interest of justice. x
2)
Previous
Delays
As Plaintiff points out in their
Opposition, Defendants have already been sanctioned by this Court for delays in
the discovery process. On April 3, 2024, this Court compelled discovery and
imposed $3,331.64 in sanctions, stating that, “Defendant San Joaquin Valley
Equipment Leasing, Inc. is ORDERED to serve Code-compliant responses ... in
relation to Requests for Production of Documents, Set One, Nos. 1–40, within 21
calendar days of this order.” (April 3, 2024, Order, p. 9.) Defendants ignored
this order. On July 17, 2024, this Court found: “Defendant is in clear
violation of the April 3, 2024, order because such payment was due no later
than April 24, 2024.” (July 17, 2024, Order, p. 7 of 9.) As a result of Defendants’
behavior, this Court explicitly set an OSC for August 7, 2024, to ensure that
Defendants and their counsel would timely comply.
In the broad scope of a years-long court
case, sanctions and an order to show cause due to discovery delays do not in
any way prove a party is acting in bad faith. However, they do highlight a pattern
of behavior that, combined with this late motion, suggests to this Court that
Defendants might be engaging in stall tactics.
3)
No
Facts to Justify Late Filing
Defendants’ excuse for their delay is not
persuasive. Defendants explain:
“[a]t the time they filed their [initial] answer,
Defendants did not have evidence to support their suspicions that Plaintiff and
its affiliated parties had coordinated with CARB to alter evidence against
Defendants. Defendants also did not have evidence at the time that CARB
officials were engaging in conduct that appeared to be designed to stall or
prevent Defendants’ efforts to generate business under the HVIP program with
new customers. Defendants believe they can develop evidence to show that these
recent actions by CARB were motivated at least in part by its communications
with Plaintiff and the proposed new parties.” (Motion for Leave, p. 6:12-18.)
Defendants fail to offer any specifics about
how or why they suddenly believe they can establish evidence of fraud or collusion.
Defendants do not cite any discovery requests or depositions that informed
them. And Defendants’ counsel Brian Ledger, makes no reference to newly discovered facts in his declaration.
(Ledger Decl. ¶ 1.) Their request is based solely on the assertion that they
now believe they can develop evidence to support their Cross-Complaint. This is
insufficient.
4)
Injustice
to Defendants
Under CCP § 426.50, the Court is
obligated to grant leave liberally, in order to avoid forfeiture of causes of
action. Defendants’ cross-claim is against the Plaintiff from the original
complaint. Defendants cite five causes of action: 1) Breach of Contract, 2)
Fraud, 3) Negligent Misrepresentation, 4) Defamation, and 5) Unfair Business
Competition. (See generally, Cross-Compl.) Defendants argue that these
causes of action arise out of the same transaction or occurrences as the
original complaint. (Motion for Leave p. 5:6-14.) That would make this a compulsory
cross-complaint, meaning that if Defendants do not bring these claims now, they
forfeit their right to do so. (CCP § 426.30(a).)
The bulk of the cross-claims, however, as
not compulsory. All these causes
of action, except for Breach of Contract, rely on Defendants’ allegation that Plaintiff
and others perpetrated fraud against them. (Cross-Compl. ¶¶ 8, 16, 33-36, 40,
42-43, 45-47.) A cross-claim is compulsory if the related cause of action existed at
the time a defendant serves their answer to the complaint. (CCP § 426.30(a).) But, as explained above, Defendants
assert they were unaware of this fraud until late into the discovery process.
(Motion for Leave, p. 6:12-18.) Fraud, as a cause of action, arises upon
discovery by the aggrieved party. (CCP § 338(d).) That means Defendants’ causes
of action (2)-(5) against Plaintiff did not exist when the original complaint
was filed. Therefore, refusing the grant Defendants leave will not cause them
to forfeit these four causes of action.
The sole remaining cross-claim is for
breach of contract. Defendants provide no explanation for why they could not
have filed this simple breach of contract claim alongside their answer. (See generally, Motion for Leave.) For this and the other reasons explained above,
the Court does not believe Defendants have established their good faith in
filing this cross-claim so late.
V.
CONCLUSION
Given that trial is just over a month
away, Defendants’ previous history of delay, the lack of evidence cited to
support Defendants’ change of heart, and the fact that denial will not cause
Defendants prejudice, the Motion for Leave to File Cross-Complaint is DENIED.