Judge: Stephen P. Pfahler, Case: 23STCV18866, Date: 2024-02-07 Tentative Ruling

Case Number: 23STCV18866    Hearing Date: February 7, 2024    Dept: 68

Dept. 68

Date: 2-7-24 a/f 3-7-24

Case # 23STCV18866

Trial Date: 2-10-25

LEAVE TO AMEND

MOVING PARTY: Plaintiff, Creditors Adjustment Bureau, Inc.

RESPONDING PARTY: Unopposed/Defendant, Prime Executive Cars, LLC

RELIEF REQUESTED

Motion for Leave to Amend to File a First Amended Complaint

SUMMARY OF ACTION & PROCEDURAL HISTORY

Assignor State Compensation Insurance Fund provided workers compensation insurance to defendant Prime Executive Cars, LLC on August 15, 2022 and October 16, 2022. The policy premiums totaled $214,151.68 ($151,801.22 + $62,350.46). No portion of the policies were paid. State Compensation Insurance Fund assigned the debt to plaintiff Creditors Adjustment Bureau for collection.

On August 9, 2023, plaintiff filed a complaint for breach of contract, open book account, account stated, and reasonable value. Defendant answered on November 15, 2023.

RULING: Granted

Plaintiff Creditors Adjustment Bureau, Inc. moves for leave to file a first amended complaint. Plaintiff moves for leave in order to add additional an additional claim for treble damages. Defendant in opposition challenges the motion on grounds that the proposed amended complaint comes in “bad faith” in that the proposed amended complaint constitutes a “sham” pleading in that said claims are “false” and only presented for the purpose of “intimidation.” Defendant also claims prejudice as a result of the proposed amendment, and that the subject amendment, if filed, would be subject to sanctions under Code of Civil Procedure section 128.7. Plaintiff in reply emphasizes the liberal pleading standard for amendments, and denies any showing of prejudice or bad faith. Plaintiff also challenges any request for 128.7 sanctions.

A motion for leave to amend must comply with the requirements set forth in California Rules of Court Rule 3.1324, which states as follows:

“(a)      Contents of motion

A motion to amend a pleading before trial must:

(1)               Include a copy of the proposed amendment or amended pleading, which must be serially numbered to differentiate it from previous pleadings or amendments;

(2)               State 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

(3)               State 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.

(b)        Supporting declaration

A separate declaration must accompany the motion and must specify:

(1)        The effect of the amendment;

(2)        Why the amendment is necessary and proper;

(3)        When the facts giving rise to the amended allegations were discovered; and

(4)               The reasons why the request for amendment was not made

earlier…” (emphasis added).

Dilatory delays and prejudice to the opposing parties is a valid ground for denial. (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 such as an increased burden of discovery. (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 486-488.)

Leave to amend is generally liberally granted. (Code Civ. Proc., § 473(a); Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 296.) The court will not generally consider the validity of the proposed amended pleading in ruling on a motion for leave, instead deferring such determinations for a demurrer or motion to strike, unless the proposed amendment fails to state a valid claim as a matter of law. (Kittredge Sports Co. v. Sup.Ct. (Marker, U.S.A.) (1989) 213 Cal. App.3d 1045, 1048; California Casualty Gen. Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274, 280–281 disapproved of on other grounds by Kransco v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390.)

The motion was filed approximately four months after the initial complaint, and lacks any specific explanation for the timing of the motion. [Declaration of Kenneth Freed.] The court finds the motion is sufficiently supported, and the delay explained in context of later discovery of facts upon proceeding with collection efforts. (See Hataishi v. First American Home Buyers Protection Corp. (2014) 223 Cal.App.4th 1454, 1469.) The vociferous counter arguments, while very strongly advocated, improperly rely on extrinsic inference beyond the scope of the pleadings. (See Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604.)

The court in its discretion further finds any claimed prejudice insufficiently outweighs the liberal policy for leave to amend. The trial remains more than one year away, thereby allowing the parties sufficient time to adjudicate any potential arguments pre-trial. (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 486-487; Hulsey v. Koehler (1990) 218 Cal.App.3d 1150, 1159.) If Plaintiff had pled the subject claim for damages in the initial complaint, the court would still be in the same position of leaving it up to Defendant to challenge the alleged pleading regardless of any pre-litigation negotiations or strategic positions.

The motion is therefore granted. Moving party to file a separate copy of the first amended complaint within 10 days of the order.

Trial date of February 10, 2025.

Plaintiff to give notice.