Judge: Teresa A. Beaudet, Case: 22STCV21969, Date: 2023-08-03 Tentative Ruling

Case Number: 22STCV21969    Hearing Date: August 3, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiffs Molly Neville (“Neville”) and Kola Olasiji (“Olasiji”) (jointly, “Plaintiffs”) filed this action on July 7, 2022 against Defendants Westside Habitats, 747 Gayley Investors, Inc., and Xenon Investment Corp. The Complaint asserts causes of action for (1) failure to pay minimum wages, (2) failure to pay overtime compensation, (3) denial of and failure to provide meal and rest periods, (4) failure to furnish accurate itemized wage statements, (5) failure to indemnify for all necessary expenses, (6) waiting time penalties, (7) whistleblower protection, (8) violation of Business and Professions Code section 17200, and (9) wrongful termination in violation of public policy.[1]

Plaintiffs now move for leave to file a First Amended Complaint. Westside Habitats, LLC (“Westside Habitats”), 747 Gayley Investors, Inc., and Xenon Investment Corp. (collectively, “Defendants”) oppose.

Discussion

Pursuant to Code of Civil Procedure section 473, subdivision (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. ((Id., § 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. Superior Court of Los Angeles County (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.)

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. (¿Cal. Rules of Court, rule 3.1324, subd¿. (a).) 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)  

Plaintiffs attach as Exhibit 1 to the motion the proposed First Amended Complaint, which appears to show proposed changes to the original Complaint in red font. Based on a review of Exhibit 1, Plaintiff appears to seek to add Neville to certain causes of action in the original Complaint alleged only by Olasiji. Specifically, Plaintiffs appear to seek to add Neville to the second cause of action for failure to pay overtime compensation[2], the third cause of action for denial of meal and rest break periods and failure to provide meal and rest break periods, the fourth cause of action for failure to furnish accurate itemized wage statements, and the sixth cause of action for waiting time penalties. (See Ex. 1 to Motion.) However, Plaintiffs’ counsel states in his declaration that Neville seeks to add “three additional causes of action for Plaintiff NEVILLE: (2) Failure to Pay Overtime Compensation; (3) Denial of and Failure to Provide Meal and Rest Periods; and (4) Failure to Furnish Accurate Itemized Wage Statements.” (Grinvald Decl., ¶ 10.) Thus, it is unclear if Plaintiffs also seek to add Neville to the sixth cause of action for waiting time penalties.[3]

In his declaration in support of the motion, Plaintiffs’ counsel states that Neville “seeks to amend the complaint to add additional causes of action in the furtherance of justice so that the Defendants would be obligated to answer for violating laws designed to shield litigants such as Plaintiff from wage theft.” (Grinvald Decl., ¶ 15.) Plaintiffs’ counsel asserts that he “did not discover [Neville’s] potential wage claims until mid-March 2023.” (Grinvald Decl., ¶ 8.)

            As an initial matter, Defendants assert that the instant motion is procedurally improper. As set forth above, “[a] motion to amend a pleading before trial must:…(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.” (Cal. Rules of Court, rule 3.1324, subds. (a)(2)-(3).) As noted by Defendants, Plaintiffs do not identify by page, paragraph, and line number each of the allegations proposed to be added or deleted.

            In addition, Defendants note that the motion fails to indicate “[t]he reasons why the request for amendment was not made earlier.” (Cal. Rules of Court, rule 3.1324, subd. (b)(4).)

Defendants also note that Plaintiffs’ counsel states that he “did not discover [Neville’s] potential wage claims until mid-March 2023,” (Grinvald Decl., ¶ 8) but that Plaintiffs’ counsel also does not identify any specific facts that were allegedly learned in March 2023. In the reply, Plaintiffs assert that “Plaintiff’s counsel realized that [Neville] had potential misclassification claims while

preparing [Neville] for her deposition.” (Reply at p. 3:11-12.) However, no evidence is provided in support of this assertion, and it does not address all of the proposed amendments to the Complaint.

            Defendants also assert that Neville unreasonably delayed in pursuing the proposed amendments. Defendants contend that “the facts alleged in Ms. Neville’s FAC have been known to Ms. Neville since the time of her alleged ‘injury’ during her employment at Westside Habitats, which concluded in 2021.” (Opp’n at p. 6:15-17.) However, Defendants do not appear to cite to any evidence in support of this assertion. Rather, Defendants contend that “Ms. Neville’s wage statements were available to her throughout her employment, and she certainly had personal knowledge about what expenses she allegedly incurred, what overtime hours she allegedly worked, whether she was forced to forego meal and rest breaks, and whether she received her final pay. This is especially true as Ms. Neville’s husband (the co-plaintiff in this case who alleges he also worked as a resident manager for Westside Habitats), Mr. Olasiji, filed these same wage and hour claims as part of the original Complaint in July 2022.” (Opp’n at p. 6:17-23.) In the reply, Plaintiffs counter that Neville “is not an attorney and cannot be expected to know that she was misclassified as exempt.” (Reply at p. 3:4-5.)

