Judge Teresa A. Beaudet, Case Number: 22STCV13462, Date: 2025-04-18 Tentative Ruling

KCS WEST, INC.,

Plaintiff,

vs.

5959 LLC, et al.,

Defendants.

AND RELATED CROSS-ACTIONS

Case No.:

22STCV13462

Hearing Date:

April 18, 2025

Hearing Time: 10:00 a.m.

[TENTATIVE] ORDER RE:

MOTION OF 5959 LLC FOR LEAVE TO FILE SECOND AMENDED CROSS-COMPLAINT

On April 22, 2022, Plaintiff KCS West, Inc. (“KCS” or “KCSW”) filed this action against Defendants 5959 LLC (“5959”) and Koar Airport Associates, LLC. The Complaint alleges causes of action for (1) foreclosure of mechanic’s lien, (2) breach of contract, (3) common count – quantum meruit, and (4) violation of prompt payment statutes.

On July 15, 2022, a Cross-Complaint was filed in this action by 5959 against KCS and Kajima U.S.A. Inc. (“Kajima”). 5959 filed a First Amended Cross-Complaint in this action on May 26, 2023 against KCS, Kajima, and Kohler Co. (“Kohler”) alleging causes of action for (1) breach of contract, (2) express indemnity, (3) statutory indemnity, (4) recovery on guarantee agreement, (5) strict products liability, (6) breach of implied warranty of merchantability, and (7) breach of implied warranty of fitness for a particular purpose. Kohler is only a party to the fifth, sixth, and seventh causes of action in the First Amended Cross-Complaint.

In its First Amended Cross-Complaint, 5959 alleges, inter alia, that it “entered into a prime construction contract dated March 29, 2018 (‘Contract’) with cross-defendants KCSW and Roes 1 through 10 (collectively referred to in the singular as ‘KCSW’) under which KCSW agreed to serve as the general contractor for the construction of extensive renovations to an existing commercial office building located at 5959 West Century Boulevard, Los Angeles, California, and conversation [sic] of the building to a Hyatt Hotel facility (‘Project’).” (FACC, ¶ 7.) 5959 alleges that “Kohler and ROES 21-30 (collectively referred to in the singular as ‘Kohler’) designed, distributed, produced, manufactured, marketed, or sold the Kohler Bellwether Shower Base (‘Shower Pans’) incorporated into the Project.” (FACC, ¶ 29.) 5959 alleges that “[t]he Shower Pans contained a manufacturing or product defect when they left the possession of Kohler,” and that “[t]he Shower Pans and/or their component parts are defective and fail to perform their intended use.” (FACC, ¶¶ 30-31.) 5959 further alleges that “KCSW has breached the Contract by failing to perform all of its obligations under the Contract including, but not limited to, failing to provide and install non-defective shower pans in the guest room bathrooms at the Project, and failing to defend and protect [5959] from and against mechanic’s liens and mechanic’s lien foreclosure actions by various subcontractors of KCSW on the Project.” (FACC, ¶ 9.)

On August 30, 2022, KCS filed a Cross-Complaint against 5959 and Johnson Diversified, Inc., dba Plumbing Solutions (“Plumbing Solutions”). KCS filed a First Amended Cross-Complaint on September 16, 2022 against 5959 and Plumbing Solutions, alleging causes of action for (1) breach of contract, (2) negligence, (3) breach of contract third party beneficiary, (4) express indemnification, (5) implied indemnification, (6) declaratory relief, (7) strict product liability, (8) breach of express/implied warranty of merchantability, (9) breach of express/implied warranty of fitness for a particular purpose, (10) strict product liability – failure to warn, and (11) negligence – duty to warn.

On July 5, 2023, Kohler filed a Cross-Complaint in this action against KCS and Plumbing Solutions, alleging causes of action for (1) indemnification, (2) apportionment of fault, (3) declaratory relief, and (4) express indemnity.

On October 3, 2023, KCS and Kajima filed a Cross-Complaint against Kohler alleging causes of action for (1) equitable indemnity, (2) contribution, and (3) declaratory relief.

