Judge Timothy B. Taylor, Case 37-2020-00011898-CU-BC-CTL 2023-09-21 Tentative Ruling

Judge: Timothy B. Taylor, Case: 37-2020-00011898-CU-BC-CTL, Date: 2023-09-21 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - September 18, 2023

09/21/2023 01:30:00 PM C-72 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Timothy Taylor

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Civil - Unlimited Breach of Contract/Warranty Motion Hearing (Civil) 37-2020-00011898-CU-BC-CTL REPRODUCTIVE SCIENCES MEDICAL CENTER INC VS. ART RISK FINANCIAL AND INSURANCE SOLUTIONS INC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Leave to Amend, 08/03/2023

Tentative Ruling on Plaintiff's Motion for Leave to File Sixth Amended Complaint Reproductive Sciences Med. Ctr. v. Art Risk Financial, Case No. 2020-11898 Sept. 21, 2023, 1:30 p.m., Dept. 72 1. Overview and Procedural Posture.

This case involves a dispute regarding gestational surrogacy insurance. Plaintiffs are a medical center that provides medical care and consulting to intended parents and surrogates throughout the surrogacy process, and a related surrogacy agency that manages the entire surrogacy process, from the introduction of intended parents to a qualified surrogate through childbirth. Plaintiffs allege they refer their intended parents and surrogates to 'those who sell specialized applicable insurance.' They further allege that in 2018, they agreed to 'refer all of their clients/intended parents to [defendants] for insurance coverage in exchange for being able to market and represent cost certainty to their clients for surrogacy related services.' Plaintiffs 'recommended and referred 143 clients' to defendants, but defendants failed 'to fulfill their promises' regarding 'surprise balance billing.' This, plaintiffs allege, has given rise to reputational damage.

The complaint was filed in March of 2020. The case was delayed by the closure suffered by the court at the outset of the COVID-19 pandemic. ROA 9. At the first CMC, plaintiffs' counsel indicated he had just substituted in and amended the complaint, and needed more time to effect service. ROA 10-18. The court granted the request. At the second CMC, counsel requested more delay due to another change of counsel and negotiations over the complaint. ROA 20, 22, 32, 34. The court allowed additional time.

ROA 31.

By the time of the third CMC, the FAC had been filed. ROA 36, 46. But because of the continued roundelay of meeting and conferring, there was still no responsive pleading so another continuance was sought and granted. ROA 48. At last, at the fourth CMC, the case was able to set the case for trial in November of 2022. ROA 53-58. The operative SAC was thereafter filed. ROA 60-61. Defendants demurred to the SAC as follows: A. Defendants Art Risk and Hart demurred to all counts. ROA 75-78.

B. Defendants NES and Samson demurred to all counts. ROA 66-69.

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3012272 CASE NUMBER: CASE TITLE: REPRODUCTIVE SCIENCES MEDICAL CENTER INC VS. ART 37-2020-00011898-CU-BC-CTL C. Defendants UFI and Hoffman demurred to counts 4 and 5. ROA 71-74.

D. Joinders were filed by two of the defendant groups. ROA 70, 79 and 80.

Following full briefing and a hearing on November 5, 2021, the court issued a detailed ruling sustaining the demurrers in part and overruling them in part. ROA 92. Leave to amend was granted, and the TAC was thereafter filed. ROA 93.

Art Risk and Hart answered. ROA 105. However, further demurrers were filed as follows: Defendants NES and Samson again demurred to all counts. ROA 101-104.

Defendants UFI and Hoffman again demurred to counts 4 and 5. ROA 95-99.

The court consolidated the hearings on these demurrers to avoid duplication of effort. ROA 111.

Plaintiffs filed opposition. ROA 112-113. Defendants replied. ROA 114-115. Following this full briefing and a hearing on March 25, 2022, the court sustained the pleading challenges in part and overruled them in part (again in a detailed ruling). ROA 120.

The fourth amended complaint followed. ROA 123. An answer followed (NES and Samson, ROA 124), but so did a fifth amended complaint. ROA 128. UFI and Hoffman answered it. ROA 130.

The parties announced they could not get the case ready for trial on the schedule agreed upon (ROA 134), and at a subsequent CMC the court re-set the case for trial in September, 2023. ROA 140-144.

NES and Sampson have settled (ROA 173-176), and have been dismissed (ROA 220, 226-227).

