Motion for Leave to File Third Amended Complaint (Judge Teresa A. Beaudet)


Superior Court of California

County of Los Angeles

Department 50

DINA B. CHERNICK?et al.,

Plaintiffs,

vs.

SAFECO INSURANCE COMPANY OF AMERICA,?et al.

Defendants.

Case No.: BC 625917
Hearing Date: June 26, 2018
Hearing Time: 8:30 a.m.
[TENTATIVE] ORDER RE:?

?

PLAINTIFFS? MOTION FOR LEAVE TO FILE THIRD AMENDED COMPLAINT

????????????Background

Plaintiffs Dina B. Chernick and Nina L. Chernick (jointly, ?Plaintiffs?) filed this action on July 1, 2016 against Defendants The Liberty Company Insurance Brokers, Inc. (?The Liberty Company?), Julie Naines (?Naines?), Safeco Insurance Company of America (?Safeco?), Two Eleven Spalding Condominium Association (?Two Eleven Spalding?), and Bonnie Sugar (?Sugar?). The impetus of the lawsuit was a water incursion event in July 2014 and October 2015 at Plaintiffs? condominium that caused damage and property loss. Plaintiffs maintained homeowner?s insurance policy with Safeco, which was brokered by The Liberty Company (for whom Naines was an agent). Two Eleven Spalding is the homeowners association to which Plaintiffs belonged as members, and Sugar owned the unit directly above Plaintiffs? unit.

Plaintiffs filed the operative Second Amended Complaint (?SAC?) on August 16, 2017.?The SAC asserts causes of action for (1) breach of contract, (2) breach of implied covenant of good faith and fair dealing, (3) unfair business practices, (4) breach of fiduciary duty, (5) negligence, and (6) injury to real and personal property. Trial is currently scheduled for December 12, 2018. The Benita W. Sugar Trust UDT dated April 4, 2012 (the ?Sugar Trust?) was added to replace Doe No. 1 on March 20, 2017.

Plaintiffs now move for leave to file a Third Amended Complaint (?TAC?). The only defendant who opposes is Two Eleven Spalding. Safeco, The Liberty Company, and Naines filed notices of non-opposition. Sugar?s only response was an objection to a portion of the declaration filed by Plaintiffs in support of the instant motion.

Evidence

The Court notes that Sugar filed an Objection to Declaration of Henry Ben-Zvi in Support of Plaintiffs? Motion for Leave to File Third Amended Complaint. However, the Objection does not contain specific evidentiary objections on which the Court can rule. Nevertheless, the Court acknowledges Sugar?s objections to the substance of the Declaration of Henry Ben-Zvi and considers them to the extent that they are relevant to the disposition of the instant motion.

Discussion

Pursuant to?Code of Civil Procedure section 473(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. (Code Civ. Proc., ? 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?(1999) 68 Cal.App.4th 1435, 1448.)

In their motion, Plaintiffs concede that their sixth cause of action for injury to real and personal property is not artfully pled and seek leave to clarify that the facts alleged constitute a cause of action for trespass and a cause of action for nuisance. Plaintiffs also seek leave to add a cause of action for intentional interference with contract against Two Eleven Spalding as well as to add a new defendant, Barry Kashfian DMD, Inc. (?Barry Kashfian?). Lastly, Plaintiffs seek to add a claim for breach of the CCRs against Sugar.

As a preliminary matter, the Court notes that a motion to amend a pleading before trial must ?[s]tate what allegations are proposed to be added to the previous pleading, if any, and where, by page, paragraph, and line number, the additional allegations are located.? (Cal. Rules of Court, rule 3.1324(a)(3).) Nowhere in the motion or the accompanying declaration by Plaintiffs? counsel is this requirement met. Nevertheless, Two Eleven Spalding does not include this as a basis for its procedural objection to the motion. Rather, Two Eleven Spalding contends that the supporting declaration by Plaintiffs? counsel does not meet the requirements of?California Rules of Court, rule 3.1324(b). The Court finds that even if the supporting declaration is defective, it does no warrant denial of the motion solely on that basis. Therefore, the Court will consider the merits of the motion.

Plaintiffs contend that the trespass and nuisance causes of action, which replace the injury to real and personal property cause of action, are based on the same facts and circumstances alleged in the original complaint. Plaintiffs contend that there is no prejudice to Two Eleven Spalding or to Sugar for having to defend against these claims. Although Two Eleven Spalding objects to the addition of the trespass and nuisance causes of action, Two Eleven Spalding does not identify any new facts alleged in the proposed TAC that did not already exist in the SAC. As Two Eleven Spalding itself notes, the trespass and nuisance causes of action are predicated on Two Eleven Spalding?s alleged ?actions and/or omissions [that] caused water to enter Plaintiffs? property.? (Ben-Zvi Decl., Ex. 1, Proposed TAC, ?? 73, 77.) Though not specifically identified by Plaintiffs in their papers, these allegations exist in the SAC. (See, e.g.,?Ben-Zvi Decl., Ex. 3, SAC, ?? 22, 35, 36.) Therefore, the Court finds that any prejudice to Two Eleven Spalding as a result of these changes would not warrant denial of leave to amend.

With regard to the addition of the new cause of action for intentional interference with contract (including a claim for punitive damages), Two Eleven Spalding contends that Plaintiffs have been dilatory in making this amendment and that the delay has been prejudicial. Plaintiffs seek to charge Two Eleven Spalding with interference with Plaintiffs? contractual relationship with Safeco. Plaintiffs assert that documents produced during discovery (beginning in late 2017) revealed that Two Eleven Spalding sent false and misleading statements to Safeco concerning the cause of delays in Plaintiffs? reconstruction of their property, and that based on these statements, Safeco cut off insurance benefits to Plaintiffs. (Motion, p. 7: 10-15; Ben-Zvi Decl., ? 6.) Two Eleven Spalding separately contends that Plaintiffs have been dilatory and that the delay has prejudiced Two Eleven Spalding because it has already begun its preparations for trial, including reserving a summary judgment/adjudication hearing date. Two Eleven Spalding also contends that the filing of the proposed TAC will result in more motions directed to the pleading,?i.e.,?demurrer or motion to strike, and more discovery. Two Eleven Spalding contends that trial would need to be continued, which would increase the costs of litigation. Finally, Two Eleven Spalding contends that the intentional interference with contract cause of action fails to state a cause of action and is time-barred, as it would not relate back to the original complaint.

In reply, Plaintiffs assert that a cause of action has been sufficiently stated and that the statute of limitations would not bar the cause of action because it is grounded on the same general set of facts as in the original complaint and because the statute does not begin to run until the discovery of the facts essential to the claim. In any event, as noted by Plaintiffs, 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? (Kittredge Sports Co. v. Superior Court?(1989) 213 Cal.App.3d 1045, 1048.) Further, Plaintiffs contend that Two Eleven Spalding will not be prejudiced by the amendments because there is still time for additional discovery and trial may need to be continued in any case because Sugar has yet to have a guardian ad litem appointed in this case, which has stalled discovery vis-?-vis Sugar. The Court agrees and finds that Two Eleven Spalding has not demonstrated that it will be unduly prejudiced by the amendments. Any issues with the legal sufficiency of the TAC can and should be tested by demurrer or motion to strike, as appears to be the stated intent of the non-opposing defendants.

Conclusion

Based on the foregoing, Plaintiffs? motion for leave to file the TAC is granted. Plaintiffs are ordered to file and serve the TAC within 3 days of this Order.

Plaintiffs are ordered to give notice of this ruling.

DATED:??June 26, 2018?????????????????????????????????________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court