Judge: Teresa A. Beaudet, Case: 22STCV10379, Date: 2024-05-06 Tentative Ruling
Case Number: 22STCV10379 Hearing Date: May 6, 2024 Dept: 50
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MARIA DE JESUS GUZMAN PADILLA, et al., Plaintiffs, vs. LINDA V. ARMOR, et
al., Defendants. |
Case No.: |
22STCV10379 |
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Hearing Date: |
May 6, 2024 |
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Hearing Time: |
10:00 a.m. |
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[TENTATIVE]
ORDER RE: CROSS-COMPLAINANTS’
MOTION FOR LEAVE TO FILE FIRST AMENDED CROSS-COMPLAINT |
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AND RELATED CROSS-ACTIONS |
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Background
A
number of plaintiffs filed this action on March 25, 2022 against Defendants
Linda V. Armor, Taylor Equities 17, LLC (“Taylor Equities 17”), RI 1812
Apartments LLC (“RI 1812 Apartments”), and 1812 5th Street LLC (“1812 5th
Street”) (collectively, “Defendants”). The Complaint asserts causes of action
for (1) breach of warranty of habitability, (2) breach of covenant of quiet
enjoyment, (3) negligence, (4) breach of contract, (5) nuisance, and (6) unfair
competition in violation of California Business and Professions
Code section 17200, et seq.
On
January 30, 2023, 1812 5th Street filed a Cross-Complaint against Linda V. Armor,
Taylor Equities 17, and RI 1812 Apartments, alleging causes of action for (1)
express indemnity, (2) contribution, (3) implied indemnity, (4) declaratory
relief, and (5) apportionment of fault.
On
February 21, 2023, Taylor Equities 17 and RI 1812 Apartments filed a
Cross-Complaint against, inter alia, Linda V. Armor, as an individual
and as Trustee of the Armor Family Trust (“Armor”), asserting causes of action
for (1) nondisclosure of material facts,
(2)
nondisclosure of material facts, (3) express indemnity, (4) breach of contract,
(5) duty to defend, (6) duty to indemnify, (7) negligence, (8) breach of
fiduciary duty, (9) negligent misrepresentation, (10) breach of the implied
covenant of good faith and fair dealing, (11) equitable indemnity, (12)
contribution, (13) apportionment of fault, and (14) declaratory relief.
On August 16, 2023, Ingenious Asset Group, Inc. filed a
Cross-Complaint against Taylor Equities 17 and RI 1812 Apartments, alleging six
causes of action.[1]
Armor
previously demurred to the first, third, tenth, eleventh,
twelfth, thirteenth, and fourteenth causes of action of Taylor Equities 17 and RI 1812’s Cross-Complaint. On August 2, 2023, the Court issued an order sustaining
Armor’s demurrer to the third, eleventh, twelfth, and thirteenth causes of
action of the Cross-Complaint, with leave to amend. The Court sustained the
demurrer to the fourteenth cause of action without leave to amend. The Court
overruled the demurrer to the first and tenth causes of action. The August 2, 2023 Order provides, “[t]he
Court orders Cross-Complainants to file and serve an amended cross-complaint,
if any, within 20 days of the date of this Order. If no amended cross-complaint is filed within 20 days of this
Order, Armor is ordered to file and serve an answer within 30 days of the date
of this Order.”
Taylor Equities 17 and RI 1812 Apartments (jointly,
“Cross-Complainants”) now move for an order permitting them leave to file a
First Amended Cross-Complaint. Armor opposes.
Discussion
Pursuant to
A motion to amend a
pleading before trial must include a copy of the proposed amendment or amended
pleading, which must be serially numbered to differentiate it from previous
pleadings or amendments. (Cal. Rules of Court,
rule 3.1324, subd. (a).) The
motion must also state what allegations are proposed to be deleted or added, by
page, paragraph, and line number. (Ibid.) Finally, “[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.” (Cal. Rules
of Court, rule 3.1324, subd. (b), emphasis added.)
Cross-Complainants’
proposed First Amended Cross-Complaint (“FACC”) is attached as Exhibit 1
to Cross-Complainants’ counsel’s declaration. (Vinje Decl., ¶ 3, Ex. 1.) The
proposed FACC alleges causes of action for (1) nondisclosure of material facts,
(2) breach of the implied covenant of good faith and fair dealing, (3) breach
of contract, (4) negligent misrepresentation, (5) intentional
misrepresentation, (6) equitable indemnity, (7) express indemnity, and (8)
contribution. (Ibid.)
