Judge: Monica Bachner, Case: BC661725, Date: 2022-10-31 Tentative Ruling

Department 71: Attorneys who elect to submit on these published tentative rulings, without making an appearance at the hearing, may so notify the Court by communicating this to the Department's staff at (213) 830-0771 before the set hearing time.  See, e.g., CRC Rule 324(b).   All parties are otherwise encouraged to appear by Court Call for all matters.

Case Number: BC661725    Hearing Date: October 31, 2022    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Plaintiffs’ motion for leave to file a third amended complaint is granted.

Plaintiffs Nayael Mendoza (“Mendoza”) and Manuel Garay (“Garay”) (collectively, “Plaintiffs”) move for leave to file a third amended complaint (“TAC”) in this action.  Plaintiffs seek to file the TAC to (1) specify that all causes of action are against all defendants and (2) to add an additional cause of action based on facts already alleged in the complaint.  (Notice of Motion, pg. 2.)

Request for Judicial Notice

Defendant Pablo Montalvan’s 10/18/22 request for judicial notice of the April 20, 2022 minute order is denied, as there is no need to take judicial notice since the Court can review the records of the case at hand.

Background

On May 17, 2017, Plaintiffs filed a complaint against Defendants Pablo Montalvan (“Montalvan”) and SCC Transport, Inc. dba So Cal Carriers (“SCC”) (collectively, “Defendants”) alleging eight causes of action: (1) failure to pay overtime, (2) violation of Labor Code §226, (3) failure to pay for rest periods not provided, (4) failure to pay for meal periods not provided, (5) waiting time penalties, (6) failure to pay minimum wage, (7) negligence, and (8) unfair competition. On August 10, 2017, Plaintiffs filed their first amended complaint (“FAC”).  On October 12, 2017, Plaintiffs filed their operative second amended complaint (“SAC”). Plaintiffs alleged Defendants hired Plaintiffs on or around June 20, 2015, as intra-state truck drivers, and as part of the employment, Plaintiffs were required to purchase the trucks to be used from Defendants at payments of approximately $1,270 per month, which was deducted from their pay.  (SAC ¶15.)  Plaintiffs allege Defendants failed to inspect the trucks prior to sale and misinformed Plaintiffs regarding the truck’s condition and told Plaintiffs the trucks were in good working order when the trucks were in serious disrepair and would require considerable work and maintenance if they were to become and remain usable for work.  (SAC ¶15.)  Defendants told Plaintiffs they could not use the trucks to haul or drive for anyone other than Defendants at the risk of being fired.  (SAC ¶16.)  Plaintiffs were required to pay for their own gas, maintenance, and related costs, such as fees incurred while hauling a load.  (SAC ¶17.)  Defendants required Plaintiffs to show up at the yard every day, five days a week, and remain on call and wait for a load without compensation.  (SAC ¶20.)  Plaintiffs allege they typically worked eighteen hours per day, five days a week and earned $700 per week.  (SAC ¶21.)  Plaintiffs resigned on March 31, 2017.  (SAC ¶22.)

On October 10, 2018, SCC filed a petition in bankruptcy.  On October 24, 2018, this Court entered an order staying the entire action.  On January 21, 2022, the parties filed a Joint Status Conference Report informing this Court that SCC’s bankruptcy case has been closed, SCC had been suspended by the California Secretary of State, and there was no intent by SCC’s owners to revive the entity. On February 10, 2022, this Court lifted the stay on this action. (2/10/22 Minute Order.)  On July 14, 2022, Plaintiffs filed the instant motion for leave to file a TAC.  Montalvan filed his opposition on October 18, 2022.  Plaintiffs filed their reply and amended reply on October 24, 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.”

Plaintiffs’ motion complies with CRC Rule 3.1324(a). The motion includes a copy of the proposed TAC and sets forth the allegations to be added and/or deleted along with the corresponding paragraph numbers.  (Motion, pgs. 4-7; Decl. of Schelly ¶¶2-3, Exh. A [TAC].)

Plaintiffs’ motion also substantially complies with CRC Rule 3.1324(b). Plaintiffs submitted a separate declaration of their counsel that specifies the effect of the amendment and explains why the amendment is necessary and proper.  (Decl. of Schelly ¶4.)  Plaintiffs assert the amendment is necessary in that they would allow the parties to resolve Plaintiffs’ claims of liability arising out the employment relationship between Plaintiffs and Defendants alleged in the complaint, the FAC, and SAC in a single lawsuit.  (Motion, pg. 8; Decl. of Schelly ¶4.)  Plaintiffs assert the proposed amendments arise out of the same facts as the claims alleged in the SAC and the new failure to pay business related expenses cause of action is based on the same misconduct underlying the other causes of action.  (Motion, pg. 8.)  Plaintiffs also assert given SCC’s bankruptcy and failure to remain as an ongoing entity, it is in furtherance of justice to allow Plaintiffs to amend to pursue Montalvan for liability for the alleged wage and hour violations pursuant to Labor Code §558.1.  (Motion, pg. 8; Decl. of Schelly ¶5.)  Plaintiffs assert the facts giving rise to the amendments have been known from the outset, but Plaintiffs have been prevented from seeking to amend during the stay of the entire action from October 24, 2018, to February 10, 2022, and Plaintiffs filed this motion diligently once the stay was lifted.  (Motion, pg. 8; Decl. of Schelly ¶5.)  Plaintiffs assert Defendants will not be prejudiced by the amendments because when the Court lifted the stay on February 10, 2022, it also set a trial date of February 14, 2023, so Defendants have plenty of time to conduct discovery.  (Motion, pg. 8.)

In opposition, Montalvan argues Plaintiffs’ motion is procedurally improper for failing to comply with CRC Rule 3.1324(b).  (Opposition, pgs. 3-4.)  Montalvan argues he will be prejudiced if they motion is granted because (1) Plaintiffs have waited more than nine months to file their motion for leave to file the TAC after Montalvan filed his motion for summary adjudication; (2) Plaintiffs concede to have knowledge of the new allegations since the outset of litigation in May 2017, but failed to include the TAC’s proposed allegations in the FAC or SAC; and (3) Montalvan will be required to defend against the new cause allegations and cause of action, despite the fact there has been no ruling on Investment’s motion to strike the doe amendment or Montalvan’s motion for summary adjudication.  (Opposition, pg. 4.)

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. Alter ego allegations were included in the FAC, and indeed were the subject of the summary judgment/adjudication filed before the bankruptcy filing of the entity defendant.  Plaintiffs did not unnecessarily delay:  the stay was lifted in February 2022, plaintiff moved for the same relief shortly thereafter April 2022, and the instant motion was filed in July 2022, Defendants had notice of Plaintiffs’ intent to amend their pleading at that time.  Montalvan’s assertion that granting leave to file the TAC will prejudice Defendants because they will be required to defend a new cause of action is not persuasive as it is based upon the same general facts relating to an employment relationship.  Montalvan’s further arguments regarding the timing of the summary judgment motion is not persuasive as the motion was just filed.  Montalvan’s arguments in opposition do not establish Defendants will be so prejudiced by the amendment such that leave to amend should be denied.

Based on the foregoing, Plaintiffs’ motion for leave to file a TAC is granted.

Dated:  October _____, 2022

Hon. Monica Bachner

Judge of the Superior Court