On March 6, 2023, the Court issued a minute order in this action providing, inter alia, that “[t]he Court orders the following cases, 22STCV13462, 22TRCV00350, and . . . 22TRCV00639, consolidated and assigned to Department 50 in Stanley Mosk Courthouse for all purposes. The Court designates 22STCV13462 as the lead case.”

On October 1, 2024, after hearing oral argument, the Court granted the motion of KCS to file a first amended cross-complaint.

On October 15, 2024, KCS and Kajima filed a First Amended Cross-Complaint against Kohler alleging causes of action for (1) recission, (2) negligent misrepresentation, (3) fraud/intentional misrepresentation, (4) indemnity, (5) contribution, and (6) declaratory relief.

5959 now moves “for an order granting 5959 leave to file a Second Amended Cross-Complaint (‘SACC’) and deeming the proposed SACC filed and served as of the date the Motion is granted.” (Not. of Mot. at p. 2:6-8.) Via the instant motion, 5959 seeks to “(1) add three new causes of action against Kohler for (i) negligence; (ii) fraud (intentional misrepresentation), and (iii) fraud (concealment); (2) separate 5959’s strict products liability cause of action against Kohler into separate causes of action based on manufacturing defect and design defect theories; (3) add new factual allegations in support of the three new causes of action and the bifurcated strict products liability causes of action; and (4) add appropriate language to clarify and support 5959’s new and preexisting causes of action against Kohler[,] KCSW. . . and Kajima, U.S.A. (‘Kajima’). (Not. of Mot. at p. 2:9-17.) Kohler opposes.

On April 3, 2025, which is after 5959 filed its motion for leave to a file a Second Amended Cross-Complaint, Kohler filed a motion for summary judgment or, alternatively, summary adjudication of the “strict liability claim and claims for breaches of implied [sic] the implied warranties of merchantability and of fitness for a particular purpose alleged in . . . the First Amended Cross Complaint (‘FACC’) [of 5959] or, if the Second Amended Cross Complaint (‘SACC’) is the operative complaint, that would dispose of the Owner’s strict liability claims (for manufacturing and design defects, negligence claim, and claims for breaches of the implied warranties of merchantability and of fitness for a particular purpose, in favor of Kohler and against the Owner [5959].” (04/03/25 MSJ at p. 2:6-12.) The motion for summary judgment filed by Kohler is currently set for hearing on June 17, 2025.

The trial court has discretion to allow amendments to pleadings in the furtherance of justice. (Code Civ. Proc. § 473, subd. (a)(1).) “Any judge, at any time before or after commencement of trial, in the furtherance of justice, and upon such terms as may be proper, may allow the amendment of any pleading . . . .” (Code Civ. Proc. § 576.) There is a policy of great liberality in permitting amendments to the pleadings at any stage of the proceeding. ((Berman v. Bromberg (1997) 56 Cal.App.4th 936, 945.) An application to amend a pleading is addressed to the trial judge’s sound discretion. (Ibid.)

“[C]ourts are much more critical of proposed amendments . . . when offered after long unexplained delay or on the eve of trial . . . or where there is lack of diligence, or there is prejudice to the other party.” ((Hulsey v. Koehler (1990) 218 Cal.App.3d 1150, 1159.) Leave to amend will not be granted where there has been an “inexcusable delay and probable prejudice to the opposing party . . . .” (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 487.) Leave to amend is properly denied “[w]here the trial date is set, the jury is about to be impaneled, counsel, the parties, the trial court, and the witnesses have blocked the time, and the only way to avoid prejudice to the opposing party is to continue the trial date to allow further discovery . . . .” (Id. at p. 488.)

A motion for leave to amend must include a separate declaration specifying: (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(b).)

5959 contends that leave to amend should be granted in accordance with California’s policy favoring liberal amendment of pleadings. 5959 further asserts that (1) there is no prejudice to Cross-Defendants, (2) it has not delayed in moving to amend, and (3) the proposed amendments are valid.

In opposition, Kohler contends that (1) 5959’s addition of design defect and negligence claims would unduly prejudice Kohler by greatly expanding the scope of issues for trial, (2) 5959 has failed to present new facts supporting a design defect claim, and (3) 5959’s motion for leave to plead fraud and concealment should be denied because 5959 identifies no new evidence supporting these theories.