Cross-Complainants’ counsel states that “[t]he proposed FACC seeks to
dovetail off the previous allegations to allege two new causes of action
against Armor for negligent misrepresentation and intentional
misrepresentation. These causes of action are based on the facts that Armor had
knowledge of habitability issues at the Subject Property during their
ownership, and not only failed to disclose these issues to Cross-Complainants,
but also intentionally showed Cross-Complainants certain units during a pre-purchase
inspection that were in the best condition in order to conceal habitability
issues in other units.” (Vinje Decl., ¶ 7.) Cross-Complainant’s counsel states,
“[t]he…facts Cross-Complainants seek to add the FACC are reflected in
paragraphs 11-14, and 41-65 of the proposed FAC [sic].” (Vinje Decl., ¶ 8.)
In addition, Cross-Complainants’ counsel states that “the Amendment is
also being made to remove certain parties and claims that have been dismissed
from the Cross-Complaint. Specifically, Cross-Complainants have dismissed
Marcus & Millichap Real Estate Investment Services, Inc., Comstar Insurance
Solutions, Inc., and Heffernan Insurance Brokers. Therefore, all causes of
action and paragraphs related to the dismissed parties have been eliminated
from the FACC.” (Vinje Decl., ¶ 9.)[2]
As an initial matter, Armor asserts that the motion fails to comply
with California
Rules of Court, rule 3.1324, subdivision (b). The Court agrees that Cross-Complainant’s counsel’s declaration does
not clearly set forth “[w]hen the facts giving rise to the amended allegations were
discovered,” or “[t]he reasons why the request for amendment was not
made earlier.” (Cal. Rules of Court, rule 3.1324, subd. (b)(3)-(4).) As
set forth above, the requirements of California Rules
of Court, rule 3.1324, subdivision (b) are mandatory.
In the reply,
Cross-Complainants state that they “submit a supplemental declaration of
Vanessa L. Vinje to cure any potential misunderstanding with respect to
Cross-Complainants’ compliance with CRC Rule 3.1324(b).” (Reply at p. 2:24-26.) However, Armor
has not had the opportunity to address Ms. Vinje’s supplemental declaration. In addition,
“¿[t]he general rule of motion practice…is that new evidence is not permitted
with reply papers.¿”¿(¿Jay¿v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537.)
In the motion, Cross-Complainants also note (as set forth above) that
on August 2, 2023, the Court issued an Order providing, inter alia, that
“[t]he Court orders
Cross-Complainants to file and serve an amended cross-complaint, if any, within
20 days of the date of this Order. If
no amended cross-complaint is filed within 20 days of this Order, Armor is
ordered to file and serve an answer within 30 days of the date of this Order.” In
her declaration in support of the motion, Cross-Complainants’ counsel states
that “[u]nfortunately, Cross-Complainants’ former counsel
inadvertently failed to file a timely amendment. I have surmised that the
inadvertence to file the amendment was in large part likely due to numerous
issues among four related cases involving the Cross-Complainants and Armor
occurring simultaneously, including responding to multiple sets of discovery in
those cases and determining a plan for prosecuting the insurance issues against
Heffernan Insurance Brokers, and Comstar Insurance Solutions.” (Vinje Decl., ¶
13.)
Cross-Complainants cite to Code of Civil
Procedure section 473, subdivision (b), which provides in pertinent part
that “[t]he court may, upon any terms
as may be just, relieve a party or his or her legal representative from a
judgment, dismissal, order, or other proceeding taken against him or her
through his or her mistake, inadvertence, surprise, or excusable neglect.”
Cross-Complainants state that they “further seek relief to file the FACC
pursuant to Code of Civil Procedure § 473(b) to
reassert causes of action that Armor demurred to, as their failure to timely
amend upon sustaining Amor’s demurrer in August of 2023 was the result of their
former counsel’s mistake, inadvertence, surprise, or excusable neglect.” (Mot.
at p. 2:19-22.)
In the opposition, Armor asserts that “Taylor Equities’ failure to
file an amended complaint was intentional and not due to mistake or neglect.”
(Opp’n at p. 2:17-19.) In her supporting declaration, Armor’s counsel states,
“[a]ttached hereto as Exhibit A is a true and correct copy of the email
correspondence between Aaron Aguirre, former counsel for Taylor Equities, and
I.” (Shariati Decl., ¶ 2.) Exhibit A shows that Armor’s counsel sent an email
on August 30, 2023 stating, “[w]e did not receive an Amended Cross-Complaint
from Taylor Equities et. al. on August 22, 2023, per the Court’s Order on the
Demurrer. Please let us know if one was filed.” (Shariati Decl., ¶ 2, Ex. A.)
On August 30, 2023, “Aaron Aguirre” sent an email stating, “[n]o amended
Cross-Complaint was filed. As to Linda Armor, we are proceeding against her
with only those causes of action in the cross-complaint that withstood her
demurrer, i.e. #1 non-disclosure and #10 breach of implied covenant of good
faith and fair dealing.” (Ibid.)