In August 2023, plaintiffs approached the court on the ex parte calendar regarding their desire to amend the complaint yet again.* ROA 179-180. The court had a candid exchange with plaintiffs' counsel, covering such concern as the fact that this case is over 1250 days old, yet still seems to be one in search of a theory; the tardiness of the request, both in relation to the discovery of the facts alleged to justify amendment and in relation to the already-filed MSJs; and the havoc imposed on the court's own calendar. In the end, the court felt it had little alternative but to vacate the already delayed trial date (ROA 193-194), set a CMC (ROA 195), and vacate defendants' upcoming MSJ hearings (ROA 146, 152, 154-171, 191-192). ROA 196. The court felt that only this course of action would allow full exposition of the motion and the opposition.

The motion for leave to amend was filed shortly thereafter and set for Sept. 1. ROA 172, 198-201.

However, the hearing was continued to today pursuant to the parties' stipulation.** ROA 222, 228. UFI and Hoffman filed opposition. ROA 232-235. Plaintiffs filed reply. ROA 237-239. The court has reviewed the papers, and no further submissions are authorized in connection with this motion.

The case is also set for a CMC. ROA 223-224.

2. Applicable Standards.

Pursuant to Code of Civil Procedure 473(a), the trial court has wide discretion to allow the amendment of pleadings. This discretionary power must be exercised liberally at all stages of the proceeding by permitting amendments which will facilitate the interests of justice and resolve all disputed issues.

Edwards v. Superior Court (2001) 93 Cal.App.4th 172, 180. In fact, '[t]he 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. 'Leave to amend should be denied only where the facts are not in dispute, and the nature of the plaintiff's claim is clear, but under substantive law, no liability exists and no amendment would change the result.' Edwards, 93 Cal.App.4th at 180. Such motions are Calendar No.: Event ID: TENTATIVE RULINGS

3012272 CASE NUMBER: CASE TITLE: REPRODUCTIVE SCIENCES MEDICAL CENTER INC VS. ART 37-2020-00011898-CU-BC-CTL governed by CRC 3.1324.

3. Discussion and Ruling.

The motion for leave to file a sixth amended complaint is granted.

As an initial matter, the court notes that the supporting declaration of Cecilia O. Miller (ROA 199) does not address all of the requirements set forth in CRC 3.1324(b). Nevertheless, the court elects to exercise its discretion and consider the merits of the motion despite this procedural shortcoming. See Kapitanski v. Von's Grocery Co. (1983) 146 Cal.App.3d 29, 32 ('Rigid rule following is not always consistent with a court's function to see that justice is done.'); Fountain Valley Chateau Blanc Homeowner's Assn. v. Department of Veterans Affairs (1998) 67 Cal.App.4th 743, 758 ('The law always favors substance over form[.]').

Turning to the merits, although it appears that plaintiffs may have been aware of the facts giving rise to the amendment for some time, UFI and Hoffman have failed to make a sufficient showing of prejudice.

The trial date was recently vacated, the MSJs are no longer pending, and discovery remains open.

'[A]bsent a showing of prejudice to the adverse party, the rule of great liberality in allowing amendment of pleadings will prevail.' Board of Trustees v. Superior Court (2007) 149 Cal.App.4th 1154, 1163.

Moreover, issues surrounding the merits of the amendment can be addressed via an appropriate pleadings challenge, an evidentiary-based motion, or at trial. See Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048.

However, given that UFI/Hoffman and Art Risk/Hart have already filed summary judgment motions, the court directs plaintiff to reimburse the filing fee costs those defendants incurred in doing so. See Code Civ. Proc. § 473(a)(1) ('The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading[.]') (emphasis added). The motions will now have to be re-written in response to the 6th amended complaint, and another filing fee paid.

Plaintiff must file and serve the sixth amended complaint, and remit the payments to counsel for UFI/Hoffman and Art Risk/Hart, by October 2, 2023.

4. CMC.

The court will re-set the case for trial after hearing from counsel about the needs of the case in its current posture.

__________________________ *The plaintiffs are already well past the three amendment limit contemplated by CCP section 430.41(e), and indeed this is the most amended complaints the court can recall being involved with (either in 20+ years of practice or in 15 years presiding over a civil independent calendar department).

**This stipulation was based on a 'tentative settlement' between plaintiffs and UFI – obviously what was 'tentative' did not ripen into anything more.

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3012272