Judge: Teresa A. Beaudet, Case: 20STCV08655, Date: 2022-10-11 Tentative Ruling

Case Number: 20STCV08655    Hearing Date: October 11, 2022    Dept: 50

PLEASE NOTE THAT THE HEARING WILL BE AT 10 A.M. NOT 11 A.M.

Superior Court of California

County of Los Angeles

Department 50

Background

On March 2, 2020, Plaintiff Shahram “Ray” Golbari (“Golbari”) filed this action against Defendant Saeid “Steve” Aminpour (“Aminpour”). The operative Second Amended Complaint (“SAC”) was filed on April 30, 2021 and asserts causes of action for (1) equitable indemnity, (2) contribution, (3) apportionment, and (4) to set aside and recover fraudulent conveyances.

On September 14, 2020, Aminpour filed a Cross-Complaint against Golbari, Petite Note Group, LLC, and LA Properties Investment, Inc., asserting causes of action for (1) breaches of fiduciary duties, (2) demand and claim for distribution, (3) conversion, (4) constructive trust, (5) requests and demands for inspection and documents, (6) common count for money loaned, (7) to void and recover voidable transfers, and (8) to void and recover voidable transfers.

On October 30, 2020, Golbari filed an Answer to the Cross-Complaint.   

On September 8, 2022, Golbari filed an ex parte application for an order shortening time to hear Golbari’s motion to amend his answer. On September 12, 2022, the Court issued a minute order granting the ex parte application in part. The September 12, 2022 minute order provides, inter alia, “Golbari’s ex parte application shall serve as his moving papers on the motion and any opposition to the motion shall be filed and served per Code. Any reply in support of the motion shall be filed and served per Code. Courtesy copies of the opposition and reply are to be lodged in Department 50 concurrently with the filing of the briefs.”

Golbari moves for leave to file an amended answer to the Cross-Complaint. Aminpour opposes.

Discussion

Pursuant to Code of Civil Procedure section 473(a)(1), “[t]he court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading.” Amendment may be allowed at any time before or after commencement of trial. (Code Civ. Proc., § 576.)  “[T]he court’s discretion will usually be exercised liberally to permit amendment of the pleadings. The policy favoring amendment is so strong that it is a rare case in which denial of leave to amend can be justified.” (Howard v. County of San Diego (2010) 184 Cal.App.4th 1422, 1428 [internal citations omitted].) “If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend….”   (Morgan v. Sup. Ct. (1959) 172 Cal.App.2d 527, 530.) Prejudice includes “delay in trial, loss of critical evidence, or added costs of preparation.” (Solit v. Tokai Bank, Ltd. New York Branch (1999) 68 Cal.App.4th 1435, 1448.)

Golbari seeks to amend his answer to add Code of Civil Procedure section 360 to his list of asserted statute of limitation defenses. Golbari asserts that in his closing brief in connection with trial in this matter, his counsel “pointed out that Code of Civil Procedure section 360 precludes enforcement of the type of promise Mr. Aminpour alleged without a writing signed by Mr. Golbari. In response to that brief, [counsel for Aminpour] filed a reply closing brief in which he noted that specific Code section was not included within Golbari’s Answer, and he argued the defense had been ‘waived.’ I then notified [counsel for Aminpour] of my intent to seek ex parte relief to secure an order from this Court permitting amendment of Golbari’s Answer to expressly include Code of Civil Procedure section 360 among the other Code section identified in that affirmative defense within the Answer.” (Vivoli Decl., ¶ 4.) Golbari asserts without citing to any supporting evidence in connection with the motion that “Section 360 is one that is rarely applicable and was innocently overlooked when Golbari’s answer was filed.” (Mot. at p. 6:7-8.)[1]

As an initial matter, Aminpour asserts that Golbari has not cited any case in which a defendant was permitted to amend an answer after trial. As Aminpour notes, California Rules of Court, rule 3.1324 contains requirements applicable to “[a] motion to amend a pleading before trial.” (Cal. Rules of Court, rule 3.1324, subd. (a), emphasis added.) But in the motion, Golbari cites to Walsh v. Hooker & Fay (1963) 212 Cal.App.2d 450, 454, in which the Court of Appeal found that “Section 473 of the Code of Civil Procedure authorizes the trial court, in its discretion, to allow amendments to any pleading, in furtherance of justice. In 2 Witkin, California Procedure 1605, Pleading, section 594, it is stated: The policy of great liberality in permitting amendments at any stage of the proceeding was declared at an early date and has been repeatedly restated….The same treatise states (§ 597): An amendment after the conclusion of the trial, with the evidence in and arguments completed, is permissible . . . [to] conform to proof, without introducing new evidence. Here the rule is extremely liberal.” (Internal quotations omitted.) 