In
the reply, Cross-Complainants contend that “[t]his correspondence only furthers
Cross-Complainants’ point,” and that “Cross-Complainants should not be estopped
from bringing valid claims simply because their former counsel mistakenly
failed to file the amended cross-complaint.” (Reply at p. 3:4-11.) But in light
of the above-referenced email attached as Exhibit A to Armor’s counsel’s
declaration (Shariati Decl., ¶ 2, Ex. A), the Court does not find that
Cross-Complainants have provided evidence clearly showing that the failure to
file the proposed FACC was the result of Cross-Complainants’ former counsel’s “mistake, inadvertence, surprise, or excusable neglect.”
(Code Civ. Proc., § 473, subd. (b).)
Armor also asserts that Code of Civil
Procedure section 473, subdivision (b) is not applicable to the
circumstances here because there is no “judgment, dismissal, order, or other proceeding” from which
Cross-Complainants seek relief. (Code Civ. Proc., §
473, subd. (b).) However, as noted by Cross-Complainants, the instant
motion concerns the Court’s order entered against
Cross-Complainants in connection with Armor’s demurrer.
In the opposition, Armor also asserts that “[t]he Court should also
deny the Motion to amend because there has been a long and inexcusable delay
and the requested amendment would unfairly prejudice Ms. Armor.” (Opp’n at p.
3:24-25.) Armor asserts that “Taylor Equities knew or should have known about
the alleged facts forming the basis for any claims for negligent and
intentional misrepresentation when the tenants filed their Complaint on March
25, 2022 or, at latest, when Taylor Equities filed its Cross-Complaint against
Ms. Armor and others on February 21, 2023.” (Opp’n at p. 4:21-24.) However,
Armor does not appear to provide any evidence to support this assertion.
Armor also asserts that she “would be greatly prejudiced by an
amendment due to the current deadlines in the case. Per the Court’s Order
attached hereto as Exhibit B, the trial is currently set for September 11,
2024…This means that the fact discovery deadline and Motion for Summary Judgment
hearing deadline is set for August 12, 2024 and the Motion for Summary Judgment
filing deadline is set for May 29, 2024…Based on the current schedule, it would
be impossible for Ms. Armor to file a demurrer to Taylor Equities’ amended
cross-complaint, proceed with the briefings and the hearing on the demurrer,
conduct discovery on any remaining claims from the demurrer, and file a motion
for summary judgment and schedule the hearing before the deadlines.” (Opp’n at
p. 5:3-11.) However, the Court notes that the trial date in this action is now
set for January 22, 2025.[3]
Lastly, Armor argues that “Taylor Equities’ proposed amended
cross-complaint would be futile because first, it suffers from the same
deficiencies as the original cross-complaint that was successfully demurred.
Second, the new claims of negligent and intentional misrepresentation are
barred by the economic loss rule. Third, the it [sic] would be futile because
the claims are barred by the applicable statute of limitations.” (Opp’n at p.
6:2-6.) However, the Court does not find that the asserted legal deficiency of the proposed FACC warrants denial of
leave to amend. ((See Kittredge Sports Co. v.
Superior Court (1989) 213
Cal.App.3d 1045, 1048 [“the preferable practice would be to permit the
amendment and allow the parties to test its legal sufficiency by demurrer,
motion for judgment on the pleadings or other appropriate proceedings”]¿.)
In light of the deficiencies identified above, specifically
Cross-Complainants’ failure to comply with California
Rules of Court, rule 3.1324, subdivision (b), and Cross-Complainants’ failure to
show their former counsel’s “mistake,
inadvertence, surprise, or excusable neglect,” the Court denies
Cross-Complainants’ motion without prejudice.
Conclusion
Based on the foregoing, Cross-Complainants’ motion for leave to file first
amended cross-complaint is denied without prejudice.
Cross-Complainants are ordered to give notice of this ruling.
DATED:
________________________________
Hon. Teresa A. Beaudet
[1]On February 16,
2023, Plaintiff filed an Amendment to Complaint substituting “Ingenious Asset
Group, Inc.” in place of “Doe 1.”
[2]The Court notes
that Marcus & Millichap Real Estate Investment Services, Inc. appears to
still be listed as a Cross-Defendant on the caption page of the proposed FACC.
(Vinje Decl., ¶ 3, Ex. 1.)
[3]The Court’s April
23, 2024 minute order provides, inter alia, that “Jury Trial is
continued to 01/22/25 at 09:30 AM in Department 50 at Stanley Mosk Courthouse.”