            Defendants also assert that the filing of the proposed amended complaint would prejudice them. Defendants’ counsel indicates that Westside Habitats served discovery on Plaintiffs on August 26, 2022, and that Defendants received supplemental responses on April 26, 2023 and May 8, 2023. (Sullivan Decl., ¶ 6.) In addition, Westside Habitats took Neville’s deposition on May 19, 2023 and Olasiji’s deposition on May 22, 2023. (Sullivan Decl., ¶ 11.) Defendants assert that they “would need to engage in further discovery if Ms. Neville’s motion for leave to amend were granted, including written discovery and additional depositions of Plaintiffs, which unnecessarily increases costs for Defendants and could have been avoided with a timely-filed an [sic] amended complaint.” (Opp’n at p. 8:11-13.)

            Defendants also assert that “Plaintiffs, who were well aware of Defendants’ deadline to file a summary judgment motion, waited until two weeks after Defendants filed their summary judgment motion to move for leave to amend the Complaint. Defendants expended significant resources in preparing and filing their summary judgment motion addressing each of the claims in Plaintiffs’ Complaint. Should Ms. Neville’s Motion be granted, Defendants would need to file a second summary judgment motion because they believe discovery will show that Ms. Neville’s claims lack merit.” (Opp’n at p. 8:17-22.)[4]

In the reply, Plaintiffs state that “Plaintiff’s counsel agrees that the FAC could have been filed a few weeks earlier. Plaintiff’s counsel admitted as much in his declaration.” (Reply at       p. 3:18-19.) Plaintiffs’ counsel’s declaration in support of the motion states, “[o]n June 1, 2023, Plaintiffs received an email from Defendants’ counsel Jon Daryanani claiming that [Neville] intentionally delayed providing a copy of the proposed FAC to Defendants and thereby prejudiced Defendants’ case. Plaintiff did not intentionally delay providing a copy of the proposed FAC to Defendants. I told Plaintiff’s counsel Katelyn Sullivan in phone calls what [Neville’s] new claims would be. Any delay in preparing and sending a proposed FAC is my fault and oversight. I had no intention of delaying the trial or Defendants’ prosecution of the case.” (Grinvald Decl., ¶ 7.)

            Defendants further assert that “Plaintiff’s FAC would also require a trial continuance. At the time of filing this Opposition, the Court’s first available summary judgment hearing date is in April 2024, which is after the currently scheduled January 24, 2024 trial.” (Opp’n at p. 9:5-7.)

            Defendants also contend that Plaintiffs’ proposed amendments would be futile. They assert that the new claims in the FAC do not relate back to the Complaint, such that “the claims in the FAC are either eliminated entirely or substantially limited, based on the applicable statutes of limitations.” (Opp’n at p. 10:18-20.) However, the Court notes that in Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048, the Court of Appeal noted that “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.” Thus, the Court does not find that the asserted legal deficiency of the proposed amendments warrants denial of leave to amend.  

            Lastly, Defendants argue that “Plaintiff’s purposeful delay in seeking leave to amend warrants sanctions.” (Opp’n at p. 12:21.) Defendants state that “[p]ursuant to California Code of Civil Procedure § 473(a)(2) or as otherwise permitted by the Code and the Court’s inherent authority, Defendants seek to recover its reasonable expenses incurred in making this opposition, including attorneys’ fees, as well as any costs or fees associating with re-taking Plaintiffs’ depositions, issuing additional previously unnecessary written discovery, and drafting a second summary judgment motion.” (Opp’n at p. 12:22-26.) Code of Civil Procedure section 473, subdivision (a)(2) provides that “[w]hen it appears to the satisfaction of the court that the amendment renders it necessary, the court may postpone the trial, and may, when the postponement will by the amendment be rendered necessary, require, as a condition to the amendment, the payment to the adverse party of any costs as may be just.”  In the reply, Plaintiffs do not appear to oppose Defendants’ request for costs pursuant to Code of Civil Procedure section 473, subdivision (a)(2).

In any event, as set forth above, Plaintiffs failed to comply with certain procedural requirements set forth in California Rules of Court, rule 3.1324 in connection with the instant motion. Thus, the Court denies the motion, without prejudice.

Conclusion

Based on the foregoing, Plaintiffs’ motion is denied without prejudice.

Plaintiffs are ordered to provide notice of this Order.

DATED:  August 3, 2023                               ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court