Golbari seeks to add Code of Civil Procedure section 360 his statute of limitations affirmative defense. Section 360 provides as follows:

“No acknowledgment or promise is sufficient evidence of a new or continuing contract, by which to take the case out of the operation of this title, unless the same is contained in some writing, signed by the party to be charged thereby, provided that any payment on account of principle or interest due on a promissory note made by the party to be charged shall be deemed a sufficient acknowledgment or promise of a continuing contract to stop, from time to time as any such payment is made, the running of the time within which an action may be commenced upon the principal sum or upon any installment of principal or interest due on such note, and to start the running of a new period of time, but no such payment of itself shall revive a cause of action once barred.” (Code Civ. Proc., § 360.) 

Golbari asserts that “[d]uring trial, Mr. Aminpour claimed that even though the statute of limitations on his oral note claim against Mr. Golbari had expired years before, Mr. Golbari purported[sic] orally promised Aminpour that Golbari would pay the remining[sic] portion owed on the note ‘after the AAA case was over.’” (Vivoli Decl., ¶ 3.) Golbari asserts that the proposed amendment to his answer thus “requires no further briefing or evidence, since Aminpour’s testimony at trial was unequivocal that he seeks to enforce an alleged oral promise to revive a time-barred obligation, which Code of Civil Procedure section 360 expressly prohibits absent a writing, signed by Golbari as the party sought to be charged with it.” (Mot. at p. 7:10-13, emphasis omitted.)

In the opposition, Aminpour asserts that “[t]he Supreme Court has ruled that section 360 does not require that the acknowledgement or promise itself be in writing,” citing to Searles v. Gonzalez (1923) 191 Cal. 426. But in Searles, the California Supreme Court noted that Code of Civil Procedure section 360 “provides that no acknowledgment or promise is sufficient evidence of a new or continuing contract, by which to take the case out of the operation of the statute of limitations, unless the acknowledgment or promise is contained in some writing, signed by the party to be charged thereby.” (Id. at p. 427, emphasis added.)

Aminpour also notes that in the Cross-Complaint filed on September 14, 2020, he alleges that “[s]hortly after the AAA case was filed, Golbari orally acknowledged and affirmed the $152,000 debt to Aminpour and promised Aminpour that he would repay the remaining $152,000 after the AAA case was ‘over’.” (Cross-Compl., ¶ 25.) Aminpour alleges that “[t]he AAA case was over when it was dismissed with prejudice on September 27, 2018, but Golbari failed to repay the remaining $152,000.” (Cross-Compl., ¶ 26.) Aminpour further alleges that “[i]n November 2019, Golbari in a conversation with Aminpour orally acknowledged and affirmed the debt and orally agreed again that he would repay the remaining $152,000.” (Cross-Compl, ¶ 27.) Aminpour asserts that Golbari thus cannot argue that he was not given timely notice of Aminpour’s allegations regarding the timeliness of the debt claim. Golbari does not address this point in the reply.

Aminpour also asserts that Trial Exhibit 50 satisfies Code of Civil Procedure section 360, because it is “signed written evidence of Golbari’s acknowledgment, promise, and agreement to pay off the debt after the AAA Nison case was over and that the loan in some amount…was still a current continuing liability as of December 22, 2021.” (Opp’n at p. 10:10-12, emphasis omitted.) Aminpour further asserts that if Golbari “denies that Exhibit 50 satisfies section 360, then there is substantial prejudice to Aminpour in that Aminpour’s counsel did not conduct any discovery or ask any questions at trial about other evidence conforming to section 360.” (Opp’n at p. 10:19-21.)

