Judge: Robert S. Draper, Case: 22STCV04061, Date: 2022-08-01 Tentative Ruling

Case Number: 22STCV04061    Hearing Date: August 1, 2022    Dept: 78

Superior Court of California 

County of Los Angeles 

Department 78 

Plaintiff Montano Investments, Inc.’s Motion for Leave to File a First Amended Complaint is GRANTED. Plaintiff is to file the First Amended Complaint within five days of the issuance of this Order.

Plaintiff Montano Investment, Inc.’s Motion to Consolidate is GRANTED. This action is hereby consolidated with LA Superior Court case numbers 22STUD00257 and 22STUD00250.

Plaintiff Montano Investment, Inc.’s Motion for Preliminary Injunction is DENIED as moot.

FACTUAL BACKGROUND

This is an action for wrongful foreclosure and fraud. The Complaint alleges as follows.

Plaintiff Montano Investments, Inc. (“Plaintiff”) worked with Defendant Marc Mendez (“Mendez”) to buy, develop, and sell real estate. (Compl. ¶ 10.) Mendez decided he no longer wanted to work with Plaintiff and forced Plaintiff, under duress, to transfer their joint properties to Mendez’s company, Defendant USA Real Estate Investment Services, Inc (“USA”). (Compl. ¶ 11.)

Plaintiff maintained possession of property at 2880 W. 14th Street, Los Angeles CA (the “Subject Property”). (Compl. ¶ 12.) However, Mendez forced Plaintiff to sign a deed of trust in the amount of $100,000 with USA as the beneficiary. (Compl. ¶ 12, Ex. 1.) Shortly thereafter, Mendez forced Plaintiff to sign a second deed of trust on the Subject Property in USA’s name. (Compl. ¶ 14; Ex. 2.)

Mendez then forged a promissory note showing that Plaintiff owed USA $540,000 on the Subject Property instead of the $140,000 reflected on the deed of trust Plaintiff signed before a notary. (Compl. ¶ 19; Ex. 3.)

Mendez foreclosed on the Subject Property without providing Plaintiff notice, and the foreclosure sale was held outside of Los Angeles County. (Compl. ¶ 28.)

PROCEDURAL HISTORY 

On February 2, 2022, Plaintiff filed the Complaint asserting seven causes of action:

1.    Malicious Prosecution;

2.    Quiet Title;

3.    Fraud;

4.    Recission;

5.    Unlawful/Unfair Business Practices;

6.    Quasi-Contract/Unjust Enrichment; and

7.    Equitable Set Aside of Foreclosure.

On February 7, 2022, Plaintiff filed a Notice of Lis Pendens.

On March 28, 2022, USA filed an Answer.

On June 22, 2022, Plaintiff filed an Ex Parte Application for a Temporary Restraining Order staying two unlawful detainer cases stemming from proper title to the Subject Property. The Court granted Plaintiff’s Application.

Also on June 22, 2022, Plaintiff filed the instant Motion to Consolidate and Motion for Leave to File a First Amended Complaint.

On July 12, 2022, Specially Appearing Defendant Anchor Finance LLC (“Anchor”) filed an Opposition.

On July 25, 2022, Plaintiff filed a Reply.

DISCUSSION 

I.               MOTION FOR LEAVE TO FILE AN AMENDED COMPLAINT

Plaintiff moves the Court for leave to file a First Amended Complaint.

When a party moves to amend a pleading, “courts generally should permit amendment to the complaint at any stage of the proceedings, up to and including trial. [Citations.]” (Melican v. Regents of University of California (2007) 151 Cal.App.4th 168, 175.) In ruling on this type of motion, prejudice to another party is the main concern. (Hirsa v. Superior Court (1981) 118 Cal.App.3d 486.) The type of prejudice the court is to be concerned with should be something beyond simply having to cope with a potentially successful new legal theory of recovery that has been revealed during discovery. (Ibid.) Instead, the court should look for delays in the trial date, loss of critical evidence, extensive increase in the costs of preparation and other similar circumstances that create prejudice to another party. (Melican, supra, 151 Cal.App.4th at p. 176.) 

