Judge: Salvatore Sirna, Case: 20PSCV00136, Date: 2022-10-24 Tentative Ruling

Case Number: 20PSCV00136    Hearing Date: October 24, 2022    Dept: A

Plaintiff Chuangwen Chen’s MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT

Respondent: NO OPPOSITION

TENTATIVE RULING

Plaintiff Chuangwen Chen’s motion for leave to file first amended complaint is GRANTED.

BACKGROUND

In this fraud action, Plaintiff Chuangwen Chen invested over one million dollars in Defendant Gary Gang Guo’s online retail business, only to later discover the Defendant was keeping the business profits for himself. On February 18, 2020, Plaintiff filed a complaint against Defendant and Does 1 through 20 inclusive, alleging the following causes of action:

1.   Breach of Fiduciary Duty

2.   Fraud

On September 21, 2022, Plaintiff filed a motion for leave to file a First Amended Complaint that added a cause of action for conversion and added Defendant’s wife, Sharon Ye (a.k.a. Mei Ye), as a defendant.

FSC is set for January 24, 2023, and trial is set for February 14, 2023.

ANALYSIS

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.) 

Discussion

Plaintiff seeks to 1) add Sharon Ye (a.k.a. Mei Ye) as a defendant, 2) allege a third cause of action for conversion against all Defendants, and 3) add general damages “inadvertently not included in the original complaint.” The court is not in receipt of any opposition from the Defendant.

Plaintiff’s counsel argues amendment is necessary and proper because the current causes of action are insufficient to give complete relief as he believes some of the allegedly embezzled funds were transferred to Ye as Defendant’s wife. (Thomas Decl., ¶ 3.) Plaintiff’s counsel also states the facts giving rise to the amended allegations were discovered when the business’s records were examined by its accountant, although he does not state when that happened and if this was the same review in April 2017 that led to the original complaint being filed. (Thomas Decl., ¶ 4; Complaint, ¶ 9.) In response to the question of why the amendment was not made earlier, Plaintiff’s counsel simply states “[t]he request was made upon discovery of the fraud and embezzlement.” (Thomas Decl., ¶ 5.)

While the declaration of the Plaintiff’s counsel does not adequately explain when the facts giving rise to the amendments were discovered and why the request was not made earlier, “leave to amend should be liberally granted” unless there is a showing of prejudice to the adverse party, such as the cost of additional preparation and discovery for delaying trial. (Miles v. City of Los Angeles (2020) 56 Cal.App.5th 728, 739.) The court finds the proposed amendment would not prejudice the Defendants, as no opposition has been filed.

The Motion is therefore GRANTED and the First Amended Complaint, attached to Plaintiff’s moving papers, is deemed filed this date.