Judge: Teresa A. Beaudet, Case: 23STCV20137, Date: 2024-10-02 Tentative Ruling

Case Number: 23STCV20137    Hearing Date: October 2, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

On August 21, 2023, Plaintiffs Henry Pulliam and Judith Pulliam (jointly, “Plaintiffs”) filed this action against Defendant Reliant Life Shares, LLC. The Complaint alleges causes of action for (1) fraud – intentional misrepresentation, (2) negligent misrepresentation, (3) fraud-omissions, (4) breach of fiduciary duty, (5) professional negligence, (6) rescission, and

(7) money had and received.

Plaintiffs now move for leave to file a first amended complaint. The motion is unopposed.

Request for Judicial Notice

The Court grants Plaintiffs’ request for judicial notice.

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. (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).)  

Exhibit 1 to Plaintiffs’ counsel’s supporting declaration is a “copy of the proposed First Amended Complaint, with the changes/additions bolded and highlighted.” (Steuer Decl., ¶ 2.) Plaintiffs’ counsel indicates that “the proposed First Amended Complaint makes the following changes to the original complaint: 1) it adds six proposed new defendants to the complaint; 2) it adds factual allegations pertaining to those six defendants; 3) it specifies which causes of action are asserted against each of the defendants; 4) it specifies the alleged misconduct of the six proposed new defendants; and 5) it adds allegations of facts and conduct which occurred or was first discovered after the original complaint was filed.” (Steuer Decl., ¶ 2.) Plaintiffs’ counsel states that “[t]he primary purpose of the proposed First Amended Complaint is to add six defendants to the complaint who are alleged to be alter egos of the original defendant, and to allege alter ego liability as to those six proposed new defendants.” (Steuer Decl., ¶ 2.)

Plaintiffs’ counsel further states that “[t]he proposed additional alter ego defendants were not included in the original complaint because Plaintiffs and I were unaware of their alter ego relationship with the original defendant at that time. My office learned of the alter ego relationship after being informed in another matter in which I am counsel that the original defendant was in receivership. In the course of reviewing filings in the receivership proceeding, I discovered that the Los Angeles County Superior Court had ruled that the proposed additional defendants are alter egos of the original defendant, after a trial on the merits in another matter which was affirmed on appeal, and had made specific factual findings to that effect.” (Steuer Decl., ¶ 4.)

 In addition, Plaintiffs’ counsel states that “I discovered that the original defendant engaged in misrepresentations, omissions and breaches of duty of which Plaintiffs and I were not previously aware from filings in the other matter in Los Angeles County Superior court, filings in a putative class action case against the original defendant, filings which the receiver of the original defendant has made, and discovery produced in another matter against the original defendant in which I am counsel.” (Steuer Decl., ¶ 5.) Plaintiffs’ counsel also states that “[t]he DOE defendants were dismissed at the case management conference before I was aware that the proposed new defendants were alter egos of the original defendant and therefore appropriate DOE defendants. My office promptly prepared the proposed first amended complaint upon becoming aware of the proposed new defendants’ alter ego liability and the additional acts of wrongdoing by the original defendant.” (Steuer Decl., ¶ 6.)

Plaintiffs assert that they “should be allowed to include all known joint tortfeasors in this case in order to avoid a multiplicity of actions arising out of the same investment and events. Likewise, Plaintiffs should be allowed to allege all claims which are supported by the facts of their case, and all facts which support their claims against the original defendant and the proposed additional defendants.” (Mot. at p. 4:1-5.)

Based on the foregoing, and in light of the lack of any opposition, the Court finds that Plaintiffs have demonstrated good cause to file the proposed First Amended Complaint.

Conclusion

Based on the foregoing, Plaintiffs’ motion is granted. The Court orders Plaintiffs to file and serve the First Amended Complaint within 3 days of the date of this Order.¿   

Plaintiffs are ordered to give notice of this Order.  

DATED:  October 2, 2024                             ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court