Judge: Michael Shultz, Case: TC029191, Date: 2023-02-09 Tentative Ruling

Case Number: TC029191    Hearing Date: February 9, 2023    Dept: A

TC029191 OMG Marketing Ventures, Inc. v. Newest Insurance Agency, Inc., et al.

Thursday, February 9,  2023 at 8:30 a.m.

[TENTATIVE] ORDER MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT

I.            BACKGROUND

            Plaintiff commenced this action on June 27, 2018. The First Amended Complaint alleges that Plaintiff bought commercial real property in Compton. While the property was in escrow with Hacienda Escrow Corporation (Hacienda), Plaintiff contracted with Newest Insurance Agency, Inc. (Newest) through its brokers, Juan Ramon Saldana and Eileen Benitez, to provide insurance for the subject property. Benitez advised that Pacific Specialty Insurance (Pacific) issued a policy for the subject property that included fire coverage. However, Pacific denied coverage after the property burned down claiming, among other reasons, that a policy had never been issued. Plaintiff alleges the following claims:

II.            ARGUMENTS

            Plaintiff’s motion, filed on January 12, 2023, seeks an order permitting the addition of Hacienda as a Defendant in the related claims for professional negligence and breach of fiduciary duty. Hacienda is already defending against the claims for negligence, fraud, constructive fraud, and unfair business practices, arising from the same factual circumstances, and therefore, the allegations will not be substantially changed. Hacienda’s expert has already given opinions on the theories of relief to be added against Hacienda. Defendants will not suffer prejudice or surprise.

            Hacienda’s opposition, filed on January 25, 2023, argues that the motion is not supported by a declaration explaining the need and effect of the proposed amendments. Plaintiff does not explain the delay in making this motion. Plaintiff waited four years after filing the FAC without explanation.

            The Court’s file does not reflect that Plaintiff filed a reply.

III.            DISCUSSION

Leave to amend is permitted at the court’s discretion upon any terms that may be just. Code Civ. Proc., § 473 subd. (a)(1). The statute is liberally construed to permit amendment of the pleadings “unless an attempt is made to present an entirely different set of facts by way of the amendment.” Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 760. The motion must be supported by a declaration stating the effect of the amendment, why the amendment is necessary and proper, when the facts giving rise to the amended allegations were discovered; and the reasons why the request for amendment was not made earlier." Cal. Rules of Court, Rule 3.1324.

The amendment is necessary after Plaintiff took the deposition of Hacienda’s expert, Ms. Vclek, on May 18, 2022. Decl. of Juan Dotson, ¶ 11. Ms. Vleck rendered an opinion on Hacienda’s fiduciary duty to Plaintiff and concluded the duty was not violated. Id. However, Ms. Vclek admitted Hacienda’s duty to follow instructions requirement payment to everyone at the close of escrow, which Hacienda did not follow. Id. at ¶ 12. Plaintiff seeks to amend the FAC to conform to the facts. Id. at ¶ 13. The necessity for the amendments became clear to Plaintiff’s counsel after meeting and conferring with Defendants on jury instructions. Id. Plaintiff’s counsel states there were no hearing dates prior to trial. Id.

Plaintiff’s counsel asserts that the amendments will more specifically address the duties owed by Hacienda (professionally and as a fiduciary). Hacienda is currently defending against a negligence claim.

If the motion is timely made, and the granting of the motion will not result in prejudice to the opposing party, it is error to refuse permission to amend. Morgan v. Superior Court of Cal. In and For Los Angeles County (1959) 172 Cal.App.2d 527, 530. Where denial of the motion will result in a party being deprived of the right to assert a meritorious cause of action, “it is not only error but an abuse of discretion.” Id. Amendments are permitted up to the date of trial or during trial where no prejudice is shown to the adverse party. Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761.

Hacienda has not asserted that it will suffer prejudice as a result of the amendments nor does it dispute Plaintiff’s contention that additional discovery will not be required to prepare for trial, which is currently set for March 8, 2023. 

IV.            CONCLUSION

Accordingly, the motion is GRANTED. Plaintiff is ordered to file the Second Amended Complaint forthwith.