Case Number:?BC651574????Hearing Date:?May 08, 2019????Dept:?24
Cross-Complainants?1502 Rockwood and Haverstock BLY, LLC?s?motion for leave to file a First Amended Cross-Complaint is GRANTED.
On February 24, 2017, Cal Continental Capital, Inc. (?CCC?) and Uzrad Lew (?Lew?) filed this action against 1502 Rockwood, LLC (?1502 Rockwood?) and Yair Ben Moshe (?Moshe?). On September 20, 2017, CCC filed the operative first amended complaint (?FAC?) against alleging two causes of action for breach of contract against 1502 Rockwood and fraudulent concealment against 1502 Rockwood and Moshe. On November 15, 2017, Plaintiff dismissed the FAC without prejudice as to Moshe only.
The FAC alleges that on March 12, 2014, Defendants represented and warranted to Plaintiff that Defendants, as the buyer of the subject property, intended to construct a multi-family residential and commercial structure on the property and would be incurring construction and permanent financing with respect thereto. However, Defendants did not intend to do so when they made the representations. Based on these representations Plaintiff entered into a Cash Flow Payment Agreement with Defendants. According to Plaintiff, Defendants transferred the subject property triggering the payment due in the sum of $100,000 as a bonus provided under the Cash Flow Payment Agreement. Plaintiff contends Defendants have failed to pay Plaintiff the cash flow payments in the amount of $200,000 plus interest as agreed.
On July 3, 2017, 1502 Rockwood and Haverstock BLY, LLC (?Haverstock?) (collectively, ?Cross-Complainants?) brought a cross-complaint against CCC, Lew, Tal Orium, Crown Hill, LLC, Glendale Enterprises 115, LLC, and Charles Jeannel (collectively ?Cross-Defendants?). The Cross-Complaint alleges eight causes of action for: 1) breach of contract, 2) fraudulent concealment, 3) breach of contract, 4) intentional misrepresentation; 5) cancellation of instrument; 6) breach of lease, 7) breach of fiduciary duty, and 8) accounting.
On March 4, 2019, Cross-Complainants moved for leave to amend to file a First Amended Cross-Complaint (?FACC?) to add Moshe as a cross-complainant in place of Haverstock to allege the same causes of action derivatively for the benefit of Haverstock and add a new Ninth Cause of Action for Declaratory Relief against Lew. During a separate hearing, the parties represented that Haverstock was inactive and had not been revived. On April 2, 2019, the parties represented that the corporation had been revived, and the Court continued the motion again to May 8, 2019 to allow the parties to further brief the merits of the motion. On April 25, 2019, Cross-Defendants filed an opposition. On May 1, 2019, Cross-Complainants filed a reply.
Legal Standard
If a plaintiff wishes to amend a complaint after the answer has been filed or after the demurrer has been filed and after the hearing on the demurrer, or if he or she has already amended the complaint ?of course,? permission of the court must be obtained before the amendment will be allowed. (CCP ?? 473(a)(1), 576.)
Motions for leave to amend the pleadings are directed to the sound discretion of the court. ?The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading . . . .? (CCP ? 473(a)(1); see CCP ? 576.) Policy favors liberally granting leave to amend so that all disputed matters between the parties may be resolved. (See?Howard v. County of San Diego?(2010) 184 Cal.App.4th 1422, 1428.) Absent prejudice to the adverse party, the court may permit amendments to the complaint ?at any stage of the proceedings, up to and including trial.? (Atkinson v. Elk Corp.?(2003) 109 Cal.App.4th 739, 761 [internal quotes omitted].) Where leave is sought to add entirely new claims, the court may grant leave to amend if the new claims are based on the same general set of facts, and the amendment will not prejudice the opposing party. (Austin v. Massachusetts Bonding & Ins. Co.?(1961) 56 Cal.2d 596, 600-602;?Glaser v. Meyers?(1982) 137 Cal.App.3d 770, 777 [holding trial court did not abuse its discretion in permitting amendment of complaint, which originally alleged constructive eviction, to allege retaliatory eviction where the new claim was based on the same general set of facts].)
