Judge: Ronald F. Frazier, Case: 37-2019-00018398-CU-SL-CTL, Date: 2023-08-18 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - August 17, 2023

08/18/2023  08:30:00 AM  C-65 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Ronald F. Frazier

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Civil - Unlimited  Securities Litigation Motion Hearing (Civil) 37-2019-00018398-CU-SL-CTL MABVAX THERAPEUTICS HOLDINGS INC VS HONING [E-FILE] CAUSAL DOCUMENT/DATE FILED: Motion for Leave to Amend, 07/25/2023

Honig and Stetson Defendants' Motion for Leave to Amend Answer is GRANTED. (ROA 2007.) Defendants seek leave of court to amend their answer to Plaintiff's Second Amended Complaint to assert one additional affirmative defense, for offset.

In opposition, Plaintiff asserts the amendment would be futile because Plaintiff previously filed for Chapter 11 bankruptcy and the bankruptcy court has entered an order confirming the liquidation plan that became effective on March 20, 2020.

As a preliminary matter, many facts are missing here. Plaintiff failed to provide the court with copies of any of the documents it references (i.e., the order establishing bar dates, the order confirming the liquidation plan, and proof of service of these orders on Defendants). Plaintiff implies Defendants made no claim against the bankruptcy estate, but does not actually state this.

Moreover, even assuming without supporting evidence that the facts are as Plaintiff asserts, they do not support a finding the proposed amendment is futile. Plaintiff cites legal authority which states 'offset cannot be used to revive in a state court proceeding a debt already discharged in bankruptcy.' (In re Marriage of Williams (1984) 157 Cal.App.3d 1215, 1224.) Here, however, Defendants do not seek to revive a discharged debt. In the event Plaintiff is ultimately successful in obtaining a damages award against Defendants, and further that Defendants are successful in proving facts to sufficient to demonstrate their offset defense, they would not be entitled to a damages award. An offset would serve only to reduce any award obtained by Plaintiff. Thus, Defendants could not be construed as 'creditors' of the bankruptcy estate.

Plaintiff further asserts it would be prejudiced by the amendment because further discovery would need to be conducted. However, Plaintiff identifies no specific discovery it would need to complete as a result of the amendment. Accordingly, the court is not persuaded Plaintiff would be prejudiced by the amendment.

Lastly, Plaintiff asserts the motion should be denied due to Defendants' unreasonable delay in bringing their motion. The delay is considerable; this action has been pending for more than four years.

However, in the absence of prejudice, this is not a sufficient basis upon which to deny leave to amend.

Defendants are to file their First Amended Answer on or before August 25, 2023. The court is permitting moving Defendants to file the proposed First Amended Answer contained in Exhibit E of Attorney Calendar No.: Event ID:  TENTATIVE RULINGS

2964680  9 CASE NUMBER: CASE TITLE:  MABVAX THERAPEUTICS HOLDINGS INC VS HONING [E-FILE]  37-2019-00018398-CU-SL-CTL Weber's declaration in to assert one additional affirmative defense for offset. Defendants are not permitted to make further amendments without leave of court.

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