Judge: Teresa A. Beaudet, Case: 23STCV03260, Date: 2024-05-06 Tentative Ruling

Case Number: 23STCV03260    Hearing Date: May 6, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiff Mital Tamoro (“Tamoro”) filed this action on February 14, 2023 against Defendant Quantum Corporation (“Quantum”). The Complaint alleges causes of action for

(1) pregnancy discrimination, (2) disability discrimination, (3) failure to accommodate, (4) failure to engage in the interactive process, (5) denial of CFRA rights, (6) failure to reimburse expenses, and (7) interference with prospective economic advantage.

On February 14, 2024, Quantum filed a Cross-Complaint against Larkin Benefit Administrators, d/b/a The Larkin Company, alleging causes of action for (1) breach of contract – failure to perform, (2) breach of contract – failure to defend and indemnify, (3) negligence,

(4) comparative indemnity, (5) equitable indemnity, and (6) declaratory relief. On April 17, 2024, Quantum filed a request for dismissal of the Cross-Complaint, without prejudice. Dismissal was entered on April 17, 2024.

On August 22, 2023, the Court issued a minute order in this action providing, inter alia, that “Jury Trial is scheduled for 08/28/2024 at 09:30 AM in Department 50 at Stanley Mosk Courthouse.”

Quantum now moves for an order granting leave to file a cross-complaint against third-party Larkin Benefit Administrators. An opposition to the motion was filed by Larkin Benefit Administrators, d/b/a The Larkin Company (“Larkin”)[1]

Discussion

Pursuant to Code of Civil Procedure section 428.50, subdivision (a), “[a] party shall file a cross-complaint against any of the parties who filed the complaint or cross-complaint against him or her before or at the same time as the answer to the complaint or cross-complaint.”

Pursuant to Code of Civil Procedure section 428.50, subdivision (b), “[a]ny other cross-complaint may be filed at any time before the court has set a date for trial.” Pursuant to Code of Civil Procedure section 428.50, subdivision (c), “[a] party shall obtain leave of court to file any cross-complaint except one filed within the time specified in subdivision (a) or (b). Leave may be granted in the interest of justice at any time during the course of the action.”

            Quantum cites to Code of Civil Procedure section 428.10, subdivision (b), which provides that “[a] party against whom a cause of action has been asserted in a complaint or cross-complaint may file a cross-complaint setting forth either or both of the following:…(b) Any cause of action he has against a person alleged to be liable thereon, whether or not such person is already a party to the action, if the cause of action asserted in his cross-complaint (1) arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause brought against him or (2) asserts a claim, right, or interest in the property or controversy which is the subject of the cause brought against him.”

            Quantum seeks leave to file a Cross-Complaint against Larkin, which alleges causes of action for (1) breach of contract – failure to perform, (2) breach of contract – failure to defend and indemnify, (3) negligence, (4) comparative indemnity, (5) equitable indemnity, and (6) declaratory relief. (Hammon Decl., ¶ 2, Ex. 1.) Quantum’s proposed Cross-Complaint alleges inter alia, as follows:

“Plaintiff, Mital Tamoro (‘Plaintiff’ or ‘Tamoro’), brought the underlying action against Quantum alleging various labor code violations premised on her allegation that she was terminated while in a protected employment status following her pregnancy. Quantum denies any liability to Tamoro, but to the extent it is found to be liable, Larkin is the real party at fault. During all relevant times before and after Quantum’s decision to terminate Tamoro, Quantum did not determine protected leave eligibility status for its employees, or administer employee leave programs, because it paid Larkin to fill that role. When Larkin informed Quantum that it would not violate the law by terminating Tamoro (which Quantum asserts it did not) Quantum believed that determination to be correct based on Larkin’s expertise and specialized knowledge. Quantum relied on the accuracy of the advice that Larkin provided with respect to Tamoro’s leave status, and thus, if Quantum is found to have violated the law, Larkin is the party who should answer for such violations and required to satisfy any judgment rendered against Quantum.” (Hammon Decl., ¶ 2, Ex. 1, ¶ 1.)

Quantum’s proposed Cross-Complaint further alleges that “Larkin was obligated under its agreement with Quantum to administer Quantum’s employee leave programs. If Quantum were to suffer ‘any costs, claims, liabilities, damages, judgments, or expenses (including reasonable attorneys’ fees and costs of litigation)’ as a result of a claim brought by a third party arising from Larkin’s alleged negligence, willful or gross misconduct in the performance of this agreement, then Larkin agreed to ‘defend and indemnify [Quantum] and its affiliates, directors, officers, and employees.’ Therefore, Larkin is also in breach for failing to indemnify Quantum for Tamoro’s claims that arise out of Larkin’s alleged negligence.” (Hammon Decl., ¶ 2, Ex. 1, ¶ 2.)

