Case Number: BC637801 Hearing Date: July 24, 2018 Dept: 37

CASE NAME: Savala v. Wells Fargo Bank, N.A., et al.

CASE NO.: BC637801

HEARING DATE: 7/24/18

DEPARTMENT: 37

CALENDAR NO.: 10

FILING DATE: 11/3/16

FSC/TRIAL DATE: 10/22/18 (FSC); 10/30/18 (Trial)

NOTICE: OK

SUBJECT: Motion for Leave to File First Amended Complaint

MOVING PARTY: Plaintiff Debra Savala

OPPOSING PARTY: Defendant Wells Fargo Bank, N.A.
COURT’S TENTATIVE RULING

The court is inclined to DENY Plaintiff’s motion for leave to file a First Amended Complaint. Counsel for Defendant Wells Fargo Bank, N.A. to give notice.
STATEMENT OF THE CASE

This action arises from Plaintiff Debra Savala (“Savala”)’s allegedly wrongful termination from Wells Fargo Bank, National Association (“Wells Fargo”). Savala alleges that she was forced to take a medical leave of absence on December 19, 2014 and that Defendants terminated her and wrongfully filled her position in July 2015.

Plaintiff filed the Complaint on November 3, 2016, alleging seven causes of action for: (1) discrimination on the basis of disability in violation of the Fair Employment and Housing Act (“FEHA”); (2) failure to accommodate disability in violation of the FEHA; (3) failure to engage in the interactive process in violation of the FEHA; (4) violation of the California Family Rights Act (“CFRA”); (5) failure to hire in violation of the FEHA; (6) retaliation for exercising FEHA rights and (7) wrongful termination in violation of public policy.

Plaintiff now moves for leave to file a first amended Complaint and to add a prayer for injunctive and declaratory relief under the FEHA on the first through sixth causes of action and to add an eighth cause of action for injunctive relief under the Business and Professions Code. Defendant opposes the motion.
EVIDENTIARY OBJECTIONS

Plaintiff’s Objections to the Declaration of Terilynn Bench (“Bench Decl.”)

Overruled: 1-2
Sustained: 3-4

Objections 1-2: Overruled. Bench attests that she has been employed by Wells Fargo as an Accommodations Manager and that she testified as the person most knowledgeable on topics related to Savala. Declarant establishes personal knowledge for her testimony regarding Defendant’s consideration of Plaintiff’s status and Defendant’s leave and accommodations policies. (See Bench Decl. ¶¶ 3-5.)

Objections 3-4: Sustained. Bench attests she does not have any role in formulating Wells Fargo’s corporate policies. Bench cannot attest to the reasons for the change of its Job Search Leave policy or how long such policy will remain.
DISCUSSION
I. Procedural Considerations

A motion to amend a pleading before trial must (1) include a copy of the proposed amendment or amended pleading, which must be serially numbered to differentiate it from previous pleadings or amendments; (2) state what allegations in the previous pleading are proposed to be deleted, if any, and where, by page, paragraph, and line number, the deleted allegations are located; and (3) state 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).)

Plaintiffs have lodged a copy of the proposed FAC as Exhibit 1 to the Declaration of Ann Kam (”Kam Declaration”). The notice of the motion sets out the proposed changes by page number and line. This is sufficient to comply with the procedural requirement. (See Cal. Rules of Court, rule 3.1324(a).)

The motion must also be accompanied by a supporting declaration that specifies (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. (Id., rule 3.1324(b).)

The motion is accompanied by the Kam Declaration. Kam attests that the proposed amendments are necessary and proper for Plaintiff to assert a cause of action for injunctive and declaratory relief under the FEHA and Business and Professions Code. (Id. at ¶ 7.) Kam further attests that Plaintiff could not have requested leave to amend earlier because Plaintiff did not have standing and because she was waiting for additional information from Defendant. (Kam Decl. ¶ 6.)

According to Kam, Plaintiff previously lacked standing to seek injunctive and/or declaratory relief when she filed her original Complaint on November 3, 2016, because she was not a Wells Fargo employee at that time. (Ibid.) Plaintiff allegedly obtained standing after she accepted Defendant’s unconditional offer for restatement on October 9, 2017 and returned to work in late-2017 or early 2018. (Ibid.) Kam further attests that Defendant disclosed that a significant number of other employees were also fired after being denied a preferential reassignment through its discovery responses in December 2017 and that Defendant’s motion for summary judgment, which was filed on February 14, 2018, makes clear that Defendant has no intention of changing its allegedly illegal policy. (Ibid.) Kam states that Plaintiff needed this information to assert her additional claims. (Ibid.) This declaration is sufficient to meet the procedural requirement. (See Cal. Rules of Court, rule 3.1324(b).)
II. Substantive Considerations

Code of Civil Procedure, section 473, subdivision (a)(1), permits the court, in its discretion, to allow an amendment to any pleading “upon any terms that may be just.” Generally, California courts employ a liberal approach to amendment of pleadings in light of the strong policy favoring resolution of all disputes between parties in the same action. (See Nestle v. City of Santa Monica (1972) 6 Cal.3d 920, 939; Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 759-761 (Atkinson).)

