The Motion of Defendant Northrop Grumman Systems Corporation for Leave to File a Cross-Complaint is DENIED.

STATMENT OF DECISION:

The Court bases the Order After Hearing of this date upon the following Statement of Decision:

1. This is an unlimited jurisdiction negligence, premises liability, professional negligence case in which Plaintiff Steven Early sustained injuries on a site controlled by the Northrop Grumman defendants, while operating a vehicle. Steven Early was taken to Defendant Antelope Valley Hospital, and discharged. Steven Early was later diagnosed with a cervical spine fracture, which required a surgical procedure.

2. On February 21. 2013, Plaintiffs filed their complaint: (1) negligence; (2) premises liability; and, (3) (professional) negligence.

3. On May 3, 2013, Defendant Northrop Grumman Systems Corporation filed a Notice of Removal. The district court issued an order for remand on July 24, 2013.

4. On August 14, 2013, the court set a jury trial for May 23, 2014.

5. On January 16, 2014, Plaintiffs dismissed the premises liability cause of action with prejudice.

6. On February 19, 2014, the parties stipulated to the hearing of seven motions for summary judgment by the healthcare defendants for April 22, 2014.

7. On February 21, 2014, Defendant Northrop Grumman Systems Corporation filed this Motion for leave to file a cross-complaint for express contractual defense and indemnity, declaratory relief, and equitable indemnity. Northrop Grumman Systems Corporation contends plaintiff Steven Early, working as a sole proprietor under the name John’s Welding Service, worked on the premises pursuant to a “purchase order.” The operative “purchase order” contained an indemnity clause in favor of Northrop Grumman Systems Corporation in cases of a claim made against Northrop Grumman Systems Corporation for an act or omission by the vendor.

8. Following the completion of certain discovery Northrop Grumman Systems Corporation discovered that Steven Earl was not wearing his seatbelt while operating the vehicle. Northrop Grumman Systems Corporation subsequently tendered a claim for defense to John’s Welding Service’s insurance carrier.

9. Northrop Grumman Systems Corporation contends the clause in the last contract contains an indemnity clause: “Seller . . . shall take all necessary precautions to prevent the occurrence of any injury . . . of any persons . . . arising out of acts or omissions of such agents, employees, or subcontractors . . . Seller shall indemnify, defend, and hold Buyer . . . harmless from any and all costs, losses, expense, damages, claims, suit or any liability whatsoever . . . .”

10. Plaintiff contends that this cause of action gives Plaintiff the right to seek statutory remedies under Bus. & Prof. Code § 7031(b) and CCP § 1029.8.

11. On March 4, 2014, Plaintiffs filed their Opposition. Plaintiffs contend that the cross-complaint was compulsory and that defendant unreasonably delayed in bringing the motion. Defendant knew Steven Earl was not wearing his seatbelt before it took his deposition in December 2013. Defendant knew the seatbelt was broken since the day of the incident. Defendant also knew of the indemnity clause the entire time. Defendant cannot show a lack of prejudice given the impending April 23, 2014 discovery cut-off and May 23, 2014 trial date. Finally, the proposed cross-complaint is invalid, since plaintiff Steven Earl is not an employee of John’s Welding.

12. On March 11, 2014, Defendant filed their Reply. Northrop Grumman Systems Corporation contends that even if the motion was late or meritless, there is no showing of bad faith. Defendant re-asserts that they did not know the facts to support the Cross-Complaint until the deposition of Plaintiff was conducted. Plaintiff fails to provide any facts to show any bad faith on the part of Defendant. Defendant further re-asserts that Plaintiff will not prejudiced by the cross-complaint. Any such prejudice can be mitigated by a continuance of the discovery cut-offs and trial date. Defendant will be prejudiced in that the Cross-Complaint is compulsory, as admitted by Plaintiff, and Defendant would not be able to bring a separate claim for indemnity.

