Judge: Serena R. Murillo, Case: 19STCV42998, Date: 2022-12-09 Tentative Ruling

DEPARTMENT 29 - LAW AND MOTION RULINGS IMPORTANT  (PLEASE SEND YOUR E-MAIL TO DEPT. 29 NOT DEPT. 2)

Communicating with the Court Staff re the Tentative Ruling 1. Please notify the courtroom staff by email not later than 9:30 a.m. on the day of the hearing if you wish to submit on the tentative ruling rather than argue the motion. The email address is SSCDEPT29@lacourt.org. Please do not use any other email address. 2. You must include the other parties on the email by "cc." 3. Include the word "SUBMISSION" in all caps in the Subject line and include your name, contact information, the case number, and the party you represent in the body of the email. If you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the motions. THE COURT WILL HEAR ARGUMENT UNLESS BOTH SIDES SUBMIT ON THE TENTATIVE.  4. Include the words "SUBMISSION BUT WILL APPEAR" if you submit, but one or both parties will nevertheless appear. 5. For other communications with Court Staff a. OFF-CALENDAR should appear in all caps in the Subject line where all parties have agreed to have a matter placed off-calendar. All counsel should be cc'ed (and where appropriate parties not represented by counsel) and the body of the email should state: (a) name and case number; (b) date of proceeding. b. CASE SETTLED should appear in all caps in the Subject line where all parties have agreed that the case has settled for all purposes. All counsel should be cc'ed (and where appropriate parties not represented by counsel) and the body of the email should state: (a) name and case number; (b) whether notice of settlement/dismissal documents have been filed; (c) if (b) has not been done, a date one year from the date of your email which will be a date set by the court for an OSC for dismissal of the case. c. STIPULATION should appear in all caps in the Subject line where all parties have stipulated that a matter before the court can be postponed. All counsel should be cc'ed (and where appropriate parties not represented by counsel) and the body of the email should state: (a) name and case number; (b) what proceeding is agreed to be postponed e.g. Trial, FSC; (c) the agreed-upon future date; (d) whether all parties waive notice if the Court informs all counsel/parties that the agreed-upon date is satisfactory. This communication should be used only for matters that are agreed to be postponed and not for orders shortening time. 6. PLEASE MAKE SURE THAT ALL COMMUNICATIONS WITH COURT STAFF DEAL ONLY WITH SCHEDULING AND ADMINISTRATIVE MATTERS AND DO NOT DISCUSS THE MERITS OF ANY CASE. (UPDATED 6/17/2020) 

IMPORTANT:  In light of the COVID-19 emergency, the Court encourages all parties to appear remotely.  The capacity in the courtroom is extremely limited.  The Court appreciates the cooperation of counsel and the litigants. 

ALSO NOTE:  If the moving party does not contact the court to submit on the tentative and does not appear (either remotely or in person), the motion will be taken off calendar.  THE TENTATIVE RULING WILL NOT BE THE ORDER OF THE COURT.

Case Number: 19STCV42998    Hearing Date: December 9, 2022    Dept: 29

TENTATIVE

Defendant Maria Del Carmen Ramirez’s motion for leave to file a cross-complaint against Defendant Gabriela Ochoa Jasso is GRANTED.

Legal Standard

CCP § 428.10 provides that a party against whom a cause of action has been asserted may file a cross-complaint setting forth:  “(b) Any cause of action he has against a person alleged to be liable thereon, whether or not such person is already a party to the action, if the cause of action asserted in his cross-complaint (1) arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause brought against him or (2) asserts a claim, right, or interest in the property or controversy which is the subject of the cause brought against him.”  (CCP § 428.10(b).) A party shall obtain leave of court to file a cross-complaint if it is not concurrently filed with the answer or at any time before the court sets a trial date. Leave may be granted in the interest of justice at any time during the course of the action.  (CCP § 428.10(c).)

