Case Name: Decilion, Inc. v. Saini, et al.
Case No.: 16-CV-293823

This action initiated by plaintiff Decilion, Inc. (“Plaintiff”) against defendants Hardip Singh Saini (“Saini”), Flex Tooling Inc., Flex Tooling LLC, and Flextronics International USA, Inc. (“Flextronics”) arises out of a business dispute.

According to the allegations of the complaint (“Complaint”), Saini was employed by Plaintiff as Chief Executive Officer (“CEO”) and President. (Complaint, ¶¶ 2, 8.) While in those positions, Saini breached his fiduciary duties owed to Plaintiff in several ways. Saini was presented with an opportunity to work with other businesses and, instead of using that opportunity to benefit Plaintiff, he used it to benefit his companies Flex Tooling Inc. and Flex Tooling LLC, which are Plaintiff’s business competitors. (Id. at ¶¶ 12-15.) In addition, Saini used Plaintiff’s name to finance the purchase of equipment for Flex Tooling Inc. and Flex Tooling LLC. (Id. at ¶ 26.) When Saini resigned as CEO, Plaintiff terminated several long tenured and experienced employees upon Saini’s advice. (Id. at ¶ 16.) Saini then hired the employees to work for Flex Tooling Inc. and Flex Tooling LLC. (Id. at ¶ 17.)

Plaintiff asserts six causes of action for: (1) breach of fiduciary duty; (2) breach of loyalty; (3) breach of good faith and fair dealing; (4) intentional interference with prospective economic relations; (5) negligent interference with prospective economic relations; and (6) unjust enrichment.

After filing the Complaint, Plaintiff filed an amendment substituting Flextronics for Doe 11 (the “Doe Amendment”).

Presently before the Court are: (1) Flextronics’ motion to strike the Doe Amendment; (2) Flextronics’ demurrer to the Complaint; and (3) Plaintiff’s motion for leave to file an amended complaint.

I. Motion to Strike

Flextronics moves to strike the Doe Amendment on the ground it was not filed in accordance with the law.

On a motion to strike portions of a pleading under Code of Civil Procedure section 435, a court may “[s]trike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” (Code Civ. Proc., § 436, subd. (b).)

First, Flextronics argues the Doe Amendment should be stricken on the ground it was not filed in conformity with the applicable laws because Plaintiff did not seek leave to amend prior to filing it. Flextronics asserts Plaintiff was required to seek leave of court because the time period set forth in Code of Civil Procedure section 472 had elapsed.

According to that statute, “[a] party may amend its pleading once without leave of the court at any time before the answer, demurrer, or motion to strike is filed, or after a demurrer or motion to strike is filed but before the demurrer or motion to strike is heard if the amended pleading is filed and served no later than the date for filing an opposition to the demurrer or motion to strike.” (Code Civ. Proc., § 472.) A party must file an answer, demurrer, or motion to strike within 30 days of the service of the complaint. (Code Civ. Proc., §§ 412.20, subd. (a)(3), 430.40, subd. (a), 435, subd. (b).) “After the responsive pleadings are filed an amendment to a complaint, including an amendment to add a defendant, requires leave of court.” (Woo v. Superior Court (1999) 75 Cal.App.4th 169, 175 (“Woo”), citing Code Civ. Proc., § 473.) An amendment made without the required leave of court may be stricken. (Estate of Walters (1949) 89 Cal.App.2d 797, 799-800; see Himmel v. City Council (1959) 169 Cal.App.2d 97, 101 [granting motion to strike where additional plaintiff added to complaint without leave of court].)

Here, Plaintiff filed the Complaint on April 13, 2016. Plaintiff filed the Doe Amendment over one year later on October 4, 2017, well after the period to amend the pleading without leave elapsed. Plaintiff concedes it was required to seek leave to amend the Complaint and did not. Plaintiff characterizes that omission as a mere procedural error because leave to amend is liberally granted. While it is true that leave to amend is generally liberally granted (see Royalty Carpet Mills, Inc. v. City of Irvine (2005) 125 Cal.App.4th 1110, 1124), there are various facts that a plaintiff must provide for the court to evaluate whether leave to amend should be granted, such as why the amendment is necessary and proper, why the amendment was not requested earlier, and when the newly alleged facts were discovered. (See Cal. Rules of Court, rule 3.1324(b).) As such, it is not a foregone conclusion that leave to amend will be permitted. The motion to strike the Doe Amendment will be granted.

Next, Flextronics contends the Doe Amendment should be stricken because Plaintiff failed to comply with Code of Civil Procedure section 474 (“Section 474”), which provides in relevant part that “[w]hen the plaintiff is ignorant of the name of a defendant, he must state that fact in the complaint, or the affidavit if the action is commenced by affidavit, and such defendant may be designated in any pleading or proceeding by any name, and when his true name is discovered, the pleading or proceeding must be amended accordingly.” To comply with Section 474, the plaintiff must have been genuinely ignorant of the defendant’s identity at the time he or she filed the original complaint. (Woo, supra, 75 Cal.App.4th at p. 177.) “If the requirements of section 474 are satisfied, the amended complaint substituting a new defendant for a fictitious Doe defendant filed after the statute of limitations has expired is deemed filed as of the date the original complaint was filed.” (Id. at p. 176.) Flextronics asserts Plaintiff failed to comply with Section 474 because Plaintiff knew its identity when this action was initiated. Flextronics further argues that, as a result, the Complaint is time-barred.

Flextronics’ argument is problematic because it is predicated exclusively on extrinsic evidence, such as declarations, deposition transcripts, and correspondence between the parties. The grounds for a motion to strike must appear on the face of the pleading or from matters which the court is required to judicially notice. (Code Civ. Proc., § 437.) Flextronics did not file a request for judicial notice and the face of the pleading does not reflect Plaintiff knew of Flextronics’ identity when it filed suit. As such, the motion to strike may not be granted on the basis Plaintiff purportedly failed to comply with Section 474.

Accordingly, the motion to strike the Doe Amendment is GRANTED on the ground Plaintiff filed it without leave of court. Moreover, the Court likely would not have permitted a Doe amendment if it had been requested, considering the complex nature of this case, and the lack of explicit allegations as to Flextronics’ involvement. If Plaintiff intends to bring a motion to substitute Flextronics for a Doe defendant, the Court may consider the application of Section 474 in connection with such motion. (See Cal. Rules of Court, rule 3.1324 [motion for leave to amend must be accompanied by declaration specifying, among other things, why the amendment is proper].)

II. Demurrer

Flextronics demurs to the fourth and fifth causes of action, the only causes of action asserted against it, on the ground of failure to state sufficient facts to constitute a cause of action. Flextronics asserts those claims are inadequately pleaded because Plaintiff fails to allege any wrongful conduct and improperly alleges certain facts on information and belief.

As Flextronics is not a party to this action because the motion to strike was granted, its demurrer is MOOT.

III. Motion for Leave to File an Amended Complaint

Plaintiff seeks leave to file an amended complaint to add allegations regarding Flextronics to cure defects identified in the demurrer and a new cause of action against Flextronics for inducement of breach of contract. This motion does not seek leave to substitute Flextronics for a Doe defendant; instead, it was made on the assumption Flextronics is already a proper defendant in this action.

Once again, Flextronics is not a party to this action because the motion to strike was granted. Accordingly, Plaintiff’s motion for leave to amend is MOOT.

The Court shall prepare the Order.