Judge: Virginia Keeny, Case: 22STCV03754, Date: 2022-09-12 Tentative Ruling

Case Number: 22STCV03754    Hearing Date: September 12, 2022    Dept: W

LILIA STEELE V. PREMIER AMERCIA CREDIT UNION, ET AL.

motion for leave to file cross-complaint

Date of Hearing:          September 12, 2022               Trial Date:       None

Department:               W                                             Case No.:         22STCV03754

Moving Parties:           Cross-Defendant Lilia Steele and Cross-Plaintiff Nicolas Steele

Responding Party:       Cross-Complainant Premier America Credit Union

BACKGROUND

This is a wrongful mortgage foreclosure action. Plaintiff alleges in 2020, the COVID-19 health crisis materially affected Plaintiff’s business, which primarily involved the chartering of airplanes. Plaintiff requested a forbearance or loan modification agreement with Defendant, consistent with the public policy announced by the Governor of the State of California, in order to avoid the foreclosure. Plaintiff alleges, however, Defendant, in bad faith, singled Plaintiff out and would not enter into a commercially reasonable forbearance agreement as it did with other mortgage customers in similar situations.

On January 31, 2022, Plaintiff Lilia Steele as Co-Trustee of the N&L Steele Revocable Family Trust filed a complaint against Defendant Premier America Credit Union asserting causes of action for wrongful foreclosure and breach of the implied covenant of good faith and fair dealing.

On April 18, 2022, Defendant Premier America Credit Union filed a cross-complaint against Plaintiff Lilia Steele asserting causes of action for breach of loan agreement.

On May 2, 2022, the court sustained Defendant Premier America Credit Union’s demurrer to Plaintiff Lilia Steele’s Complaint, without leave to amend, and ordered the Complaint dismissed with prejudice. 

On May 24, 2022, the court entered its order dismissing Plaintiff’s Complaint with prejudice pursuant to its ruling on May 2.

[Tentative] Ruling

Cross-Defendant Lilia Steele and Cross-Complainant Nicole Steel’s Motion for Leave to File Cross Complaint is GRANTED.

LEGAL STANDARD

Compulsory cross-complaints consist of those causes of action existing at the time of service of the answer, that the defendant must bring against the plaintiff, or else forfeit the right to bring them in any other action. (Code Civ. Proc. § 426.30, subd. (a) (emphasis added) [“Except as otherwise provided by statute, if a party against whom a complaint has been filed and served fails to allege in a cross-complaint any related cause of action which (at the time of serving his answer to the complaint) he has against the plaintiff, such party may not thereafter in any other action assert against the plaintiff the related cause of action not pleaded”].)

“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.” (Code Civ. Proc. § 428.50, subd. (a) [emphasis added].)

“Any other cross-complaint may be filed at any time before the court has set a date for trial.” (Code Civ. Proc. § 428.50, subd. (b) [emphasis added].)

“A party shall obtain leave of court to file any cross-complaint except one filed within the time specified in subdivision (a) or (b) [above]. Leave may be granted in the interest of justice at any time during the course of the action.” (Code Civ. Proc. § 428.50, subd. (c).)

ANALYSIS

Cross-Defendant Lilia Steele and Cross-complainant Nicole Steele (collectively, “Steele Cross-Complainants”) move to file a cross-complaint against Cross-Defendants Hagerty Insurance Agency, LLC, Essentia Insurance Company, and Copart (collectively, “Cross-Defendants”). (Motion, Silver Decl., Exh. 1 – a copy of the proposed cross-complaint.)

Cross Complainant Premier America Credit Union (“Premier”) filed a “Limited Opposition” of the motion. Premier states it does not oppose the motion but, at the same time, it “does not agree to or admit that certain alleged facts about [it] in the proposed verified cross-complaint are correct or true.” (Limited Opposition, filed August 29, 2022, p. 2:1-6.)

However, the Steele Cross Complainants are moving to file a cross-complaint against nonparties.

Since their proposed cross-complaint is not compulsory (i.e., it is not being filed against the party that filed a complaint against them (Premier)), it falls under Code of Civil Procedure section 428.50, subdivision (b).

Under that statute, a cross-complaint may be filed at any time before the court has set a date for trial. Leave of court to file the cross-complaint would be required only if the court had already set a trial date. (Code Civ. Proc. § 428.50, subd. (c).)

Here, the court has not yet set a trial date; a Trial Setting Conference is set for November 17, 2022. Therefore, the Steele Cross Complainants are free to file their cross-complaint against the Cross Defendants at any time before the court sets a trial date.

For the reasons set forth above, the court grants the motion.

CONCLUSION

Cross-Defendant Lilia Steele and Cross-Complainant Nicole Steel’s Motion for Leave to File Cross Complaint is GRANTED.