Judge Peter A. Hernandez, Case Number: 22PSCV01008, Date: 2023-08-23 Tentative Ruling

Judge: Peter A. Hernandez, Case: 22PSCV01008, Date: 2023-08-23 Tentative Ruling

Case Number: 22PSCV01008 Hearing Date: August 23, 2023 Dept: K

Plaintiff/Cross-Defendant Scintillating Creation, Inc.’s Motion for Leave to File First Amended Complaint is GRANTED. The proposed FAC is deemed filed and served as of the date of the hearing.

Background

Plaintiff Scintillating Creation, Inc. (“SCI”) alleges as follows: On March 9, 2022, SCI and Defendant Jewel Scene, Inc. (“JSI”) entered into a written contract wherein SCI agreed to sell loose diamonds to Jewel for $108,558.50, payable via eight payments of $13,570.00. JSI has failed to make the required payments.

On September 7, 2022, SCI filed a complaint, asserting causes of action against JSI and Does 1-25 for:

1.      Breach of Contract
2.      Book Account
3.      Goods Sold and Delivered

On April 11, 2023, JSI filed a cross-complaint, asserting causes of action against SCI, Chetan Doshi and Roes 1-25 for:

1. Breach of Contract

2. Money Due and Owing—Unjust Retention

3. Fraud

The Final Status Conference is set for January 22, 2024. Trial is set for February 5, 2024.

Legal Standard

“The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading…” (Code Civ. Proc., § 473, subd. (a)(1); and see § 576 [“Any judge, at any time before or after commencement of trial, in the furtherance of justice, and upon such terms as may be proper, may allow the amendment of any pleading or pretrial conference order”].)

“[T]he trial court has wide discretion in allowing the amendment of any pleading.” (Bedolla v. Logan & Frazer (1975) 52 Cal.App.3d 118, 135.) “[I]t is irrelevant that new legal theories are introduced as long as the proposed amendments relate to the same general set of facts.” (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048 [quotation marks and citation omitted].) “[E]ven if the proposed legal theory is a novel one, the preferable practice would be to permit the amendment and allow the parties to test its legal sufficiency by demurrer, motion for judgment on the pleadings or other appropriate proceedings.” (Id. [quotation marks and citation omitted].) With that said, “the failure of a proposed amendment to state facts sufficient to constitute a cause of action or defense may support an order denying a motion to amend.” (California Casualty Gen. Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274, 280, disapproved of on other grounds in Kransco v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4^th 390)

Courts must apply a policy of great liberality in permitting amendments to the complaint at any stage of the proceedings, up to and including trial, when no prejudice is shown to the adverse party. (Atkinson v. Elk Corp. (2003) 109 Cal.App.4^th 739, 761.) However, “even if a good amendment is proposed in proper form, unwarranted delay in presenting it may—of itself—be a valid reason for denial. . . denial may rest upon the element of lack of diligence in offering the amendment after knowledge of the facts, or the effect of the delay on the adverse party.” (Roemer v. Retail Credit Co. (1975) 44 Cal.App.3d 926, 940.)

Also, “[a] motion to amend a pleading before trial must: (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.” (Cal. Rules of Court (“CRC”), rule 3.1324, subd. (a).)

Additionally, “[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.” (CRC Rule 3.1324, subd. (b).)

Discussion

SCI moves the court for an order granting SCI leave to file its proposed First Amended Complaint; more specifically, SCI seeks to add Jesse Lopez and Janice Lopez (the “Lopezes”) in as defendants (including as “alter ego” defendants to the first through third causes of action) and to add causes of action for Fraudulent Conveyance (CC § 3439.04(a)(1)), Fraudulent Conveyance (CC § 3439.04(a)(2)), Fraudulent Conveyance (CC § 3439.05) and Civil Conspiracy.

SCI’s motion reflects adequate compliance with CRC rule 3.1324, subdivision (a). Further, SCI’s counsel Timothy Krantz’s (“Krantz”) accompanying declaration reflects compliance with CRC rule 3.1324, subdivision (b). Krantz attests that he learned from JSI’s discovery responses received in May 2023 that the Lopezes have retired and closed JSI’s retail jewelry store location and that JSI has returned all of its inventory to vendors thereby, leaving JSI without assets.

JSI opposes the motion and asserts that, while JSI closed its retail store, JSI still has a commercial office at which the Lopezes conduct a wholesale jewelry business. JSI further asserts that it nowhere stated in its discovery responses that it returned inventory to vendors.

The motion is granted, pursuant to the policy of “great liberality.” The proposed FAC is deemed filed and served as of the date of the hearing.

The court notes that while counsel dispute what JSI’s discovery responses state, neither counsel has chosen to attach a copy of said responses to their respective briefs; at any rate, the Code provides the parties with avenues to pursue sanctions for pleadings filed for improper and/or frivolous purposes, if deemed warranted.

Lastly, the court rejects JSI’s request for sanctions as unsupported by any legal authority.