Judge: Upinder S. Kalra, Case: 23STCV15214, Date: 2025-05-21 Tentative Ruling
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Case Number: 23STCV15214 Hearing Date: May 21, 2025 Dept: 51
Tentative Ruling
Judge Upinder S.
Kalra, Department 51
HEARING DATE: May
21, 2025
CASE NAME: Tamar
Sauer v. Signature Advisors, et al.
CASE NO.: 23STCV15214
MOTION
FOR LEAVE TO FILE CROSS-COMPLAINT
MOVING PARTY: Defendant
Pacific Healthworks, LLC
RESPONDING PARTY(S): Defendant Petersen International
Underwriters
REQUESTED RELIEF:
1. An
order granting leave to file a cross-complaint for equitable and implied
indemnity and contribution against each of the co-defendants in this action.
TENTATIVE RULING:
1. Motion
for leave to file Cross-Complaint is GRANTED;
2. Pacific
to separately file their proposed Cross-Complaint within 7 days’ notice of this
ruling.
STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:
On June 29, 2023, Plaintiff Tamar Sauer (Plaintiff) filed a
Complaint against Defendants Signature Advisors (Signature), Cavalier Insurance
Markenting Services, LLC (Cavalier), and Jason P. Stein (Stein) with three
causes of action for: (1) Negligent Failure to Obtain Insurance Coverage; (2)
Professional Negligence; and (3) Breach of Fiduciary Duty.
According to the Complaint, Plaintiff was insured under a
group Accidental Death & Disability insurance policy. Plaintiff alleges
that prior to the policy’s expiration, she submitted a renewal application to
the Defendants on May 6, 2022. On June 3, 2022, Plaintiff was stabbed by a
patient while working in the ER at Encino Hospital Medical Center. Plaintiff
believed her injuries were covered by the Accidental Death & Disability
insurance policy. Plaintiff alleges that Defendants did not submit her
application to underwriting until June 6, 2022 and, as a result, was not
covered.
On July 5, 2023, Plaintiff filed a separate Complaint (23VECV02912)
against Defendants Prime Healthcare Services-Encino Hospital, LLC; Prime
Healthcare Services, Inc; Prime Healthcare Foundation, Inc.; and Ashkan
Amirosleymani with five causes of action for: (1) Battery; (2) Negligence; (3)
Negligent Hiring, Retention, Supervision, and/or Training; (4) Invasion of
Privacy; and (5) Intentional Infliction of Emotional Distress.
On October 6, 2023, Defendants Prime Healthcare
Services-Encino Hospital, LLC, Prime Healthcare Services, Inc., and Prime
Healthcare Foundation filed a demurrer which the court OVERRULED.
On November 1, 2023, Plaintiff filed a First Amended
Complaint (FAC) for (1) Negligent Failure to Obtain Insurance Coverage; and (2)
Professional Negligence against Defendants Signature Advisors, Cavalier
Insurance Marketing Services, LLC, and Jason P. Stein.
On June 3, 2024, Plaintiff filed a third Complaint
(24STCV13717) with five causes of action for: (1) Labor Code § 3706; (2)
Failure to Pay All Wages Owed Each Pay Period; (3) Failure to Provide Compliant
Meal Periods; (4) Failure to Provide Compliant Rest Breaks; and (5) Unfair
Vusiness Practices against defendants Pacific Healthworks, LLC, Emergent
Medical Associates, Irv Edwards, M.D., Inc., and Mark R. Bell Medical
Corporation.
On July 31, 2024, Plaintiff filed a Second Amended Complaint
for: (1) Negligent Failure to Obtain Insurance Coverage; and (2) Professional
Negligence against defendants Signature Advisors, Cavalier Insurance Marketing
Services, LLC, Jason P. Stein, Pacific Healthworks, LLC, and Petersen
International Underwriters.
On August 29, 2024, Defendant Cavalier Insurance Marketing
Services, LLC filed an Answer.
On August 30, 2024, Defendant Pacific Healthworks, LLC filed
an Answer.
On September 3, 2024, Defendant Stein filed an Answer.
On October 18, 2024, Defendant Petersen International
Underwriters filed an Answer.
On December 18, 2024, Defendants Pacific Healthworks, LLC,
Emergent Medical Associates, and Irv Edwards, M.D., Inc. filed a demurrer which
the court OVERRULED.
On February 10, 2025, Defendant Petersen International
Underwriters filed a motion for summary judgment which the court GRANTED.
On February 24, 2025, Defendant Pacific Healthworks, LLC
(Pacific) filed the instant motion for leave to file a Cross-Complaint.
On April 10, 2025, Defendants Pacific Healthworks, LLC,
Emergent Medical Associates, and Irv Edwards, M.D., Inc. filed an Answer.
On May 2, 2025, the court held an OSC re: Consolidation of
Related Cases where it ORDERED the following cases, 23STCV15214, 23VECV02912,
and 24STCV13717, consolidated and assigned to Department 51 in Stanley Mosk
Courthouse for all purposes. The Court designated 23STCV15214 as the lead case.
On May 8, 2025, Defendant Petersen International
Underwriters (Petersen) filed an opposition to Pacific’s motion for leave to
file a Cross-Complaint. On May 14, 2025, Pacific filed a reply.
LEGAL STANDARD:
A cross-complaint may be either permissive or compulsory.
