Judge: Peter Wilson, Case: JCCP4811, Date: 2022-07-28 Tentative Ruling

Plaintiffs Lorelei Mooney, Gary Lamm, and James Mieuli’s motion for leave to file a Fifth Amended Complaint is GRANTED.

 

California courts generally allow great liberality, at all stages of the proceeding, in permitting the amendment of pleadings in order to resolve cases on their merits. (IMO Development Corp. v. Dow Corning (1982) 135 Cal. App. 3d 451, 461.) It is a “rare case” in which denial of leave to amend can be justified. (Douglas v. Superior Court (1989) 215 Cal. App. 3d 155, 158 (citation omitted).)

 

This liberality only applies so long as there is no prejudice to the opposing party. (Higgins v. Del Faro (1981) 123 Cal. App. 3d 558, 564.)  Denial of leave to amend is appropriate where inexcusable delay and probable prejudice to the opposing party is shown.  This may happen where a proposed amendment opens up an entirely new field of inquiry without any satisfactory explanation as to why the major change in point of attack had not been made long before trial. (Estate of Murphy v. Gulf Ins. Co. (1978) 82 Cal. App. 3d 304, 311.)

 

If the party seeking the amendment has been dilatory, and the delay has prejudiced the opposing party, the judge has discretion to deny leave to amend. (Hirsa v. Superior Court (1981) 118 Cal. App. 3d 486, 490.)

 

Plaintiffs argue that they are seeking amendment because of the newly obtained records from the Argus Parties. Plaintiffs contend they are substituting in new class representatives because Gary Lamm is incapacitated and to remove the Plaintiffs who do not own any of the six properties at issue. ROA 1688, Catanzarite Decl., ¶¶7 and 13. While Defendants Chicago Title Insurance Company and Chicago Title Company (the “CTC Defendants”) dispute these claims and present evidence that Plaintiffs’ counsel was aware of the inadequacy of Plaintiffs as class representatives and should have known that new or additional representatives were necessary, the Court is not convinced that Plaintiffs unreasonably delayed in seeking the amendment given the history of this matter, including the intervening appeal, and their actions in seeking to obtain the Argus Parties’ documents.

 

The main issue here is whether Plaintiffs should be permitted to amend their operative complaint to substitute in new class representatives after their class certification motion was denied and CTC Defendants challenged the typicality and adequacy of the named Plaintiffs as class representatives in opposing the certification motion. CTC Defendants contend that Plaintiffs have unreasonably delayed in seeking an amendment and that granting the amendment would cause them undue prejudice because they based their defense on the current class representatives and would be forced to start over.

 

CTC Defendants rely on Payton v. CSI Electrical Contractors, Inc. (2018) 27 Cal.App.5th 832 (Payton) to support their arguments. The Payton court affirmed the trial court’s ruling to deny leave to amend to add substitute plaintiffs when the trial court found the plaintiff to be inadequate as a class representative because of, among other things, his prior criminal convictions. The Payton court explained that plaintiff’s unreasonable delay in seeking amendment unduly prejudiced defendants because they successfully opposed the class certification based on plaintiff’s inadequacy. (27 Cal.App.5th at 849-850.) The Payton court found the time and money defendants spent opposing the class certification motion based on the plaintiff as the class representative qualified as sufficient prejudice to justify denial of the amendment. (Id. at 849-850; see also, Melican v. Regents of University of California (2007) 151 Cal.App.4th 168, 176-177 [denial of leave to amend appropriate where facts underlying new claim was known five years before, the amendment was sought only after summary judgment motion was filed, there was no explanation for the unreasonable delay, and it would be prejudicial to permit the amendment]; In re Flash Memory Antitrust Litig. (N.D. Cal. 2010), 2010 WL 2332081 [amendment to substitute plaintiff would be unduly prejudicial to defendants who prepared defense based on identities of class representatives and require new or additional discovery]; Giron v. Hong Kong & Shanghai Bank Co. (C.D. Cal. 2017) 2017 WL 5495504 [motion to substitute class representatives denied where class certification motion was filed and amendment was sought only after the class representatives were challenged on typicality and adequacy].)

 

Payton is distinguishable. Although CTC Defendants did raise the issue of the typicality and adequacy of the named Plaintiffs in opposing class certification (ROA 1723, Supp. Catanzarite Decl., Ex. G, Opp. to Class Cert. Motion), this Court denied class certification based on deficiencies with ascertainability and numerosity, not the typicality or adequacy of the named Plaintiffs. ROA 1626. In fact, this Court expressly stated it “will not pre-judge the questions of commonality, typicality, adequacy and superiority on an incomplete record. These issues will be addressed if and when Plaintiffs renew their motion for class certification.” ROA 1626. Thus, unlike in Payton, the inadequacy or atypicality of the plaintiff was not the basis of the denial of class certification here.

 

Further, as a general rule, the additional time and money of conducting non-duplicative discovery is not considered prejudice unless discovery had already closed and/or trial is set to begin:

Where the trial date is set, the jury is about to be impaneled, counsel, the parties, the trial court, and the witnesses have blocked the time, and the only way to avoid prejudice to the opposing party is to continue the trial date to allow further discovery, refusal of leave to amend cannot be an abuse of discretion.

(Magpali v. Farmers Group, Inc. (1996) 47 Cal.App.4th 1024, 488.) There is no trial date set in this case. 

 

CTC Defendants request that, should this Court grant the Motion, certain conditions be imposed upon Plaintiffs, such as payment of all costs CTC Defendants incurred before permitting the amendment or dismissal of the named Plaintiffs’ claims. The Court declines to impose any such conditions.

 

Plaintiffs are Ordered to file and serve the Fifth Amended Complaint within 10 days hereof.

 

Plaintiffs are ordered to give notice.