I. BACKGROUND 

On February 23, 2024, plaintiffs Nigel Burns dba The Law Offices of Nigel Burns and Snyder & Hancock filed this breach of contract action against defendants Patricia Casado, Patricia Casado as trustee of the Lucy Casado Trust, dated November 16, 2015, and Does 1 to 10 alleging nonpayment for legal services rendered in various probate, trust, and civil litigation matters stemming from Lucy Casado’s estate. The verified Complaint sets forth six causes of action for (1) Breach of Contract, (2) Common Count: Money Had Received/Indebitatus Assumpsit, (3) Common Count: Account Stated, (4) Fraud, (5) Unjust Enrichment, (5) Common Count: Goods and Services Rendered/Quantum Meruit. 

On April 3, 2024, Patricia Casado, individually and as Trustee of the Lucy Casado Trust (“Casado”) filed a verified Answer to Plaintiffs’ Complaint. 

On April 3, 2024, Casado (in her individual capacity) filed a verified Cross-Complaint against Nigel Burns dba The Law Offices of Nigel Burns and Snyder & Hancock. 

On May 16, 2024, Casado (in her individual capacity) filed a verified amended Cross-Complaint against the same parties. 

On May 17, 2024, Casado (individually and as Trustee) filed a verified amended Answer to Plaintiffs’ Complaint. 

On July 17, 2024, Casado filed a motion seeking leave to file a Second Amended Cross-Complaint (“SACC”). Additionally, on July 24, 2024, Casado filed a motion seeking leave to file a Second Amended Answer (“SAA”). Both motions were set to be heard on October 9, 2024. 

On September 25, 2024, Plaintiffs/Cross-Defendants Nigel Burns dba The Law Offices of Nigel Burns and Snyder & Hancock (collectively, “Plaintiffs” or “Cross-Defendants”) filed their oppositions to the motions. 

On October 2, 2024, Casado filed her replies. 

II. LEGAL STANDARD 

CCP § 473(a)(1) provides, in relevant part:¿ “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.”¿¿ 

“Trial courts are vested with the discretion to allow amendments to pleadings ‘in furtherance of justice.’ That trial courts are to liberally permit such amendments, at any stage of the proceeding, has been established policy in this state since 1901.”¿(Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 488-489.) “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. Superior Court (1989) 213 Cal.App.3d 1045, 1047.) 

Under CRC Rule 3.1324(a), a motion to amend a pleading shall (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.¿¿ 

Under CRC Rule 3.1324(b), 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 reasons why the request for amendment was not made earlier.¿ 

III. DISCUSSION 

Casado seeks leave to amend the Answer and Cross-Complaint after her counsel met and conferred with Plaintiffs’ counsel on June 24, 2024 regarding deficiencies in the pleading. (Wick Decl. ¶14-16.) Casado avers that she seeks to differentiate herself and the Casado Trust in the proposed SAA and to correct grammatical errors, and to allege additional affirmative defenses and include a prayer that judgment be for Casado as Trustee. As for the proposed SACC, Plaintiff seeks to delete and add paragraphs to include additional facts to clarify the allegations, and to include additional causes of action. Casado provides in her moving papers the proposed allegations to be deleted/added and identifies its location, in addition to separately providing red-line copies of the proposed amended pleadings which identifies each change. (Index, Ex. 1 and Ex. 3.) 

In opposition, Plaintiffs argue that the proposed amended complaint contains allegations that contradict or omit facts alleged in earlier pleadings, such that it would constitute as sham pleadings. Plaintiffs argue the proposed SACC omits the allegation that Cross-Defendants misrepresented to Casado that her brother, Frank J. Casado, was lawfully married to a “secret wife”, but that the proposed SACC now acknowledges that Frank J. Casado was in fact married. Plaintiffs argue that any allegations related to Cross-Defendants coercing Casado into signing a settlement agreement must be deleted. Plaintiffs argue the proposed amendments introduce undue delay, improper uncertainty, and complexity that would be prejudicial. 