Motions for leave to amend will normally be granted unless the party seeking to amend has been dilatory in bringing the proposed amendment before the court and the delay in seeking leave to amend will cause prejudice to the opposing party. (See Atkinson, supra, 109 Cal.App.4th at p. 761 [“ ‘[I]t is an abuse of discretion to deny leave to amend where the opposing party was not misled or prejudiced by the amendment.’ [Citations.] Furthermore, ‘it is irrelevant that new legal theories are introduced as long as the proposed amendments “relate to the same general set of facts.” [Citation.]’ ”]; see also Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 490 (Hirsa).) Indeed, “courts are much more critical of proposed amendments … when offered after long unexplained delay or on the eve of trial [citations], or where there is a lack of diligence, or there is prejudice to the other party [citations].” (Permalab-Metalab Equipment Corp. v. Maryland Cas. Co. (1972) 25 Cal.App.3d 465, 472.)
A. Delay

Plaintiff seeks leave to amend her Complaint to add a prayer for injunctive and declaratory relief under the FEHA on the first through sixth causes of action and to add an eighth cause of action for injunctive relief under the Business and Professions Code, based on Defendant’s allegedly unlawful policy of denying preferential reassignment to employees whose positions it filled while the employees were on medical leave and who were later released to return to work without restrictions. Plaintiff contends that she pled the existence of this allegedly illegal policy and its impact on other workers in the original Complaint, but that she lacked standing to seek injunctive relief on her behalf and the behalf of others until she started working for Defendant again in late-2017 or early 2018. (Mot. 1.) Plaintiff contends that she moved swiftly to seek leave to amend after she was reinstated and obtained standing, after she obtained additional discovery in December 2017, and after Defendant’s motion for summary judgment demonstrated that Defendant stands by and has no intention of changing its policy. (Mot. 8.) The court disagrees.

Kam attests that Defendant offered Plaintiff an unconditional offer of reinstatement on October 9, 2017 and that Plaintiff returned to work in “late-2017 or early 2018 based on Defendant’s offer.” Plaintiff does not provide a more specific date as to when she returned to work with Defendant; Defendant, in turn, presents evidence that Plaintiff returned to work effective approximately December 2017. Plaintiff filed the subject motion on June 29, 2018. Accordingly, Plaintiff has had standing to bring these additional claims for over 6 months prior to the filing of the subject motion.

The motion states that Plaintiff alleged the existence of Defendant’s policy and its impact on other workers in the original Complaint, which was filed on November 3, 2016. (Mot. 1.) Although Plaintiff argues that Defendant’s motion for summary judgment demonstrates that it stands by and has no intention of changing its policy and that Plaintiff has been seeking discovery on the number of alleged victims and the similarity of their factual scenarios to her situation (Mot. 8), Plaintiff does not explain why she needed this information in order to request injunctive and declaratory relief against Defendant, given that Plaintiff had knowledge of Defendant’s policy and its alleged impact on other employees in November 2016. Accordingly, the court finds that Plaintiff delayed by at least six months in filing the subject motion.

Nevertheless, the court recognizes that delay alone is insufficient to warrant denial of a motion for leave to amend. (See Atkinson, supra, 109 Cal.App.4th at p. 761.) A party opposing a motion for leave to amend must also demonstrate that it would be prejudiced by granting leave to amend. (See ibid.) The court now turns to the question of prejudice.
B. Prejudice

Plaintiff argues that Defendant would not be prejudiced by the amendment, as Plaintiff only seeks to add an additional legal theory and prayer for relief based on an allegedly illegal policy identified in the Complaint. (Mot. 9.) Defendant contends that it would be prejudiced by the proposed amendment because Plaintiff has sought leave to introduce new injunctive relief claims after Defendant filed a motion for summary judgment, which has since been fully briefed and for which the hearing has been twice continued. (Opp. 12.) Defendant filed its motion for summary judgment and supporting papers on February 14, 2018.

