Judge: Monica Bachner, Case: 21STCV25811, Date: 2022-08-25 Tentative Ruling

Case Number: 21STCV25811    Hearing Date: August 25, 2022    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Plaintiff’s motion for leave to file an amended FAC is granted.

Plaintiff 10K Advertising, LLC (“10K LLC”) moves for leave to file a first amended complaint (“FAC”) to add a new plaintiff, 10K Advertising, Inc. (“10K Inc.) and name three additional individual defendants previously named as Does Richard A. Wright, Ryan Chessman and Frank Chessman (the “Individual Defendants”, collectively with 10K Inc. “Defendants”), and the following new causes of action and factual allegations in support thereof: (1) Fraud, (2) Interference with Contractual Relations, (3) Intentional Interference with Prospective Economic Advantage, (4) Negligent Interference with Prospective Economic Advantage, and (5) Statutory Unfair Business Practices in Violation of California’s UCL ( Business Professions Code § 17200).  (Notice of Motion, pgs. 1-3; C.C.P. §437(a), 576.)

Background

On July 13, 2021, Plaintiff 10K Advertising, LLC (“Plaintiff”) filed a Complaint against Alkaline 88, LLC and Does 1 through 10, inclusive (“Defendant”) alleging causes of action for (1) Breach of Contract, (2) Breach of Implied or Oral Contract, (3) Breach of Implied Covenant of Good Faith and Fair Dealing, and (4) Quantum Meruit.

On July 14, 2022, Plaintiff filed this motion for leave to file an amended complaint. On August 4, 2022, Defendant filed its opposition. On August 16, 2022, Plaintiff filed its reply. On April 23, 2033, the motion was originally reserved on the Court Reservation System for November 3, 2022. Ultimately Plaintiff obtained an earlier date of August 23, 2022, and then on August 19, 2022, on the Court's own motion, the hearing on the motion was continued to August 25, 2022. Trial is set for October 10, 2022.

Motion for Leave to Amend

“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.”  (C.C.P. §473(a)(1).)

“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.)

CRC Rule 3.1321(a) requires that a motion to amend must: “[i]nclude a copy of the proposed… amended pleading… [and] state what allegations in the previous pleading are proposed to be [deleted and/or added], if any, and where, by page, paragraph, and line number, the [deleted and/or additional] allegations are located…”

CRC Rule 3.1324(b) provides, as follows: “[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.”

Plaintiff’s motion complies with CRC Rule 3.1324(a). The motion includes a copy of the proposed FAC and sets forth the allegations to be added and/or deleted along with the corresponding page and line numbers.  (See Ex. A-B.)  Plaintiff 10K Advertising, LLC (“10K LLC”) moves for leave to file a first amended complaint (“FAC”) to add a new plaintiff, 10K Advertising, Inc. (“10K Inc.”) and name three additional defendants previously named as Does, in addition to the following new causes of action and factual allegation in support thereof: (1) Fraud, (2) Interference with Contractual Relations, (3) Intentional Interference with Prospective Economic Advantage, (4) Negligent Interference with Prospective Economic Advantage, and (5) Statutory Unfair Business Practices in Violation of California’s UCL ( Business Professions Code § 17200).  (Decl. of Tara Church ¶ 4.) 

Plaintiff’s motion complies with CRC Rule 3.1324(b).  Plaintiff includes a separate declaration from its counsel, which specifies the effect of the amendment, that the amendment is necessary and proper because the facts underlying the Amended Complaint have at all times been known to Defendants but were not known or knowable on 10K LLC’s part at the time of its original pleading. Counsel asserts that after months of delay and discovery misconduct by A88, Plaintiff has finally received the facts needed to allege serious wrongdoing against each of the Individual Defendants and have moved at the first opportunity for leave to amend the Complaint. (Church Decl. ¶ 10.) Counsel makes the following assertions:  (1) each of the Defendants has been on notice since at least June 30, 2021, when 10K LLC initiated arbitration before JAMS that 10K LLC intended to hold A88 liable for its fraudulent and tortious misconduct (Id. ¶ 6); (2) the Defendants have known since October 5, 2021, at the latest, when Plaintiff filed its Case Management Statement with this Court, that 10K LLC intended to amend the complaint to name Richard Wright and Ryan Chessman as individual defendants (Id. ¶ 7);  (3) since that time, Plaintiff has had numerous conversations with A88’s counsel wherein it expressly advised that 10K LLC would seek leave to amend the Complaint once it had conducted sufficient discovery to state its fraud claims with specificity, and not simply on information and belief (Id. ¶ 7); (4) Plaintiffs have been zealous in their efforts to discover facts in support of their claims (Id. ¶ 8) and (5) 10K LLC has noticed and/or sought mutually agreeable dates for six (6) depositions, 10K LLC has conducted discovery concerning all of the facts underlying the Amended Complaint, served additional deposition notices and document requests with which Defendant will be required to comply, and has undertaken expert damages analysis. (Id. ¶ 8.) Counsel claims Plaintiff’s delay in filing its amended complaint was due to Defendant’s delay in serving discovery responses. (Id. ¶ 12.)

In opposition, Defendant Alkaline 88 argues that this motion is made less than 6 weeks before trial in case is set to start.  Defendant argues that the Motion to Amend fails to explain why Plaintiff failed to bring this motion earlier, despite knowing the facts at least as far back as June 2021, and Plaintiff 10K LLC held off on filing this Motion until after Defendant Alkaline 88 filed and served its Motion for Summary Judgment. Defendant argues that at a minimum, this Motion should be denied as to the addition of 10K, Inc. as an additional Plaintiff and also denied as to the addition of the three new Defendants. Defendant suggests that if anything is allowed, it should only be the new causes of action alleged against Alkaline 88 by 10K, LLC and nothing more.

As a preliminary matter, as discussed above, the motion substantially complies with CRC Rule 3.1324(b); as such, the motion shall not be denied for being procedurally deficient. 

The Court finds Defendants will not be substantially prejudiced by the amendment and Plaintiffs are entitled to an order granting leave to amend.

To the extent there has been any delay in moving for leave to amend, given that Plaintiff indicated in its case management statement filed in October 2021 of its intent to amend the complaint once it had conducted sufficient discovery,  Defendants had notice of Plaintiff’s intent to amend the complaint at that time.  Moreover, there is no evidence of significant delay considering Plaintiffs’ counsel made the reservation in April 2022, requested an earlier date than was provided by the Court Reservation System, and indeed, secured an earlier date.  Defendant makes a general argument that it is prejudiced, but does not identify the specific prejudice.  As to the argument that the new Defendants should have the opportunity to challenge the complaint and conduct discovery, the Court acknowledges the trial date may need to be continued.  Regarding the Summary Judgment, it was filed after Defendant was advised on June 1, 2022 that Plaintiff intended to amend the complaint but required discovery responses.  (Church Decl., ¶ 7.)  Defendant’s arguments in opposition do not establish Defendant or Defendants will be so prejudiced by the amendment such that leave to amend should be denied.

Based on the foregoing, Plaintiff’s motion for leave to file an amended FAC is granted.

Dated:  August 25, 2022

Hon. Monica Bachner

Judge of the Superior Court