Judge: Serena R. Murillo, Case: 21STCV09301, Date: 2022-12-12 Tentative Ruling
Case Number: 21STCV09301 Hearing Date: December 12, 2022 Dept: 29
TENTATIVE
Defendant Alcorn
Fence Company’s motion for leave to file a cross-complaint
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”).)
Judicial
Notice
Defendant seeks
judicial notice of Plaintiff’s complaint, its answer, and its substitution of
attorney. The requests are GRANTED pursuant to Evidence Code section 452(d).
Discussion
Defendant
Alcorn Fence moves to file a cross-complaint against Global
Environmental Network, Inc. At the time it answered the complaint, counsel for
Alcorn Fence had not yet completed its investigation regarding the facts
surrounding the underlying incident, including obtaining all of the relevant
contracts concerning the repair work. The combined job files from the City, the
County and Alcorn Fence are voluminous, consisting of thousands of pages of
documents. Upon completing the review of Alcorn Fence’s job file, defense
counsel discovered that Alcorn Fence had subcontracted with Global
Environmental Network, in part, for weekly inspections of the construction
site. Moreover, the contract between Alcorn Fence and Global required Global to
defend, indemnify and hold Alcorn Fence harmless against any liability arising
from Global’s performance or non-performance of the contracted services.
Defense counsel promptly filed the present motion immediately upon discovering
that Alcorn Fence had a meritorious claim against Global Environmental. The
Court should grant Alcorn Fence’s motion given that its proposed
cross-complaint will result in no prejudice to any party because adding Global
Environmental as a party will not expand the issues in this case. Moreover, the
City of Malibu will be filing a ROE amendment naming Global Environmental as
well. Finally, Alcorn Fence has not been dilatory in seeking to file a
cross-complaint, as it did so immediately after discovering Global
Environmental’s potential liability in this matter.
The Court finds that the cross-complaint is compulsory
because it arises out of the same occurrence, namely, Plaintiff’s motorcycle
collision. “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.) Thus, there must be substantial
evidence that Defendant Alcorn acted in bad faith to justify a denial of its
motion to file a cross-complaint.
The Court finds that no party has made any showing of bad
faith.
As such, the
motion must be granted.
Conclusion
Therefore, Defendant Alcorn’s motion for leave to file a
cross-complaint is GRANTED.
Moving party is ordered to give notice.