In reply, Casado argues that Cross-Defendants’ arguments are misleading because none of the cross-complaints allege that “Plaintiffs Burns and Hancock had misrepresented the existence of a purported ‘secret wife’ of Frank James Casado in order to pressure Casado to settle” as argued, but that the Cross-Complaint alleged that Cross-Defendants mislead Casado to believe that the “secret wife” (i.e. Claudia Correa aka Claudia Casado) was entitled to Frank Casado’s share of the trust estate. Casado reasserts that the proposed amendment to the Cross-Complaint and Answer clarifies her allegations and theories against Cross-Defendants. Additionally, Casado contends that omitting the term “secret wife” and adding more details is not an inconsistency, nor is it relevant that Frank J. Casado kept his wife a secret from his family. 

“Generally, after an amended pleading has been filed, courts will disregard the original pleading.”¿(Larson v. UHS of Rancho Springs, Inc. (2014) 230 Cal.App.4th 336, 343 (internal citations omitted).) However, the sham pleading doctrine is an exception to this rule. When a complaint contains allegations that are fatal to a cause of action, a plaintiff facing demurrer cannot avoid those defects simply by filing an amended complaint that omits the problematic facts or pleads facts inconsistent with those alleged earlier. (Banis Restaurant Design, Inc. v. Serrano (2005) 134 Cal.App.4th 1035, 1044.)¿A subsequent complaint is considered a “sham” pleading if the amendment contains allegations that contradict the earlier pleading or that omit previously pled facts that rendered the initial complaint deficient.¿(Owens v. Kings Supermarket (1988) 198 Cal.App.3d 379, 383-84.)¿Absent an explanation for the inconsistency, a court will read the original defect into the amended complaint, rendering it vulnerable to demurrer again.¿(Hendy v. Losse (1991) 54 Cal.3d 723, 743.) 

A pleading of mere inconsistent facts alone, however, does not require the Court to find the pleading defective.¿The sham pleading doctrine, “does not exist in a vacuum and cannot be mechanically applied.”¿(Berman v. Bromberg (1997) 56 Cal.App.4th 936, 946, quoting Contreras v. Blue Cross of California (1988) 199 Cal.App.3d 945, 950.) “The sham pleading doctrine is not intended to prevent honest complainants from correcting erroneous allegations or to prevent correction of ambiguous facts.”¿ (Larson 230 Cal.App.4th at 344.)¿ The rule was not intended to preclude plaintiffs from providing additional and noncontradictory allegations.¿(Leasequip, Inc. v. Dapeer (2002) 103 Cal.App.4th 394, 404, fn. 6.) “Instead, it is intended to enable courts to prevent an abuse of process.”¿ (Id. at 344; Hahn v. Mirda (2007) 147 Cal.App.4th 740, 751.) “The exception is reserved, however for the extreme case, and it may not be indiscriminately applied; it must be taken together with its purpose, which is to prevent amended pleading which is only a sham, when it is apparent that no cause of action can be stated truthfully.” (Amarel v. Connell (1988) 202 Cal.App.3d 137, 144.) 

The original cross-complaint alleged that “Cross-Defendants negligently misrepresented the existence of a “secret wife” entitled to Frank’s share of the Casado Trust and Non-Trust properties to induce her to “settle” her claims….” (Cross-Complaint ¶79, 83, 89), which was removed in the First Amended Cross-Complaint and is not alleged in the proposed SACC. Here, the Court finds that Casado has not attempted to avoid defects in the prior complaint by omitting them, as argued by Plaintiffs. Casado changing an allegation of a “secret wife” and later acknowledging that there was in fact a lawful wife (as argued by Plaintiffs) does not appear to be a deliberate omission. Rather, the change appears to be a correction or clarification of an erroneous allegation, which is not an abuse of process. The Court finds that Casado adding that Cross-Defendants used other means to pressure Casado to settle provides additional allegations that are not necessarily contradictory to the prior allegations, nor is the Court persuaded that the original allegation that Frank Casado had a “secret wife” who was misrepresented as having entitlement to a share of the Casado Trust was so central to the entirety of the Cross-Complaint, such that its later change would constitute a sham pleading. Further, Plaintiffs’ reliance on Melican v. Regents of University of California (2007) 151 Cal. App. 4th 168 and Record v. Reason (1999) 73 Cal. App. 4th 472 are distinguishable from the circumstances of this matter. 