Compulsory cross-complaints are based on allegations arising out of the same
transactions or occurrences as the causes of action which the plaintiff alleges
in his or her complaint. (Code Civ. Proc., (CCP) § 426.10, subd.
(c).)¿Compulsory cross-complaint causes of action must exist at the time an
answer to the original cross-complaint is required.¿(CCP § 426.30, subd. (a).)¿
All other cross-complaints are permissive.¿(CCP § 428.10.) If a party fails to
file any cross-complaint before or when they file an answer, they must move the
court for leave to file a cross-complaint.¿ (CCP § 428.50.) The court “shall”
grant leave to file a compulsory cross-complaint, as long as the party
demonstrates that, notwithstanding being late, the motion for leave is brought
in good faith.¿ (CCP § 426.50.)¿The court “may” grant leave to file a
permissive cross-complaint “in the interest of justice at any time during the
course of the action.”¿ (CCP § 428.50, subd. (c).)¿¿¿¿
¿
A policy of liberal construction of section 426.50 to avoid
forfeiture of causes of action is imposed on the trial court.¿ (Silver Orgs. v. Frank (1990) 217 Cal.
App. 3d 94, 98-99.) ¿A motion to file a cross-complaint at any time during the
course of the action must be granted unless substantial evidence of bad faith
is demonstrated. ¿(Ibid.)¿
ANALYSIS:
Pacific contends that the court should allow leave to file
the proposed Cross-Complaint because it is in the interests of justice, arise
from Plaintiff’s underlying claim, is in response to a completely different
legal landscape than when Plaintiff brought Pacific into the action, and is
meritorious.
Peterson argues that the proposed Cross-Complaint is not
viable because it is barred by the statute of limitations, inappropriately
tries to relitigate issues decided on summary judgment, is barred by collateral
estoppel, is legally flawed, and is unduly prejudicial.
Pacific replies that all of these arguments lack merit
because there is not yet a “final judgment,” the limitations period has not
started the run, Petersen’s interpretation of Ins. Code § 500 is flawed,
Pacific alleges a viable claim for indemnity, and there is no undue delay since
Pacific brought this motion within four months of becoming a party to the case.
Compulsory vs.
Permissive¿
Cross-complaints against parties other than plaintiff, i.e.,
co-defendant or a third person not yet party to the action, are permissive
only. (See id., § 428.10.) A defendant can
cross-complain against such non-plaintiff only if the cause of action asserted
in the cross-complaint “(1) arises out of the¿same transaction, occurrence,
or¿series¿of transactions or occurrences [set forth in the complaint] … or (2)
asserts a claim, right, or interest in the¿property¿or¿controversy¿which is the
subject of the cause [of action] brought against him.” (Id., § 428.10(b).)
“Cross-complaints for comparative equitable indemnity would
appear virtually always transactionally related to the main action.” (Time for Living, Inc. v. Guy Hatfield Homes
(1991) 230 Cal.App.3d 30, 38.) However, a claim for indemnity or
contribution does not accrue until the indemnity claimant suffers loss or
damages. (People ex rel. Dept. of
Transportation v. Superior Court (1980) 26 Cal.3d 744, 752 [indemnity
action accrues at the time the defendant pays a judgment or settlement as to
which he is entitled to indemnity].)
Here, the proposed Cross-Complaint is permissive because Pacific
seeks relief against a codefendant and, as Pacific noted on reply, there are
not yet damages. (Reply 6:3-10.)
Accordingly, this is a permissive Cross-Complaint.
Bad Faith
‘‘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.]” (Silver
Organizations Ltd. v. Frank¿(1990) 217 Cal.App.3d 94,at 100.)
Here, there is no evidence of bad faith. Indeed, Petersen
did not raise this in their opposition at all.
Accordingly, there is no bad faith.
Undue Prejudice
Here, there is no undue prejudice. First, Pacific sought
leave to file their Cross-Complaint within four months of Petersen’s appearance.
Second, trial is set for March 30, 2026 – 313 days from the hearing on this
motion. Delay of trial, without the risk of losing critical evidence or adding
costs of trial preparation, is not always sufficiently prejudicial. (See Morgan v. Superior Court (1959) 1972
Cal.App.2d 527, 530-31; Magpali v.
Farmers Ins. Grp., Inc. (1996) 48 Cal.App.4th 471, 486-87.) Third, the court
is not persuaded by any of Petersen’s futility arguments. In Kittredge Sports Co. v. Superior Court (1989)
213 Cal.App.3d 1045, 1048, the Court of Appeal found that “even if the proposed
legal theory is a novel one, 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.”
(Internal quotations omitted.) Petersen’s arguments are more appropriate
for a demurrer or summary judgment motion, which the court expects will be
filed.
Accordingly, there is no undue prejudice.
Therefore, the court GRANTS Pacific’s motion for leave to
file a cross-complaint.
CONCLUSION:
For
the foregoing reasons, the Court decides the pending motion as follows:
1. Motion
for leave to file Cross-Complaint is GRANTED;
2. Pacific
to separately file their proposed Cross-Complaint within 7 days’ notice of this
ruling.
Moving party is to give notice.
IT IS SO ORDERED.
Dated: May 21, 2025 __________________________________ Upinder
S. Kalra
Judge
of the Superior Court