Quantum’s counsel states in his supporting declaration that “on May 12, 2023, Quantum requested confirmation from Larkin Benefit Administrators (‘Larkin’) that it would indemnify Quantum in connection with Plaintiff Mital Tamoro’s Complaint in this action…While Larkin initially disputed its indemnity obligation, it repeatedly assured Quantum that it was reviewing Quantum’s request in order to reach a ‘final response.’…Notwithstanding Quantum’s repeated requests in the ensuing months for Larkin to provide its final response, Larkin ultimately took nearly nine months to provide its final response to Quantum, waiting until February 1, 2024 to inform Quantum for the first time that it would not indemnify Quantum.” (Hammon Decl., ¶ 2.)

            Quantum’s counsel further states that “[o]n February 14, 2024, Quantum filed the Cross-Complaint against Larkin in this action. Thereafter, counsel for Larkin informed Quantum that it intended to move to strike the Cross-Complaint under Code of Civil Procedure section 428.50 on the ground that the Cross-Complaint was filed after trial had been set and Quantum had not obtained leave to file it.” (Hammon Decl., ¶ 3.) Quantum states in the motion that “[a]fter Larkin informed Quantum that it intended to move to strike the Cross-Complaint…Quantum agreed to withdraw the Cross-Complaint for the purpose of seeking leave from this Court to file the Cross-Complaint.” (Mot. at p. 6:15-19.)

            Quantum asserts that the proposed Cross-Complaint “arises out of the same occurrence as [Tamoro’s] claims against Quantum: Quantum’s termination of [Tamoro’s] employment.” (Mot. at p. 7:21-23.) Quantum cites to paragraph 27 of the proposed Cross-Complaint, which alleges that “Quantum expressly denies any liability to Tamoro arising from or related to the allegations in the Tamoro Complaint. However, if held liable to Tamoro, such liability is a result of Larkin’s negligence, breach of contract, willful or gross misconduct in performance under the Larkin Agreement.” (Hammon Decl., ¶ 2, Ex. 1, ¶ 27.) Quantum asserts that accordingly, its proposed Cross-Complaint is sufficiently related to the claims in Tamoro’s Complaint under Code of Civil Procedure section 428.10, subdivision (b).

            Quantum argues that “[g]ranting leave to Quantum to file the Cross-Complaint would serve the interests of justice in at least four ways: (1) it would prevent Larkin from using its own lengthy delay to avoid participating in this action, especially where Larkin has known about the existence of this action since shortly after its commencement; (2) it would avoid repetitive litigation over the same or similar issues; (3) public policy favors resolution of equitable indemnity claims in the same action as the underlying claims; and (4) it would protect against the potential for inconsistent judgments, which undermine the integrity of the judicial system.” (Mot. at p. 8:3-9.)[2]

            In its opposition, Larkin asserts that Quantum’s motion is untimely. Larkin asserts that “the court set a date for trial on August 22, 2023. If Quantum wanted to file a cross-complaint against Larkin, it should have done so before the trial date was set.” (Opp’n at p. 5:27-28.) But as discussed, Code of Civil Procedure section 428.50, subdivision (c) provides that “[a] party shall obtain leave of court to file any cross-complaint except one filed within the time specified in subdivision (a) or (b).[3] Leave may be granted in the interest of justice at any time during the course of the action.” (Emphasis added.)

            Larkin also asserts that “[f]our Quantum depositions in this case have been taken, all to Larkin’s prejudice because it had not been brought into the case in a timely fashion.” (Opp’n at p. 6:9-11.) Quantum indicates that “[t]o date, only the following four depositions have been taken in this action, which occurred on the following dates: (i) Natasha Beckley on September 7, 2023; (ii) Karen Edie on January 22, 2024; (iii) Dana Rosebrook on January 22, 2024; and (iv) Kristen Maglia on February 16, 2024. The first three deponents are current employees of Quantum, and the fourth deponent (Ms. Maglia) is a former employee of Quantum who was represented by counsel for Quantum at her deposition. As indicated by the transcripts of each deposition, those four depositions took a combined total of 5 hours and 29 minutes of time on the record.” (Hammon Decl., ¶ 5.) Quantum’s counsel also states that “[i]n the event that Quantum’s Motion is granted, Quantum is willing to make each of those four deponents available for follow-up depositions to be taken by Larkin to the extent that Larkin identifies areas where new testimony is needed from those deponents.” (Hammon Decl., ¶ 5.)