On reply, 5959 contends that (1) Kohler’s arguments against the validity of the proposed amendment are not appropriate in opposition to the motion, (2) Kohler will not be prejudiced by the supplementation of 5959’s existing design defects claim in the SACC, (3) Koher’s argument that 5959 fails to offer new facts in support of its bolstered design defects claim is inappropriate and based on inapposite authority, and (4) Kohler’s argument that 5959 fails to offer new facts in support of its fraud claims is inappropriate and contradicted by Kohler’s own documents.

In support of the motion, counsel for 5959, Alexander J. Suarez (“Suarez”), offers a declaration. Mr. Suarez sets forth the effect of the proposed amendment and why the proposed amendment is necessary and proper. (Suarez Decl., ¶¶ 32-33.) According to counsel, “[t]he amendment is necessary and proper to allow 5959 to assert recently-discovered meritorious fraud claims against Kohler, to clarify and support 5959’s existing strict products liability claims against Kohler, to assert a meritorious negligence claim based on the same facts and circumstances underlying the strict products liability claim, and to clarify and support 5959’s breach of contract claims against KCSW.” (Suarez Decl., ¶ 33.) Counsel indicates that the facts giving rise to the amended allegations as to the fraud claims against Kohler were discovered in 5959’s review of Kohler’s November 15, 2024 document production, which led 5959 to discover that Kohler made numerous misrepresentations to 5959 during the construction of the Project. (Suarez Decl., ¶ 34.) Counsel also indicates that “[t]he impetus to bifurcate the strict products liability claim was to respond to arguments asserted by Kohler during meet and confer efforts concerning 5959’s request that Kohler (as well as KCSW and Kajima) stipulate to allow the filing of the SACC.” (Suarez Decl., ¶ 34.) The request for amendment was not made earlier because 5959 discovered the new fraud claims against Kohler in the documents that Kohler first produced in this action on November 15, 2024. (Suarez Decl., ¶ 35.) Predecessor counsel for 5959 was suffering from health issues and retired abruptly, which caused Glaser Weil to substitute in as attorney of record for 5959 on December 27, 2024. (Suarez Decl., ¶ 35.) 5959’s new attorneys needed a few months to gain sufficient familiarity with this case to participate meaningfully and to understand, develop, and prosecute 5959’s claims and defenses herein. (Suarez Decl., ¶ 35.) Mr. Suarez attests that “Glaser Weil stepped into a live discovery dispute with Kohler and had to respond to pending discovery request (sic) from KCSW.” (Suarez Decl., ¶ 35.)

Mr. Suarez further states the following: on or about May 13, 2020, KCS informed 5959 that the Shower Pans installed for the Project suffered from an apparent defect of cracked/spalled porcelain, otherwise known as crazing. (Suarez Decl., ¶ 8; Exh. 4.) After inspections of and investigations into the defective Shower Pans, on or about July 30, 2020, Kohler represented to KCS that the cause of the issues with Shower Pans was too much enamel which can cause crazing. (Suarez Decl., ¶ 9; Exh. 5.) Kohler indicated that it addressed the issue. (Suarez Decl., ¶ 9; Exh. 5.)

On August 31, 2020, Kohler sent 5959 a letter indicating that the issues with the Shower Pans were “caused by enamel thickness in the corner only and will not propagate over time” and represented that “Kohler [had] addressed the issue in the plant and it was not found on all receptors.” (Suarez Decl., ¶ 10; Exh. 6.) KCS inspected the Shower Pans installed at the Project on or about September 3, 2020, and determined that only 81 of such pans in the 285 rooms inspected were undamaged. (Suarez Decl., ¶ 11; Exh. 7.) 204 of the Shower Pans, however, demonstrated crazing, rusting, scratching, or other damage. (Suarez Decl., ¶ 11; Exh. 7.) Thereafter, in December 2020, Kohler demonstrated a proposed proprietary repair process for KCS which KCS deemed to be of “excellent” quality. (Suarez Decl., ¶ 12; Exh. 8.) Throughout the discussions, 5959 indicated its preference that the Shower Pans be removed and replaced with another model of shower pan. (Suarez Decl., ¶ 13; Exh. 9.)