If a cross-complaint is compulsory, leave must be granted as long as the cross-complainant is acting in good faith, so as to avoid forfeiture of the causes of action. (C.C.P. §426.50; See Silver Organizations, Ltd. v. Frank (1990) 217 Cal.App.3d 94, 101 (concluding that the late filing of the motion to file a compulsory cross-complaint absent some evidence of bad faith is insufficient evidence to support denial of the motion).) To be considered a compulsory cross-complaint, the related cause of action must have existed at the time defendant served its answer to the complaint. (Weil & Brown, California Practice Guide (2008), Civil Procedure Before Trial §6:516; See also Crocker Nat’l Bank v. Emerald (1990) 221 Cal.App.3d 852, 864.) If the cross-complaint is not compulsory, but rather is permissive, the Court has sole discretion whether to grant or deny leave. (Id.)

“A party who fails to plead a cause of action subject to the requirements of this article, whether through over-sight, inadvertence, mistake, neglect, or other cause, may apply to the court for leave to amend his pleading, or to file a cross-complaint, to assert such cause at any time during the course of the action.”  (CCP § 426.50.)  The Court shall grant such a motion if the moving party acted in good faith.  (CCP § 426.50.)   

The determination that the moving party acted in bad faith must be supported by substantial evidence.  (Foot's Transfer & Storage Co. v. Superior Court (1980) 114 Cal.App.3d 897 (evidence insufficient to support trial court's denial of motion to file cross-complaint notwithstanding that defendant waited 23 months after service of complaint and 16 months after filing answer before asserting right to file cross-complaint, where nothing in record suggested that defendant was unusually reprehensible with regard to delay, plaintiff waited for two years to file action, and plaintiff’s counsel equivocated concerning stipulation allowing the filing of cross-complaint at same time counsel conducted discovery concerning the claim defendant sought to assert in the cross-complaint).)   

At minimum, a very strong showing of bad faith on the part of the defendant is required before a court will be justified in denial of leave to file or amend a cross-complaint.  (Sidney v. Superior Court (1988) 198 Cal.App.3d at 710, 718.)  The burden of showing bad faith rests on the party opposing the allowance of the cross-complaint.  (Silver Organizations Ltd. v. Frank (1990) 217 Cal.App.3d 94.)  

A determination that the petitioner acted in bad faith may be premised on “substantial injustice or prejudice” to the opposing party. (Foot's Transfer & Storage Co. v. Superior Court, 114 Cal.App.3d at 903; See also Gherman v. Colburn (1977) 72 Cal.App.3d 544, 558-59 (stating that leave was properly denied when the defendant’s motion “was merely a tactical strategic maneuver to deprive plaintiffs of a right to a jury trial”).)

Discussion

Defendant Ramirez moves to file a cross-complaint against Defendant Jasso for equitable indemnity, contribution, express indemnity, and declaratory relief. Defendant Ramirez argues this is a compulsory cross-complaint as it arises out of the same occurrence and thus, the motion must be granted as long as Defendant is acting in good faith. Defendant Ramirez asked Defendant Jasso to stipulate to the filing of the cross-complaint but Jasso refused.

The Court finds that the cross-complaint is compulsory because it arises out of the same occurrence, namely, Plaintiff’s fall over a raised strip at Defendant Ramirez’s premises. Thus, there must be substantial evidence that Defendant Ramirez acted in bad faith to justify a denial of its motion to file a cross-complaint.

Defendant Jasso argues that Ramirez is seeking to file a cross-complaint against Jasso, who is neither a plaintiff or cross-complainant and therefore the proposed cross-complaint is permissive. However, CCP section 428.10 states: A party against whom a cause of action has been asserted in a complaint or cross-complaint may file a cross-complaint setting forth either or both of the following:

(a) Any cause of action he has against any of the parties who filed the complaint or cross-complaint against him.

(b) Any cause of action he has against a person alleged to be liable thereon, whether or not such person is already a party to the action, if the cause of action asserted in his cross-complaint (1) arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause brought against him or (2) asserts a claim, right, or interest in the property or controversy which is the subject of the cause brought against him.

As such, Defendant Jasso’s reliance on CCP 428.10(a), solely, is based on a misinterpretation of the statute. Further, to be considered a compulsory cross-complaint, the related cause of action must have existed at the time defendant served its answer to the complaint. (Weil & Brown, California Practice Guide (2008), Civil Procedure Before Trial §6:516; See also Crocker Nat’l Bank v. Emerald (1990) 221 Cal.App.3d 852, 864.) Additionally, “Cross-complaints for comparative equitable indemnity would appear virtually always transactionally related to the main action.”  (Time for Living, Inc. v. Guy Hatfield Homes (1991) 230 Cal.App.3d 30, 38.) 