Aminpour’s counsel indicates that because Golbari did not plead the Code of Civil Procedure section 360 defense in the answer, he “did not serve document requests for signed written evidence of Golbari’s acknowledgment, promise and agreement to pay the remaining amount due on the $300,000 debt when the AAA Nison case was over.” (Joseph Decl., ¶ 5.) Aminpour’s counsel indicates he would have conducted such discovery to obtain such evidence if Code of Civil Procedure section 360 had been pleaded. (Joseph Decl., ¶ 8.) Aminpour’s counsel also indicates that because Golbari did not plead Code of Civil Procedure section 360 in his answer, Aminpour did not ask Golbari questions at his deposition or at trial regarding signed written evidence. (Joseph Decl., ¶ 6.)

Golbari counters that “[a] party is never truly ‘prejudiced’ by being denied recovery on a claim that was legally barred to begin with.” (Reply at p. 2:10-11.) But this does not address the fact that Aminpour has not had the opportunity to conduct discovery into Golbari’s proposed new defense under Code of Civil Procedure section 360. Golbari cites to Hong Sang Market, Inc. v. Peng (2018) 20 Cal.App.5th 474, 488, where the Court of Appeal found that “[w]e are not persuaded that the court exceeded the scope of its discretion in allowing the amendment [to an answer]. As a practical matter, Peng could not have asserted a res judicata defense when she first filed her answer because there was no judgment at the time in the unlawful detainer action. And, while Peng did not seek to raise a res judicata defense until over 10 months later, when the matter was set for trial, we fail to see how Hong Sang was prejudiced by any delay in Peng’s pursuit of a res judicata defense. The issue was purely legal in nature. Indeed, the parties agreed on stipulated facts for purposes of the court trial. It is unclear what, if any, discovery Hong Sang might have conducted that would bear upon a res judicata defense.” (Internal citations omitted.) Here, by contrast, Golbari could have plead the Code of Civil Procedure section 360 defense when he filed his answer to the Cross-Complaint. In addition, Golbari does not seek to amend his answer to asserts a res judicata defense. Further, as already discussed, Aminpour asserts that he would have conducted discovery regarding the Code of Civil Procedure Section 360 defense if it had been pleaded. Based on the foregoing, the Court finds that Aminpour has demonstrated that he would be prejudiced by the proposed amendment. As noted by Aminpour, “courts are much more critical of proposed amendments to answers when offered after long unexplained delay or on the eve of trial [citations], or where there is a lack of diligence, or there is prejudice to the other party.” (Hulsey v. Koehler¿(1990) 218 Cal.App.3d 1150, 1159.)

However, Golbari also asserts that he would be prejudiced if the motion is denied, as he would be deprived of a defense. Golbari notes that “liberality should be displayed in allowing amendments to answers, for a defendant denied leave to amend is permanently deprived of a defense.” (Hulsey v. Koehler, supra, 218 Cal.App.3d at p. 1159.)

The Court concludes that any prejudice to Aminpour can be ameliorated by allowing Aminpour to conduct the discovery he identifies in Section “I” of his opposition and his counsel’s declaration (Opp’n at p. 10:19-28); and by reopening the trial testimony thereafter if Aminpour seeks to present evidence on the Code of Civil Procedure Section 360 issue. The Court notes that discovery would be reopened for the sole purpose of allowing Aminpour to conduct the discovery he identifies in his opposition to the instant motion, as set forth above. In that event, the parties also would be permitted to file amended closing briefs that would address the Code of Civil Procedure section 360 issue. The Court notes that “[t]rial courts have broad discretion in deciding whether to reopen the evidence.” (Horning v. Shilberg (2005) 130 Cal.App.4th 197, 208; see also Rosenfeld v. Cohen (1987) 191 Cal.App.3d 1035, 1052, fn. 7, [the court has “fundamental authority to control the order of proof and the conduct of proceedings before it. (Evid. Code, § 320; Code Civ. Proc., § 128, subd. (a)(3).”])

            Conclusion

Based on the foregoing, Golbari’s motion for leave to amend his answer is granted, subject to the considerations identified above.

In light of the foregoing, the Non-Jury Trial (Closing Arguments) scheduled for October 11, 2022 is continued to  _______________, 2022 at 10:00 a.m.

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Golbari is ordered to provide notice of this ruling.

DATED:  October 11, 2022                           ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court