Judge: Richard Y. Lee, Case: 30-2020-01150194, Date: 2022-11-17 Tentative Ruling
Plaintiff CardConnect, LLC (“Plaintiff”) moves for leave to file a first amended complaint (“FAC”) to name additional parties Jeffrey Benice and John Schultz as defendants and to change this suit from a creditor’s suit to one for fraud.
The Court may, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading. (Code of Civ. Proc., § 473(a)(1).) Additionally, “[a]ny 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.” (Code of Civ. Proc., § 576.)
A motion to amend a pleading before trial must: (1) include a copy of the proposed amendment or amended pleading; (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, by page, paragraph, and line number, the additional allegations are located. (California Rules of Court, Rule 3.1324(a).)
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. (California Rules of Court, Rule 3.1324(b).)
Plaintiff alleges to be a judgment creditor of At Your Request Ticket and Concierge Service, LLC (“AYR”) and brought this suit against Defendants Gordon Shields aka Joe G. Shields (“Shields”) and Jackson Huang to have Defendants’ indebtedness to AYR, which was going to be adjudicated in a separate action, applied to its own judgment against AYR.
Plaintiff now seeks leave to amend its pleading to change the nature of this action from a creditor’s suit to one for fraud. Plaintiff’s proposed FAC is attached to the Motion as Exhibit B. Plaintiff’s counsel states that Jeffrey Benice and AYR filed a separate Complaint against Shields and Huang in November 2019, which was later dismissed in July 2021. (Declaration of Marta Roza, ¶ 7.) On April 4, 2022, Counsel was informed that AYR’s claims against Shields and Huang were dismissed because John Schultz communicated with this and admitted to stealing their money. (Id., ¶ 7.) Counsel further states that the dismissal is prejudicial to Plaintiff as there will be no adjudication of Shields and Huang’s indebtedness to AYR. (Id., ¶ 8.) In addition to adding claims for fraud, the proposed FAC adds Benice and Schultz as defendants. (Id., ¶ 10.)
Shields opposes the Motion, contending that the proposed FAC admits that the alleged misrepresentations occurred in 2018, and the proposed fraud cause of action against him is therefore barred by the three-year statute of limitations.
Plaintiff argues Shields has been aware of allegations of fraudulent acts committed by him since July 2020, when this action was filed.
“ ‘The prevailing rule with respect to actions involving parties designated by their true names in the original complaint is that, if an amendment is sought after the statute of limitations has run, the amended complaint will be deemed filed as of the date of the original complaint provided recovery is sought in both pleadings on the same general set of facts. [Citation.]’ ” (Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1199.) “Cases applying this relation back rule have made it clear that ‘it is the sameness of the facts rather than the rights or obligations arising from those facts that is determinative. [Citation.]’ [Citation.] Thus, amendments alleging a new theory of liability against the defendant have been found to relate back to the original complaint, so long as the new cause of action is based on the same set facts previously alleged.” (Id., at pp. 1199-1200.)
Plaintiff’s original Complaint alleges that Shields and Huang conspired to defraud AYR through a scheme in which they would purchase tickets on a monthly basis from AYR, obtain the tickets, and then claim false grounds to charge back the related credit card charges. (Compl., ¶ 6.) The proposed FAC alleges that, in 2018, Shields and Huang made false representations to their credit cards that charges by AYR were unauthorized as part of an agreement between AYR, Benice, and Schultz to purchase tickets for sporting and other events which were to be later resold for a profit. (Proposed FAC, ¶¶ 14-15.)
Both the original Complaint and the proposed FAC involve the same general set of facts: that Shields and Huang were part of a fraudulent scheme to purchase tickets from AYR and subsequently have the related credit card charges reversed after the tickets were in their possession. Because the allegations in the proposed FAC are based on the same misconduct as that alleged in the Complaint, the Court finds that the new amendments relate back to the original Complaint and are not barred by the statute of limitations.
In light of the above, Plaintiff’s Motion is GRANTED. Plaintiff is ORDERED to file and serve the first amended complaint within 10 days.
Plaintiff to give notice.