Judge: Upinder S. Kalra, Case: 22STCV01337, Date: 2022-12-06 Tentative Ruling

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Case Number: 22STCV01337    Hearing Date: December 6, 2022    Dept: 51

Tentative Ruling

Judge Upinder S. Kalra, Department 51

HEARING DATE:                                                  

CASE NAME:            J. Steed Inc., a California Corporation, dba Brooke’s Garage Doors Painting and General Contracting v. Ronald J. Nolan, aka Ron Nolan, individually and as Trustee of the Nolan Trust Dated October 27, 2008, et al.

CASE NO.:                22STCV01337

MOTION FOR LEAVE TO FILE CROSS-COMPLAINT

MOVING PARTY: Defendants Ronald Nolan aka Ron Nolan, individually and as Trustee of the Nolan Trust Dated October 27, 2008, Donna J. Smith-Nolan, individually and as Trustee of the Nolan Trust Dated October 27, 2008

RESPONDING PARTY(S): Plaintiff J. Steed Inc.

REQUESTED RELIEF:

1.      An order granting leave to file a cross-complaint

TENTATIVE RULING:

1.      Motion for Leave to File Cross-Complaint is GRANTED.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

On January 12, 2022, Plaintiff J. Steed Inc., a California Corporation, dba Brooke’s Garage Doors Painting and General Contracting (“Plaintiff”) filed a complaint against Ronald J. Nolan, aka Ron Nolan, individually and as Trustee of the Nolan Trust Dated October 27, 2008, Donna J. Smith-Nolan, individually and as Trustee of the Nolan Trust Dated October 27, 2008, and Argent Mortgage Co. LLC, and Does 1 through 100 (“Defendants”). The complaint allege five causes of action based on breach of contract and account stated. The complaint alleges that Plaintiff entered an agreement with Defendants for home improvement services. However, during construction, Plaintiff alleges Defendants required Plaintiff to depart from contracted services and now Defendants owe $58,665.97.

On January 18, 2022, Plaintiff filed a First Amened Complaint.

On May 20, 2022, Defendants filed a Motion to Set Aside Default, which was GRANTED.

The current Motion for Leave to File Cross-Complaint was filed on August 17, 2022. Plaintiff’s Opposition was filed on November 21, 2022. Defendants’ Reply was filed on November 21, 2022.

LEGAL STANDARD:

Code of Civil Procedure § 428.50 provides: 

“(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. 

(b) Any other cross-complaint may be filed at any time before the court has set a date for trial. 

(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.” 

“A party who fails to plead a cause of action subject to the requirements of this article, whether through oversight, inadvertence, mistake, neglect, or other cause, may apply to the court for leave to amend his pleading, or to file a cross-complaint, to assert such cause at any time during the course of the action. The court, after notice to the adverse party, shall grant, upon such terms as may be just to the parties, leave to amend the pleading, or to file the cross-complaint, to assert such cause if the party who failed to plead the cause acted in good faith.  This subdivision shall be liberally construed to avoid forfeiture of causes of action.”  (Code Civ. Proc. § 426.50.) (Emphasis added.) 

The Court of Appeals has explained: “The legislative mandate is clear. A policy of liberal construction of section 426.50 to avoid forfeiture of causes of action is imposed on the trial court. A motion to file a cross-complaint at any time during the course of the action must be granted unless bad faith of the moving party is demonstrated where forfeiture would otherwise result. Factors such as oversight, inadvertence, neglect, mistake or other cause, are insufficient grounds to deny the motion unless accompanied by bad faith.” (Silver Organizations Ltd. v. Frank¿(1990) 217 Cal.App.3d 94, 98–99.) “‘‘Bad faith,’ is defined as ‘[t]he opposite of ‘good faith,’ generally implying or involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake . . ., but by some interested or sinister motive[,] . . . not simply bad judgment or negligence, but rather . . . the conscious doing of a wrong because of dishonest purpose or moral obliquity; . . . it contemplates a state of mind affirmatively operating with furtive design or ill will.  [Citation.]’  [Citations.]’  [Citation.]”  (Ibid. at 100.) 

ANALYSIS:

Defendants Ronald Nolan, individually and as trustee of the Nolan Trust Dated October 27, 2008, and Donna J. Smith-Nolan, individually and as trustee of the Nolan Trust Dated October 27, 2008 move for leave to file a cross-complaint.

            Defendants argue that the failure to timely serve a cross-complaint was due to prior counsel’s neglect. Previously, this Court granted a Motion to Set Aside Default. Defendants argue that there was no bad faith in failing to obtain leave to file as counsel first wanted to set aside the previously set default. Upon further investigation into the matter, counsel determined that a cross-complaint was necessary. Defendants attempted to have Plaintiff’s counsel stipulate to allow a cross-complaint, but Plaintiff’s counsel failed to do so.

            Plaintiff’s opposes the motion on the grounds that Defendants have failed to demonstrate oversight, inadvertence, mistake, neglect, or other cause. Additionally, Plaintiff argues that the proposed cross-complaint is subject to a demurrer as it fails to attached the causes of action form as well as the contract, despite pleading a breach of contract cause of action.

            As discussed above, however, Section 426.50 is liberally construed in favor of granting a motion to file a cross-complaint and must be granted unless the moving party acts in bad faith. In response to Plaintiff’s Opposition, Defendants state that the failure to attach the entire proposed cross-complaint was inadvertence, and has since attached the entire proposed cross-complaint. Additionally, Plaintiff’s counsel had previously received this proposed cross-complaint when Defendants emailed about stipulating to the cross-complaint. The Court finds no bad faith on the part of Defendants. The motion to set aside default was granted on August 10, 2022. This current motion was filed on August 17, 2022. Defendants were not dilatory in seeking leave to file a cross-complaint. Therefore, the Court finds no bad faith, Defendants were expedient in requesting leave, and CCP § 426.50 is liberally construed.

            Motion for Leave to File Cross-Complaint is GRANTED.

Conclusion:

            For the foregoing reasons, the Court decides the pending motion as follows:

Motion for Leave to file Cross-Complaint is GRANTED. Moving party to file as a separate the cross-complaint within five days of receiving notice of this order.

Responding party is to give notice.

IT IS SO ORDERED.

Dated:             December 7, 2022                   __________________________________                                                                                                                Upinder S. Kalra

                                                                                    Judge of the Superior Court