            Larkin also argues in the opposition that “the causes of action in the Cross-Complaint do not arise out of Quantum’s termination of Plaintiff and do not involve repetitive or overlapping litigation or inconsistent judgments.” (Opp’n at p. 7:3-5.) In the reply, Quantum counters that “[w]hile it is true that Larkin was not involved in determining that Plaintiff’s poor performance warranted termination, that does not make Larkin any less relevant to this action because Quantum nevertheless relied on Larkin’s determination that Plaintiff had not reached 1,250 hours of work and was not entitled to protected leave.” (Reply at p. 5:15-19.) In the Complaint, Tamoro alleges, inter alia, that “[a]t the time QUANTUM terminated TAMORO, TAMORO had been employed with QUANTUM for over one year and had worked over 1,250 hours in the previous year, and was therefore entitled to CFRA leave.” (Compl., ¶ 35.) In the fifth cause of action of the Complaint, Tamoro alleges that “QUANTUM denied TAMORO of her CFRA rights by terminating her just one day into her CFRA protected leave, in violation of Government Code §12945.” (Compl., ¶ 99.) In the proposed Cross-Complaint, Quantum alleges that “Quantum relied on Larkin’s determination that Tamoro was not under a protected leave status to its detriment should Plaintiff prove her case. If Tamoro proves that she was a protected employee and that her termination was unlawful, then Larkin should pay any monetary relief and other legal fees because it is the direct and proximate cause of any harm.” (Hammon Decl., ¶ 2, Ex. 1, ¶ 3.)

            Larkin also asserts that “[t]here is no danger of repetitive or overlapping litigation or inconsistent judgments, as Quantum argues, because a wrongful termination case and a breach of contract case are completely unrelated.” (Opp’n at p. 8:4-6.) But as noted by Quantum, “it is to be expected that Quantum’s claims against Larkin would depend on different legal theories than Plaintiff’s claims against Quantum.” (Reply at p. 5:21-23.) Quantum notes that “[w]hat matters here…is the significant overlapping factual issues between Plaintiff’s claims against Quantum and Quantum’s proposed cross-claims against Larkin…” (Reply at p. 5:24-25.) As discussed, in the proposed Cross-Complaint, Quantum alleges that “Quantum expressly denies any liability to Tamoro arising from or related to the allegations in the Tamoro Complaint. However, if held liable to Tamoro, such liability is a result of Larkin’s negligence, breach of contract, willful or gross misconduct in performance under the Larkin Agreement.” (Hammon Decl., ¶ 2, Ex. 1, ¶ 27.) The Court agrees with Quantum that denying leave to file the proposed Cross-Complaint could create a risk of inconsistent judgments.

            Larkin also argues that “there is certainly no basis for an equitable indemnity claim by Quantum against Larkin as an alleged ‘tortfeasor’ when their relationship is governed by a contract such as the Administrative Services Agreement, and Larkin is not plaintiff’s employer.” (Opp’n at p. 8:6-9.) However, Larkin does not appear to cite any legal authority to support this assertion.[4]

            Lastly, Larkin asserts that “the Declaration of Patrick Hammon does not support Quantum’s motion for leave to file a Cross-Complaint.” (Opp’n at p. 8:10-11.) Larkin asserts that “[t]he declaration does not state what steps counsel took to ensure that the deadline in Cal. Civ. Proc. Code § 428.50 was observed.” (Opp’n at p. 8:23-25.) Quantum counters that the “Hammon Declaration, as well as the proposed Cross-Complaint it attaches, describe Quantum’s timely indemnity demand to Larkin on May 12, 2023, and repeated communications thereafter to obtain a response to that demand from Larkin. Those facts are squarely within Mr. Hammon’s knowledge, as he was involved in those communications with Larkin.” (Reply at p. 8:7-10.)

            Larkin also asserts that the Hammon declaration “does not contain any statements made on personal knowledge regarding the parties’ intent when they entered into the Agreement.” (Opp’n at p. 8:24-25.) The Court does not see how this is relevant to the instant motion. 

            Based on the foregoing, the Court finds that Quantum has demonstrated good cause to file the proposed Cross-Complaint.

Conclusion

Based on the foregoing, Quantum’s motion for leave to file cross-complaint is granted.

The Court orders Quantum to file and serve the proposed Cross-Complaint within 3 days of the date of this Order. 

Quantum is ordered to give notice of this Order. 

DATED:  May 6, 2024                                   ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court