Defendant Jasso also argues that Defendant Ramirez filed this motion for leave a year and a half after Defendant Ramirez answered the Complaint. Defendant Jasso argues that Defendant Ramirez’s motion fails to address why her untimely proposed cross-complaint would not prejudice Defendant Jasso, or why granting leave to file the cross-complaint is in the interests of justice. Instead, Defendant Jasso contends, the proposed equitable indemnity claim, and motion itself, is based upon Defendant Ramirez attempt to enforce an indemnity agreement where one does not exist. The discovery cutoff in this matter is on March 29, 2023, with a trial date of April 13, 2023. At the time of this hearing, Defendant Jasso will have only three months to complete the discovery necessary to defend herself against Co-Defendant Ramirez’s untimely claims. By this point, the parties have already engaged in discovery and Plaintiff has been deposed.

Defendant Ramirez argues in reply that it was a year after the matter was at issue that Ramirez’s new counsel, Demler, Armstrong & Rowland, LLP, substituted in as her defense counsel on January 28, 2022. (Hurwitz Dec. ¶2.) At this point, new counsel was able to review the file and information in its entirety. As part of new counsel’s investigation, the deposition of Ochoa went forward on May 19, 2022, and the second deposition of plaintiff took place on May 3, 2022, and May 24, 2022 – with the full participation of Ochoa. (Hurwitz Dec. ¶2.) Upon completion of these three depositions, Ramirez’s new counsel, Demler, Armstrong & Rowland, requested that all parties stipulate to allow Ramirez to file a cross-complaint against Ochoa on June 14, 2022. (Motion pg. 2, Ex. B.) When Ochoa did not respond to the request for a stipulation, Ramirez moved forward with filing this motion on July 25, 2022. Unfortunately, the earliest available hearing date was December 9, 2022, and when Ramirez moved ex parte to advance the hearing to an earlier date, on July 28, 2022, it was denied. (Hurwitz Dec. ¶3.) Thus, Ramirez argues Defendant Jasso was not prejudiced as she knew since June that Ramirez intended to file a cross-complaint and could have, and was invited to, conduct discovery.

The Court finds that Defendant Jasso has not made any showing of bad faith. Further, the petitioner in Foot's Transfer & Storage Co. v. Superior Court (1980) 114 Cal.App.3d 897 waited 23 months after service of the complaint, and 16 months after it had filed its answer to the complaint, before asserting the right to file a cross-complaint. The court stated that it had “no doubt that petitioner…as defendants are sometimes wont to do, engaged in as much delay in this litigation as possible. But section 426.50 however, expressly mentions a party's ‘neglect’ as one circumstance under which relief may be given. There is nothing in the record before us which suggests that petitioner was unusually reprehensible in this regard.” (Foot's Transfer & Storage Co. v. Superior Court (1980) 114 Cal.App.3d 897.)

As such, the motion must be granted.

Lastly, Defendant Jasso argues that the cross-complaint’s cause of action for express indemnity fails to state a valid cause of action. Defendant Jasso argues that California courts have considered the validity of a proposed pleading when determining whether to grant leave to file such a pleading and found where a proposed amended pleading fails to state a valid cause of action, denying leave is proper. (See Foxborough v. Van Aua (1994) 26 Cal.App.4th 217.) However, that is the standard for a motion for leave to amend the complaint, and not for a motion for leave to file a cross-complaint. The two standards are different. Defendant Jasso has not cited any authority which states a court may consider the validity of a proposed pleading in connection with a motion for leave to file a cross complaint. As such, the Court declines to consider the validity of the proposed cross-complaint, and Defendant Jasso may instead elect to file a demurrer or motion for summary judgment as to the cross-complaint.

Conclusion

Therefore, in view of the well-established liberality with which CCP section 426.50 is to be applied, Defendant Ramirez’s motion for leave to file a cross-complaint against Defendant Jasso is GRANTED.

Moving party is ordered to give notice.