Although denial is rarely justified, a judge has discretion to deny leave to amend if the party seeking the amendment has been dilatory,and?the delay has?prejudiced?the opposing party. (Morgan v. Sup.Ct.?(1959) 172 Cal.App.2d 527, 530; see also?Hirsa v. Superior Court(1981) 118 Cal.App.3d 486, 490). An opposing party is prejudiced where the amendment would necessitate a trial delay along with a loss of critical evidence, added preparation expense, increased burden of discovery, etc. (Magpali v. Farmers Group, Inc.?(1996) 48 Cal.App.4th 471, 486-488 [leave properly denied where plaintiff sought leave on the eve of trial, nearly two years after the complaint was originally filed and gave no explanation for the delay which prejudiced defendant who did not discover or depose many of the witnesses who would support the new allegations and had not marshaled evidence in opposition of the new allegations].)
Discussion
Procedure
A motion for leave to amend must state with particularity what allegations are to be amended. Namely, it must state what allegations in the previous pleading are proposed to be deleted and/or added, if any, and where, by page, paragraph, and line number. (CRC, Rule 3.1324(a)(2)-(3).) The motion must be accompanied by a declaration specifying: (1) the effect of the amendment; (2) why the amendment is necessary and proper; (3) when the facts giving rise to the amended allegations were discovered; and (4) the reasons why the request for amendment was not made earlier. (CRC, Rule 3.1324(b).) The motion must also be accompanied by the proposed amended pleading, numbered to differentiate it from the prior pleadings or amendments. (CRC, Rule 3.1324(a)(1).) It is within the court?s discretion to require compliance with Rule 3.1324 before granting leave to amend. (Hataishi v. First American Home Buyers Protection Corp.?(2014) 223 Cal.App.4th 1454, 1469.)
Here, Cross-Complainants motion satisfies the above CRC rules. Cross-Complainants provides a proposed copy of the FACC. (Hoyng Decl., Ex. 1.) Cross-Complainants provides the amendments within the motion with particularity as to each amendment. The declaration provides the effect of the amendment and an evidentiary basis for the proposed amendment. Thus, Cross-Complainants? motion is therefore procedurally proper.
There appear to be no issues with delay. Counsel?s declaration establishes that the derivative issues and the ninth cause of action were discovered recently through Cross-Defendant?s recently filed motion to recuse. (Brown Decl., ?? 3-7.) Further, no prejudice is apparent because the proposed FACC only changes the derivative nature of the suit, and not the substantive claims. Additionally, trial is not until September 3, 2019.
Cross-Defendants opposition fails to highlight any delay or prejudice from the proposed amendments. Cross-Defendants argues that ?Rockwood 1? cannot prosecute the claims raised in the First through the Fifth Causes of Action of the proposed Cross-Complaint because it is a cancelled limited liability company and is no longer the holder of any claims and ?Rockwood 2? was not formed until November 14, 2016, it can assert no claims against any of the Cross-Defendants arising out of any course of dealings occurring prior to November 14. 2016. Cross-Defendants provide no authority on this point. Further, Cross-Defendants provide that Rockwood is a successor entity with the same name as the original Rockwood. (Moshe Decl., ? 2.) Rockwood 1 was party to several transactions, including the sale agreement at issue. (Id. ? 3.) Moshe further declares that the original Rockwood assets were distributed to a family trust, and the trust subsequently transferred the assets, including the rights to the instant action, to the new Rockwood. (Id. ?? 3-4.) Lastly, the substantive arguments regarding the statute of limitations that they ?expect? to raise in a demurrer do not justify denying leave.
Accordingly, Cross-Complainants? motion is GRANTED.?Moving party is ordered to give notice.
Moving party is ordered to give notice.