Here, Plaintiff seeks to add five causes of action for Civil Conspiracy to Commit Fraud, Aiding and Abetting Fraud, Wrongful Foreclosure, Abuse of Process, Violation of Civil Code § 2943 and Promissory Estoppel. Additionally, Plaintiff seeks to remove two claims from the original Complaint. Finally, Plaintiff seeks to replace seven Doe Defendants with named defendants.

As the trial date has not been set yet, and as no Opposition has been filed, the Court finds that the proposed amendment will not prejudice Defendants. Additionally, upon review of the proposed First Amended Complaint, the Court finds that the proposed amendments relate to the original controversy, and that it is in the interest of justice that the additional claims be heard.

Accordingly, Plaintiff’s Motion for Leave to file a First Amended Complaint is GRANTED. Plaintiff is to file the First Amended Complaint within five days of the issuance of this Order.

II.             MOTION TO CONSOLIDATE

Next, Plaintiff moves the Court to consolidate the instant action with two related Unlawful Detainer cases, Los Angeles Superior Court Case Numbers 22STUD00257 and 22STUD00250 (the “UD Actions”).

Code Civ. Proc.,¿§ 1048, subd.¿(a) states, “[w]hen actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.” (Code Civ. Proc.,¿§ 1048,¿subd.¿(a);¿see also¿Spector v. Superior Court¿(1961) 55 Cal.2d 839, 844 [Two actions that present essentially the same, or overlapping, issues should be consolidated and disposed of as a single proceeding].)¿¿¿ 

Consolidation, however, is not a matter of right; it rests solely within the sound discretion of the trial judge. (Fisher v. Nash Bldg. Co.¿(1952) 113 Cal.App.2d 397, 402.)¿ Actions may be thoroughly “related” in the sense of having common questions of law or fact, and still not be “consolidated,” if the trial court, in the sound exercise of its discretion, chooses not to do so.¿ (Askew v. Askew¿(1994) 22 Cal.App.4th 942, 964.) It is not abuse of discretion to deny motion for consolidation of actions where parties in each action are different or issues are different.¿(See¿Muller v. Robinson¿(1959) 174 Cal App 2d 511, 515.)¿On the other hand, actions may be consolidated in the discretion of the trial court whenever it can be done without prejudice to a substantial right.¿ (Carpenson¿v.¿Najarian¿(1967) 254 Cal.App.2d 856, 862.) 

In deciding whether to grant a motion to consolidate, the court should weigh whether the common issues predominate over the individual issues and whether any risks of jury confusion or prejudice to the parties outweighs the reduction in time and expense that would result from consolidation.¿ (Todd-Stenberg v. Shield¿(1996) 48 Cal.App.4th 976, 978.)¿ 

Here, Plaintiff argues that the instant action and the UD Actions both relate to controversy arising from the proper title to the Subject Property. In the UD Actions, Defendant Anchor Finance seeks to evict the current residents of the Subject Property, Plaintiff’s father and Plaintiff’s employee. (Montano Decl., ¶ 22.) Plaintiff argues that the summary process of Unlawful Detainer Court does not adequately address the issues of fraud and disputed title alleged in the instant action.

Plaintiff cites Martin-Bragg v. Moore (2013) 219 Cal.App.4^th 367, to support this contention. In Martin-Bragg, the California Court of Appeal held that, when a court has before it allegations demonstrating a complex factual scenario under which the unlawful detainer plaintiff might not hold title sufficient to justify an unlawful detainer judgment, a “trial court’s trial and implicit determination of the ownership issue within the summary unlawful detainer proceeding, and refusal to permit trial of the issue of title outside of those summary procedures, [is] an abuse of discretion.”

In Opposition, Anchor makes three arguments.

A.   Procedural Defects

First, Anchor argues that the Motion to Consolidate must be denied because the actions in question are pending in separate courts, and the moving papers do not seek a transfer, instead merely seeking consolidation.

However, as Plaintiff notes in its Reply, the actions are all pending within the same Court, and, indeed, within the same courthouse. Therefore, it was not necessary for Plaintiff to seek a transfer in the moving papers.