Mr. Suarez further declares that Kohler’s proprietary repairs proved ineffective and that a subsequent inspection conducted by Pennington in April 2024 showed issues with, inter alia, 100 percent of the Shower Pans installed at the Project being defective. (Suarez Decl., ¶ 15; Exh. 10.) After Kohler was made a party to the action, 5959 served discovery on Kohler, to which 5959 contends that Kohler’s responses to certain discovery produced on November 15, 2024 (including to 5959’s second set of requests for production of documents) was deficient and such responses were the subject of an IDC that was set to be heard on April 1, 2024. (Suarez Decl., ¶ 20.)

Critically, after Glaser Weil substituted into this action on December 27, 2024, Mr. Suarez states that “[d]uring 5959’s new attorney’s review of the documents that Kohler produced on November 15, 2024, 5959 discovered that it had a potential fraud claim against Kohler. In particular, Kohler produced two corrective action reports, or ‘CAR’ that described Kohler’s investigation into, and corrective actions it took to address, the issues with the Shower Pans.” (Suarez Decl., ¶ 24.) “The first, CAR #15641, dated February 5, 2020, revealed that Kohler’s inspections of the Shower Pans conducted as of that date ‘revealed a failure rate as high as 22%.’” (Suarez Decl., ¶ 26; Exh. 16.) “The second, CAR #15912, dated December 17, 2020, revealed that Kohler has shifted its focus to ‘the geometry of Bellwether as root cause’ of the issues with the Shower Pans.” (Suarez Decl., ¶ 26; Exh. 17.)

According to Mr. Suarez, 5959 realized that these documents—particularly when viewed in light of the documents that Kohler produced on July 10, 2024, and Pennington’s 2024 inspection of the Shower Pans at the Project—showed that Kohler misrepresented, inter alia, that the issues with the Shower Pans were merely cosmetic, that the issues would not worsen over time, and that Kohler’s proprietary repairs could resolve the problem. (Suarez Decl., ¶ 27.) Upon such realization, 5959 promptly drafted the SACC and circulated it to cross-defendants on March 6, 2025, asking them to stipulate to its filing. (Suarez Decl., ¶ 28.) The meet and confer efforts were unsuccessful. (Suarez Decl., ¶¶ 29-31; Exhs. 18-19.)

In opposition to the motion, Eric Shapland (“Shapland”), who is counsel for Kohler, declares that discovery has been ongoing since late 2023 and closes on June 30, 2025. (Shapland Decl., ¶ 2.) Mr. Shapland states that the parties have propounded and responded to document demands, interrogatories, and requests for admission. (Shapland Decl., ¶ 2.) Mr. Shapland presents a December 7, 2020 “A3-Problem Solving” document issued by Kohler as to the issues with the Shower Pans which provides that “[c]ustomer escalated corner craze issue which followed with a special select to provide customer replacement parts. Craze was found in replacement parts by customer as well. During re-inspection of product in the DC we also observed corner craze.” (Shapland Decl., Exh. 3 at p. 12.) Such A3-Problem Solving document sets forth actions to correct the issues with the Shower Pans through 2021. (Shapland Decl., Exh. 4.)

Initially, the Court notes that although Kohler contends that the addition of design defect claims and negligence claims would unduly prejudice Kohler by greatly expanding the scope of issues for trial (Opp’n at pp. 10-12), Kohler has not presented any evidence that any prejudice would result. “In law and motion practice, factual evidence is supplied to the court by way of declarations.” (Calcor Space Facility, Inc. v. Superior Court (1997) 53 Cal.App.4th 216, 224.) Here, the declaration of Mr. Shapland offered in support of the opposition does not make any mention of prejudice if leave to amend is granted.

