Judge Serena R. Murillo, Case 22STCV32931 2023-04-21 Tentative Ruling

Judge: Serena R. Murillo, Case: 22STCV32931, Date: 2023-04-21 Tentative Ruling

Case Number: 22STCV32931 Hearing Date: April 21, 2023 Dept: 29

TENTATIVE

Defendant JMDG European Design LLC’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”).)

Discussion

Defendant moves to file a cross-complaint against Defendant Leybovich and Arko Enterprise Inc., dba A1 Construction & Remodeling (Arko) for indemnity, apportionment of fault, and declaratory relief. Defendant argues this is a compulsory cross-complaint as it arises out of the same occurrence and thus, the motion must be granted as Defendant is acting in good faith. Defendant JMDG only recently learned of the identity of the cross-defendants, and the facts supporting the cross-complaint. Defendant JMDG had contracted with Defendant Leybovich to design and install cabinetry in the kitchen and adjacent to a bathroom at the home owned by Defendant Leybovich as part of a home remodeling. JMDG then sub-contracted the installation of the bathroom cabinetry to Arko, which went to the home approximately three weeks before the accident to perform the installation and work at the home. Plaintiff alleges Defendant JMDG is liable to her for the accident despite Defendant JMDG being at Defendant Leybovich’s home three weeks prior to the incident. During that three weeks, Defendant Leybovich had others perform construction work in the subject area of the home where Plaintiff alleges the incident occurred. Most importantly, Defendant JMDG performed no work at Defendant Leybovich’s home. Defendant JMDG merely took measurements and ordered the cabinetry that Defendant Leybovich purchased for his home. To date, Defendant JMDG still does not know the identity of the flooring contractor that Defendant Leybovich hired and performed work in the subject area after Defendant JMDG left the premises.

The Court finds that the cross-complaint is compulsory because it arises out of the same occurrence, namely, Plaintiff’s fall at her home when plywood that was covering a removed-cabinet collapsed. Thus, there must be substantial evidence that Defendant acted in bad faith to justify a denial of its motion to file a cross-complaint.

Plaintiff strongly opposes, arguing that a trial preference was granted in this matter and trial is set for May 31, 2023. She argues that a month before trial, Defendant JMDG files this Motion seeking leave to file cross complaints against Leybovich and Arko, a company that Defendant JMDG subcontracted to perform the very construction work at issue in Plaintiff’s Complaint. While JMDG argues it only “recently learned” of the need to file cross complaints against Benjamin Leybovich and Arko, Plaintiff contends this is patently false. Defendant JMDG was on notice that it could have filed a cross complaint against both Benjamin Leybovich and Arko from day one of this lawsuit.

However, a late filing of a motion for leave to file a compulsory cross-complaint is not sufficient to support denial of the motion absent some evidence of bad faith. A finding of bad faith requires evidence of “dishonest purpose, moral obliquity, sinister motive, furtive design, or ill will.” (Silver Orgs, supra, 217 Cal.App.3d at p. 100.) Evidence of oversight, inadvertence, neglect, or mistake is, by itself, insufficient to establish bad faith. (Id. at 99; see Code Civ. Proc., § 426.50.) The Court finds that there has been no showing of bad faith, and Plaintiff does not even argue there was bad faith. 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.) Defendant explains that it has only appeared in this case for 75 days and needed to familiarize itself with the lawsuit, and it did not wish to bring a cross-complaint needlessly and without justification at the time the answer was filed, as it was genuinely ignorant of cross-defendant’s identity and legal theory upon which cross-defendant could have been named. The Court finds the worst Defendant may be charged with is neglect, but there is no evidence of bad faith.

Lastly, Defendant argues that the parties can stipulate to extend discovery cut off dates. Defendant does not ask for a trial continuance. By statute, a trial for preference may be continued for two weeks if Plaintiff pleases.

As such, the motion must be granted.

Conclusion

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

Moving party is ordered to give notice.