13. Procedural Analysis: CRC Rule 3.1112(a) states that a motion is required to have (1) a notice of hearing on the motion; (2) the motion itself; and (3) a memorandum in support of the motion or demurrer. CRC Rule 3.1112. CRC Rule 3.1113(a) further provides that “a party filing a motion . . . must serve and file a supporting memorandum [and that] [t]he court may construe the absence of a memorandum as an admission that the motion…is not meritorious and cause for its denial.” CRC Rule 3.1113(a). In this case, Plaintiff’s Motion contains a notice of hearing on the motion, the motion itself and a memorandum of points and authorities in support. Accordingly, we conclude that Plaintiff has complied with CRC Rules 3.1112(a).

14. Leave to File a Cross-Complaint: Cross-claims against complainants arising from the same transaction or series thereof, existing at the time of filing an answer, are compulsory. See, e.g., CCP §426.30(a); Al Holding Co. v. O’Brien & Hicks, Inc. (1999) 75 Cal.App.4th 1310, 1313-14.

15. Leave to file compulsory cross-complaints must be granted where moving parties acted in good faith. CCP §426.50; Silver Organizations, Ltd. v. Frank (1990) 217 Cal.App.3d 94, 98-99.

16. Judges have discretion to deny leave to file permissive cross-complaints, including based upon a finding of unexplained delay, depending upon the interests of justice. Crocker Nat. Bank v. Emerald (1990) 221 Cal.App.3d 852, 864; CCP §428.50(c).

17. Cross-complaints against parties other than plaintiffs or cross-complainants are permissive, and while efficiency may be gained by resolving claims in cross-complaints filed in one action, courts may require parties to pursue separate actions. Insurance Co. of No. America v. Liberty Mut. Ins. Co. (1982) 128 Cal.App.3d 297, 303.

18. Cross-complaints for equitable indemnity against third parties are virtually always related to the main action and are thus permissive. Time for Living, Inc. v. Guy Hatfield Homes (1991) 230 Cal.App.3d 30, 38.
19. The facts alleged in the proposed cross-complaint regarding Plaintiff’s failure to wear a seat belt and the defense and indemnification provisions in the “purchase order” existed at the time the Answer was filed. This is not in dispute. Thus, the factual allegations are proper for a cross-complaint, whether it be compulsory or permissive.

20. The titles to the causes of action within the proposed cross-complaint show that the proposed cross-complaint is permissive and not compulsory. Indemnification claims, whether contractual or equitable, do not arise until after a finding of liability in the main action. However, the first cause of action’s allegation regarding a duty to defend arises at the filing of the underlying Complaint, which could arguably make that claim a compulsory claim.

21. Even though the proposed cross-complaint is against the Plaintiff, which could mean the action is compulsory, the gravamen of the claims, as described above, are permissive. Because the gravamen of the claims in the proposed cross-complaint is for indemnification, the proposed cross-complaint is permissive.

22. The legal authority provides that the Court has discretion in deny a party to file a permissive cross-complaint based unexplained delay.

23. The evidence presented shows that Defendant delayed in filing the instant motion. Defendant’s Answer was filed on May 1, 2013 and the instant motion was filed on February 21, 2014, nearly ten months after the Answer was filed.

24. Defendant attempts to explain the delay based upon Counsel’s lack of knowledge regarding the defense/indemnification provisions in the purchase order and Plaintiff’s failure to wear a seat belt. Counsel provides that she first learned of these facts in December 2013 during depositions.

25. However, the correspondence between Defendant’s insurer, Chartis, and Plaintiff’s counsel (Defendant’s Exhibits 3, 4, 6 & 7) provide that Defendant, through its insurer, had knowledge of its claims for contractual defense and indemnification. Further, the accident reports by the US Air Force and Defendant’s own investigator (Plaintiff’s Exhibits 1 & 2) show that Defendant had knowledge the day after the accident that Plaintiff was not using the seatbelt at the time of the accident. With these facts, it is evident that Defendant had knowledge of the facts that support the cross-complaint. Counsel’s attempt to explain the failure to file the cross-complaint with the answer is unavailing because Defendant’s knowledge of the facts prior to the filing of Plaintiff’s Complaint contradicts her explanation.

26. Further, issues of whether the proposed pleading is valid are not proper issues herein and are better suited for a subsequent demurrer or motion to strike.

27. Accordingly, Defendant’s Motion for Leave to File a Cross-Complaint is DENIED.