Moreover, the Court finds that Kohler’s reliance on Magpali, supra, 48 Cal.App.4th 471 is inapposite. In Magpali, plaintiff Magpali sought leave to amend the complaint during the time in which trial was trailed and on the day before trial. (Magpali, supra, 48 Cal.App.4th 471, 477.) Thus, the instant action is factually distinguishable as 5959 is seeking to file the SACC prior to the commencement of trial. Also, as conceded by Kohler in the opposition brief, discovery closes on June 30, 2025. (Opp’n at p. 6:22.) Kohler does not offer any evidentiary support for its contention that if leave to amend is granted “the parties will need more than the few months left before trial to conduct extensive additional discovery, expert work, and other marshalling of evidence.” (Opp’n at p. 10:22-23.)

The Court also does not find persuasive the argument of Kohler that the addition of design defect and negligence claims expands the issues for trial and therefore warrants denial of the instant motion. (Opp’n at pp. 10-12.) Kohler is correct that 5959 stated in its responses to set one of Kohler’s special interrogatories that the Shower Pans did not contain a design defect. (Shipland Decl., Exh. 5 at pp. 11-12 at Nos. 21-23.) However, the proposed amendments concern the installation of the defective Shower Pans which is the crux of the now-operative FACC. Thus, “[i]t is irrelevant that new legal theories are introduced as long as the proposed amendments ‘relate to the same general set of facts.’” (Kitteredge Sorts Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048.) As stated in Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 490 “[i]t is difficult to understand how [a named defendant] can be prejudiced by amendment to add an additional theory of liability against it.”

Kohler asserts that 5959 has not presented new facts supporting a design defect claim as CAR #15912 does not support such a claim. (Opp’n at p. 12:4-24.) In support of this contention, Kohler cites to Huff v. Wilkins (2006) 138 Cal.App.4th 732, 746 (Huff”) where leave to amend was denied because the moving party “conceded he had no new facts on which to base a [new] claim . . . and he failed to offer any explanation for his delay in seeking leave to amend.” The mere fact that the parties dispute what the evidence means does not warrant a finding that leave to amend is inappropriate. Here, unlike the moving party in Huff, 5959 has provided an explanation as to why it is seeking leave to amend and has offered the corrective action reports in support of its request for leave to amend. Huff does not support Kohler’s position. 5959 only obtained the corrective action reports via Kohler’s November 15, 2024 response to discovery. (Suarez Decl., ¶ 34.)

The Court also finds that Kohler’s reliance on Huff to support its contention that leave to plead fraud and concealment should be denied because 5959 offers no new evidence to support such theories is misplaced. (Opp’n at pp. 12-13.) 5959 has presented evidence that, upon reviewing Kohler’s November 10, 2024 document production, it discovered that it had a potential fraud claim against Kohler. (Suarez Decl., ¶ 24.)

Here, the parties dispute the import and implication of the corrective action reports produced by Kohler and the ability of such corrective action reports to support the new proposed causes of action. (Suarez Decl., ¶¶ 24-26.) To the extent that Kohler asserts that the proposed new causes of action are not meritorious, an opposition to a motion for leave to amend is not the forum to address such insufficiencies. “[T]he preferable practice would be to permit the amendment and allow the parties to test its legal sufficiency by demurrer.” (California Casualty Gen. Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274, 280-281 (overruled on other grounds).)

In sum, the Court finds that 5959 has not delayed in seeking leave to amend and that Kohler has not made a showing of prejudice if leave to amend is allowed. The Court also finds that 5959 has presented a procedurally compliant motion as required by Cal. Rules of Court, Rule 3.1324. Exercising its discretion, the Court grants 5959’s motion for leave to amend.

In the opposition, Kohler requests that if the motion is granted “trial [be continued] by six months (to January 30, 2026) to address the prejudice of Kohler of adding these fact- and expert-intensive claims so close to the close of fact discovery and trial.” (Opp’n at p. 14:4-7.) If Kohler wishes to seek a trial continuance, Kohler may follow the procedure in Cal. Rules of Cout, Rule 3.1332. An opposition brief is not the appropriate mechanism to request a trial continuance. The Court denies Kohler’s request for a trial continuance without prejudice.

Based on the foregoing, the Court grants 5959’s motion for leave to file a Second Amended Cross-Complaint. The Court orders 5959 to separately file and serve the proposed Second Amended Cross-Complaint so that it becomes an operative pleading in this action.

Superior Court of California

County of Los Angeles

Department 50