In Record, the appellant had knowledge of the circumstances on which he based the amended complaint on the day he was injured and waited almost three years before he sought leave to amend. (Record, supra, 73 Cal. App. 4th at 487.) As such, the trial court did not abuse its discretion in denying leave to amend, especially when appellant put forth near identical evidence in opposition to summary judgment as he did in support of the motion to amend. (Ibid.) 

In Melican, the appellate court affirmed the trial court denying plaintiffs’ oral motion for leave to amend at the summary judgment hearing to add a new breach of contract claim, because plaintiffs were aware of the facts underlying the purported contract, yet never sought to add the claim until over five years later. (Melican, supra, 73 Cal. App. 4th at 176.) Because of the unreasonable delay, it would be “patently unfair” to allow plaintiffs to defeat the defendant’s summary judgment motion “by allowing them to present a “moving target” unbounded by the pleadings.” (Id. at 176.) Further, the proposed new breach of contract claim did not appear viable. (Ibid.) 

The circumstances in Melican and Record are not present here. The parties in both Melican and Record unduly delayed in seeking leave to amend, which was prejudicial to the defendants in those actions who had already brought motions for summary judgment. This action was filed by Plaintiffs earlier this year on February 23, 2024, and Casado filed her Answers/Cross-Complaint in April and May of 2024. Only two months have passed between the time of the last amended pleadings to the current motion seeking leave to file a SAA and SACC. Unlike the parties in Melican and Record who sat on the proposed additions for several years, there is no such issue here. Further, there is no demonstration or argument that the additional affirmative defenses or additional causes of action are defective on its face, such that it fails to state a viable claim against Cross-Defendants. Just because there are substantive allegations against Cross-Defendants is not a proper reason to deny leave to amend, especially with (1) trial currently set for November 3, 2025, wherein Plaintiffs/Cross-Defendants have ample time to conduct discovery, and (2) the parties are at the early stages of litigation in which there is no evidence that any significant discovery had already commenced and concluded. [See Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1047 [“This discretion should be exercised liberally in favor of amendments, for judicial policy favors resolution of all disputed matters in the same lawsuit.”].) The Court does not find that the circumstances presented here constitutes such an “extreme case” where the sham pleading doctrine should apply.¿Additionally, the Court does not find that Plaintiffs have presented sufficient evidence to show that Casado’s proposed amendments are an attempt to abuse the process where “no cause of action can be stated truthfully.”¿(See Amarel 202 Cal.App.3d at 144.) 

Lastly, Plaintiffs argue that the separate declaration by Casado’s counsel fails to specify why the amendments are necessary and proper and does not provide any facts giving rise to when the amended allegations were discovered pursuant to CRC Rule 3.1324(b). The purpose of CRC Rule 3.1324(b) is to assist a court in determining whether there are grounds for the proposed amendment, and whether there has been any undue delay. Here, Casado’s counsel declares that he consulted with Casado on May 23, 2024, wherein he learned of additional information that fixed misunderstandings he had about the underlying facts and which gave rise to additional causes of action. (Wick Decl. ¶ 14.) Further, Casado’s counsel’s meet and confer with Plaintiffs’ counsel on June 24, 2024 regarding Plaintiffs’ intention to file a demurrer to the Answer and Cross-Complaint appears to have spurred the instant motions for leave to amend. (Id. ¶ 16.) The Court has already found that there was no undue delay nor any prejudice to Plaintiffs by allowing the amendment. Under the totality of the circumstances, the Court finds no reason to deny the motions based on minor deficiencies related to CRC Rule 3.1324(b).  

IV. CONCLUSION 

Based on the foregoing, Casado’s motions to file a SAA and SACC are GRANTED. Casado is ordered to file a separate copy of the proposed SAA and SACC within ten (10) days of the date of this Order.¿ 

Moving Party is ordered to give notice. 

DATED: October 8, 2024 

__________________________ 

Hon. Michelle C. Kim 

Judge of the Superior Court