Additionally, Anchor contends that Plaintiff’s Motion to Consolidate was procedurally defective as it did not comply with California Rules of Court, rule 3.350.[1] Anchor notes that Plaintiff’s notice of motion list all parties in both cases, list their attorneys of record, contain the captions in all cases with the lowest number first, and be filed in both actions.

Plaintiff concedes that “it did not meet the procedural requirements of filing notice of this motion in the unlawful detainer cases or including the case captions from the unlawful detainer cases in this case.” (Reply at p. 2.) However, Plaintiff contends that it did initially comply with the rule because Plaintiff in the UD actions is represented by the same counsel in this case, and Plaintiff’s Counsel represents the defendants in the UD action.

Additionally, Plaintiff notes that notice of this Court’s order staying the UD cases was served in all three cases, and that shortly after receiving the Opposition, Plaintiff filed notices of related cases in all three cases and served a proper amended notice of motion on all parties in all three cases.

Accordingly, the Court finds that the procedural defects in Plaintiff’s initial motion have been rectified, and that they caused no prejudice to Defendants.

B.   Prejudice to Anchor

Next, Anchor argues that consolidation should be denied because it would cause prejudice to Anchor.

Anchor notes that the summary procedures of UD Court are intended to quickly restore the landlord’s possession of property, and that consolidation with the instant action would inherently require a slower process, thereby depriving them of full use of their property.

While the Court understands that consolidation will prejudice Anchor, allowing the UD Actions to proceed while litigation of the proper title to the Subject Property occurs simultaneously in this action would not only potentially prejudice Plaintiff, as it would preclude them from free use of their property, but would also risk duplicative efforts of the Court, and potential for conflicting rulings.

However, the Court will mitigate this prejudice to Anchor by requiring Plaintiff to produce a bond pursuant to California Code of Civil Procedure section 1170.5(c). Section 1170.5(c) states that if an unlawful detainer trial is not held later than the 20^th day following the date that the request to set the time of trial was made, and the parties do not stipulate to such extension:

The Court, upon finding that there is a reasonable probability that the plaintiff will prevail in the action, shall determined the amount of damages, if any, to be suffered by the plaintiff by reason of the extension, and shall issue an order requiring the defendant to pay that mount into court as the rent would have otherwise become due and payable. . .so long as the defendant remains in possession pending the termination of the action.

Here, the Court finds that there is a reasonable probability that Anchor will prevail in the UD action. Anchor calculates the loss in rent for a delay of approximately 18 to 24 months to cost “no less than $143,994.00.” (Zakaria Decl., ¶ 7.) Anchor also requests a bond to cover the reasonable expectation for defense cost, but as these costs would incur whether or not the instant motion to consolidate is granted, the Court will not require such a bond.

In response, Plaintiff argues that this amount is inflated, and that a bond of $50,000 is reasonable. The Court finds that a bond of $100,000 is reasonable, and orders that Plaintiff supply a bond in that amount upon issuance of this order.

C.  No Parties in Common

Finally, Anchor argues that consolidation is improper, as the “Plaintiff in the civil action is NOT A PARTY TO EITHER OF THE UNLAWFUL DETIAINER ACTIONS, and therefore, the outcome of the unlawful detainer action cannot affect the rights of Plaintiff in this civil action.” (Opposition at p. 12) (emphasis original.)

However, Anchor cites no authority stating that parties to two consolidated actions must be the same. Additionally, though Plaintiff is not a party to the UD actions, it contends that it is the proper title holder to the title of the Subject Property, so the litigation of the use of that property during the pendency of the instant action inherently affects its rights.

Accordingly, Plaintiff’s Motion to Consolidate the instant action with LA Superior Court case numbers 22STUD00257 and 22STUD00250 is GRANTED. Plaintiff is ordered to post $100,000 bond pursuant to Code of Civil Procedure section 1170.5(c) due to the delay in litigation of the underlying UD actions.

III.           MOTION FOR PRELIMINARY INJUNCTION

Finally, Plaintiff moves for a preliminary injunction staying the UD Actions pending termination of the instant action.

As Plaintiff’s Motion for Consolidation was granted, Plaintiff’s Motion for Preliminary Injunction is DENIED as moot.

DATED:  August 1, 2022

___________________________

Hon. Robert S. Draper 

Judge of the Superior Court