Judge Salvatore Sirna, Case Number: 20PSCV00422, Date: 2023-08-07 Tentative Ruling

Judge: Salvatore Sirna, Case: 20PSCV00422, Date: 2023-08-07 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: 20PSCV00422 Hearing Date: August 7, 2023 Dept: G

Defendant Zhe Shi’s Motion for Leave to File Cross-Complaint

Respondent: NO OPPOSITION

TENTATIVE RULING

Defendant Zhe Shi’s Motion for Leave to File Cross-Complaint is GRANTED and Defendant is ordered to file the proposed Cross-Complaint in Defendant’s motion separately with the court forthwith.

BACKGROUND

This is an action for breach of lease agreement. On September 3, 2019, Plaintiff Puente Hills Business Center II, L.P. entered into a written lease agreement with Defendant Zhi Liu (Liu) in which Liu agreed to lease a property in the City of Industry from Plaintiff for a two-year term. Defendant Zhe Shi (Shi) executed a guaranty in support of the lease agreement. Subsequently, Liu failed to make rent payments and abandoned the property on May 27, 2020.

On June 30, 2020, Plaintiff filed a complaint against Liu and Shi alleging (1) breach of written lease agreement, (2) breach of written guaranty, and (3) common counts.

On July 13, 2023, Shi filed the present motion. A hearing on the motion is set for August 7 along with an OSC Re: Striking of Defendant’s Answer/Sanctions and a trial setting conference.

ANALYSIS

Shi seeks leave to file a cross-complaint against Liu and Roes 1-10 that alleges (1) equitable indemnity, (2) contribution, (3) declaratory relief, (4) fraudulent misrepresentation, (5) unjust enrichment, and (6) breach of contract. For the following reasons, the court agrees.

Legal Standard

Pursuant to Code of Civil Procedure section 428.50, subdivision (a), a party is entitled to “file a cross-complaint against any of the parties who filed the complaint or cross-complaint against him or her before or at the same time as the answer to the complaint or cross-complaint.” Furthermore, “[a]ny other cross-complaint may be filed at any time before the court has set a date for trial.” (Code Civ. Proc., § 428.50, subd. (b).) If a cross-compliant is not filed within these guidelines, it may only be filed with leave of the court, who may grant it “in the interest of justice at any time during the course of the action.” (Code Civ. Proc., § 428.50, subd. (c).

A cross-complaint is compulsory when a related cause of action existed at the time of serving the defendant’s answer to the complaint. (Code Civ. Proc., § 426.30, subd. (a); see also Crocker Nat. Bank v. Emerald (1990) 221 Cal.App.3d 852, 864.) A “‘[r]elated cause of action’ means a cause of action which arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause of action which the plaintiff alleges in his complaint.” (Code Civ. Proc., § 426.10, subd. (c).) Leave must be granted to file a compulsory cross-complaint when the defendant is acting in good faith. (See Code Civ. Proc., § 426.50.)

“[W]hat constitutes ‘good faith’—or lack of it—under Code of Civil Procedure Section 426.50 must be determined in light of and in conformity with the liberality conferred upon the trial courts by the section and by prior law. … [T]his principle of liberality requires that a strong showing of bad faith be made in order to support a denial of the right to file a cross-complaint under this section.” (Foot’s Transfer & Storage Co. v. Superior Court (1980) 114 Cal.App.3d 897, 902.) A determination of bad faith may be premised on “substantial injustice or prejudice” to the opposing party. (Id., at p. 903; see also Gherman v. Colburn (1977) 72 Cal.App.3d 544, 560, fn. 9 [stating leave was properly denied where defendant’s motion “was merely a tactical strategic maneuver to deprive plaintiffs of a right to a jury trial”].)

Discussion

Shi argues this motion is brought in good faith because counsel was recently retained for Shi on July 6, 2023—two weeks before trial was set on July 21, 2023—and quickly discovered Shi had multiple grounds for a cross-compliant against co-defendant Liu. (Motion, p. 4:15-21; Kang Decl., ¶ 2-4.) Shi argues denial of Shi’s motion will be severely prejudicial to Shi and contends the granting of Shi’s motion would not prejudice Plaintiff. The court is not in receipt of any timely opposition from Plaintiff.

As discussed above, Code of Civil Procedure section 426.50 is liberally construed in favor of granting a motion to file a cross-complaint and such a motion should be granted unless the moving party acts in bad faith. Accordingly, because the court discerns no bad faith on Shi’s part, the court GRANTS Shi’s motion.

CONCLUSION

Based on the foregoing, Shi’s motion for leave to file a cross-complaint is GRANTED and Shi is ordered to file the proposed cross-complaint in Shi’s motion separately with the court forthwith.