Judge: Steven J. Kleifield, Case: 22STCV07985, Date: 2023-03-10 Tentative Ruling

Case Number: 22STCV07985    Hearing Date: March 10, 2023    Dept: 57

HILL v. GSHC LLC, 22STCV07985

TENTATIVE RULING ON MOTION OF DEFENDANTS FRIEDLAND AND ANDERSON TO FILE A CROSS-COMPLAINT

Defendants Jeff Friedland and Josh Anderson have moved for leave to file a cross-complaint against Plaintiff Harold Hill.  Hill’s complaint against Friedland, Anderson, and other defendants asserts claims based on the defendants’ alleged failure to comply with employment agreements related to services Hill performed for the defendants.  Friedland, Anderson, and their co-defendants have answered Hill’s complaint.  The proposed cross-complaint, which is attached to Friedland and Anderson’s motion, asserts claims based on alleged threats Hill has made to the lives of Friedland and Anderson.   Hill opposes the motion.  The Court’s tentative ruling is to grant the motion.

Friedland and Anderson filed their motion under Code of Civil Procedure Section 428.50(c), which governs leave for a defendant to file a permissive cross-complaint against the plaintiff after the defendant already has answered the plaintiff’s complaint.  Section 428.50(c) provides that “[l]eave may be granted in the interest of justice at any time during the course of the action.”  Trial courts have broad discretion in determining whether the interests of justice support granting leave to file a permissive cross-complaint. (Orient Handel v. United States Fid. & Guard. Co. (1987) 192 Cal.App.3d 684, 701.)  Critical factors in making that determination are significant delay, or lack thereof, by the putative cross-complainant in seeking leave and the proximity to the trial date if one has been set.  (Crocker National Bank v. Emerald (1990) 221 Cal.App.3d 852, 864.)   Applying those factors here, the record does not evince an unwarranted delay by Friedland and Anderson in seeking leave to file their cross-complaint.  Furthermore, the trial in this case is not slated to begin until more than a year from now, on June 3, 2024.  Under these circumstances, Section 428.50(c)’s interest of justice standard supports granting Friedland and Anderson leave to file their proposed cross-complaint.

In his opposition, Hill contends that Friedland and Anderson’s proposed cross-claims are compulsory rather than permissive, and that therefore Section 426.50, rather than Section 428.50 governs whether leave to file the cross-complaint should be granted.   Section 426.50 provides that a party who failed to plead a compulsory cross-claim, “whether through oversight, inadvertence, mistake, neglect or other cause, may apply to the court for leave . . . to file a cross-complaint at any time during the course of the action [if the party] acted in good faith.”  This provision has been construed to require “substantial evidence” of bad faith, the opposite of good faith, by the would-be cross-complainant in order for the court to deny leave to file the cross-complaint.  (Silver Organizations Ltd. v. Frank (1990) 217 Cal.App.3d 94, 99.)  Bad faith connotes “actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake . . . but by some interested or sinister motive[,] . . . not simply bad judgment or negligence, but rather . . . the conscious doing of a wrong because of a dishonest purpose or moral obliquity . . . . .”  [Citation]  (Id. at p. 100.)   A compulsory cross-claim is (1) “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,”(Section 426.10(c)), and (2) which existed as of the time the defendant answered the plaintiff’s complaint.  (Section 426.30(a)); see K.R.L. Partnership v. Superior Court (2004) 120 Cal.App.4th 490, 498 [distinguishing between permissive and compulsory cross-claims].)  Hill contends that Friedland and Anderson have acted in bad faith in seeking leave to file their cross-complaint and thus they failed to satisfy the Section 426.50 standard.  The Court disagrees.  Even if Hill is correct that Friedland and Anderson’s cross-claims are compulsory, the evidence that Hill presented in his opposition to the motion for leave to file the cross-complaint falls  short of the showing of bad faith that is necessary to support denial of the motion.

In sum, the standards for granting leave to file a cross-complaint have been met here, regardless of whether Friedland and Anderson’s cross-claims are treated as permissive or compulsory.   Friedland and Anderson are directed forthwith to file and serve the proposed cross-complaint attached to their motion.  Hill shall have 30 days from service of the cross-complaint to file a responsive pleading.