Judge: Salvatore Sirna, Case: 19PSCV00678, Date: 2023-01-26 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, counsel are advised to check this website periodically to determine whether any changes or updates have been made to the tentative ruling. Counsel may submit on the tentative rulings by calling the clerk in Department G at (909) 802-1104 prior to 8:30 a.m. the morning of the hearing.

Case Number: 19PSCV00678    Hearing Date: January 26, 2023    Dept: G

Cross-Complainants William Wei Weng and Miao Li Feng’s Motion for Leave to File First Amended Cross-Complaint

Respondent: NO OPPOSITION

TENTATIVE RULING

Cross-Complainants William Wei Weng and Miao Li Feng’s Motion for Leave to File First Amended Cross-Complaint is GRANTED and deemed filed as of this date.

BACKGROUND

This is an action arising from a business dispute. On January 18, 2005, Da Zhen Health Services, Inc. (Da Zhen Health) was registered as a California corporation and was established to provide healthcare and daycare services for seniors. William Wei Weng and Miao Li Lily Weng (also referred to as Miaoli Feng or Miao Li Feng, collectively Cross-Complainants) were majority shareholders in Da Zhen Health. Plaintiff Mo Chen is a minority shareholder in Da Zhen Health. In 2019, Plaintiff alleges Cross-Complainants transferred all of Da Zhen Health’s business to Da Zhen Travel Agency, an entity owned and controlled by Cross-Complainants, without Plaintiff’s consent. Plaintiff also alleges Cross-Complainants misappropriated funds from Da Zhen Health for their own personal use.

On July 29, 2019, Plaintiff filed a verified complaint against Da Zhen Health, Cross-Complainants, and Does 1-20 inclusive, alleging causes of action for: (1) dissolution of Da Zhen Health, (2) breach of fiduciary duty, and (3) accounting.

On September 27, 2019, Cross-Complainants filed a cross-complaint against Da Zhen Health, Plaintiff, and Sheng Le Cheng (Cheng), alleging causes of action for: (1) dissolution of Da Zhen Health, (2) breach of fiduciary duty, and (3) accounting.

On August 7, 2020, Plaintiff was granted leave to file a First Amended Complaint (FAC) that was filed on October 22 against the same defendants as well as Da Zhen Travel, alleging causes of action for: (1) breach of fiduciary duty, (2) fraudulent concealment, (3) fraudulent transfer, (4) dissolution of Da Zhen Health, and (5) accounting.

On June 18, 2021, Plaintiff moved for summary adjudication on the fourth and fifth causes of action in Plaintiff’s FAC. On December 1, the court denied Plaintiff’s motion.

On December 29, 2022, Cross-Complainant filed the present motion. A hearing on the motion is set for January 26, 2023. Additionally, a mandatory settlement conference is set for June 15, a final status conference is set for July 12, and a non-jury trial is set for July 24.      

LEGAL STANDARD

“A court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading.” (Code of Civ. Proc., § 473, subd. (a)(1).) The court’s discretion will usually be exercised liberally to permit amendments of the pleadings. (Nestle v. City of Santa Monica (1972) 6 Cal.3d 920, 939.)¿“A motion to amend a pleading before trial must . . . [s]tate 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 [s]tate 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, rule 3.1324(a).)¿ The declaration must also specify the amendment’s effect, why it is necessary and proper, when the facts supporting the amended allegations were discovered, and why the request was not made earlier.¿ (Cal. Rules of Court, rule 3.1324(b).)¿¿¿ 

If the party seeking the amendment has needlessly delayed, and the delay has prejudiced the opposing party, the court has the discretion to deny leave to amend.¿ (See Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 490.)¿ Prejudice exists where the amendment would require delaying the trial, resulting in loss of critical evidence, or added costs of preparation.¿ (Solit v. Tokai Bank, Ltd. New York Branch (1999) 68 Cal.App.4th 1435, 1448.)¿ 

ANALYSIS

Cross-Complainants seek leave to file a First Amended Cross-Complaint (FACC) that alleges an additional claim for recission of contract based on fraud. The court finds good cause to permit the filing.

Cross-Complainants provide that the effect of the amendment is to add a fourth cause of action for recission of contract and does not otherwise substantively alter the other allegations made in the original cross-complaint. Cross-Complainants also note that the cross-complaint already pleads facts establishing Cross-Defendants’ intentional concealment. Cross-Complainants do not specifically argue why amendment is necessary and proper but suggest good cause exists because Cross-Complainants’ new claim arises out of the same events and will have to be filed in a separate action if leave to amend is not granted. Cross-Complainant William Wei Weng also states uncertainty as to why former counsel did not plead a cause of action for fraud in the original cross-complainant.

The court finds Cross-Complainants have established sufficient grounds to support amendment and now considers any prejudice to Cross-Defendants. While the amendment will allege an additional cause of action, the court notes it is based on the same or similar facts alleged in the original cross-complaint. And while trial is set for July 2023, the court notes discovery is ongoing and should not be significantly delayed by a new allegation. Lastly, the court is not in receipt of any timely opposition from Cross-Defendants.

Accordingly, the court GRANTS Cross-Complainants’ motion.

CONCLUSION

Based on the foregoing, Cross-Complainants’ motion for leave to file a FACC is GRANTED and the FACC attached as Exhibit B to Cross-Complainants’ motion is deemed filed as of this date.