Courts have found prejudice exists where a party seeks leave to amend to add new claims after the filing of the opposing party’s motion for summary judgment or summary adjudication. (E.g., Melican v. Regents of Univ. of Cal. (2007) 151 Cal.App.4th 168, 175-176 (Melican); see id. at p. 176 [“It would be patently unfair to allow plaintiffs to defeat [a defendant’s] summary judgment motion by allowing them to present a ‘moving target’ unbounded by the pleadings.”].) “[A]mendments are usually allowed after summary judgments have been filed only to repair complaints that are legally insufficient—in other words, those that would be subject to a motion for judgment on the pleadings.” (Van v. Target Corp. (2007) 155 Cal.App.4th 1375, 1387, fn. 2 (Van).) Proposed amendments to state a different theory of recovery that are filed after a defendant moves for summary judgment are impermissible. (Ibid.; see also Falcon v. Long Beach Genetics, Inc. (2014) 224 Cal.App.4th 1263, 1280 (Falcon) [“[W]hen a plaintiff seeks leave to amend his or her complaint only after the defendant has mounted a summary judgment motion directed at the allegations of the unamended complaint, even though the plaintiff has been aware of the facts upon which the amendment is based, ‘[i]t would be patently unfair to allow plaintiffs to defeat [the] summary judgment motion by allowing them to present a “moving target” unbounded by the pleadings.’ ”].)

It is undisputed that Plaintiff knew of the facts underlying her proposed new claims—i.e., Defendant’s alleged policy and its effect on workers—at the time she filed the Complaint. (See Mot. 1.) Plaintiff did not, however, seek leave to amend for over 6 months after she claims she obtained standing and for over 4 months after the filing of Defendant’s motion for summary judgment. In these circumstances, the court finds that Defendant would be prejudiced by Plaintiff’s proposed amendment and additional legal theory.

On reply, Plaintiff contends that the proposed claims for injunctive and declaratory relief are derivative in nature and depend on a finding of disability discrimination and/or failure to accommodate. (Reply 7-8.) Plaintiff further asserts that she will stipulate to dismiss the proposed new claims if her claims for disability discrimination and failure to accommodate disability are dismissed on summary judgment. (Reply 8.) Plaintiff does not present legal authority for the proposition that prejudice can be cured by such a stipulation, and the court is inclined to deny the motion.

For the sake of completeness, the court will briefly address the parties’ remaining arguments regarding the sufficiency of the proposed amendments.
III. Sufficiency of the Pleading

Defendant contends that the court should deny the motion because Wells Fargo’s job search leave policy was lawful. While the court has discretion to deny an amendment that fails to state a cause of action or defense (Foxborough v. Van Atta (1994) 26 Cal.App.4th 217, 230), the court should not normally consider the viability of the proposed amendments in deciding whether or not to grant a motion for leave to amend a pleading. (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048 (Kittredge) [“even if the proposed legal theory is a novel one, ‘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’ ”].)

The lawfulness of Defendant’s job search leave policy is an issue before the court on Defendant’s motion for summary judgment, and the court will not make a ruling on this issue through the subject motion for leave to amend. Accordingly, the court will not deny the motion on this basis. (See Kittredge, ibid.)

Defendant also argues that the court may exercise its discretion and deny a plaintiff leave to amend when the proposed amendment is moot. According to Wells Fargo, the claims for injunctive relief are not appropriate because the facts underlying Plaintiff’s claims are unlikely to repeat itself and because Wells Fargo changed its job search leave policy effective April 1, 2018. (Opp. 9-10.)

Plaintiff cites cases including Aguilar v. Avis Rent a Car System, Inc. (1999) 21 Cal.4th 121, 132-133 to argue that a plaintiff’s claim for injunctive relief is not mooted by a defendant’s change of conduct during the pendency of litigation. (See id. at p. 133 [“The mere fact that a defendant refrains from unlawful conduct during the pendency of a lawsuit does not necessarily preclude the trial court from issuing injunctive relief to prevent a posttrial continuation of the unlawful conduct.”]. [1] Plaintiff’s cited legal authority demonstrates that Defendant’s alleged change in policy is not sufficient to render the proposed claims moot. Accordingly, the court will not deny the motion on this basis. (See also Kittredge, 213 Cal.App.3d at p. 1048.)
IV. Conclusion

In sum, the court finds that Plaintiff unreasonably delayed by at least six months prior to filing the subject motion and that Defendant would be prejudiced by a grant of the subject motion. The court is therefore inclined to DENY Plaintiff’s motion for leave to amend her Complaint.

[1] Defendant cites Aguilar for the proposition that a plaintiff is not entitled to injunctive relief where the employer proves it is unlikely to repeat the practice. (Opp. 9, citing Aguilar, supra, 21 Cal.4th at p. 140.) The immediately following sentence of Aguilar, however, states: “An employer that takes curative actions only after it has been sued fails to provide sufficient assurances that it will not repeat the violation to justify denying an injunction.” (Aguilar, ibid.) Aguilar does not support Defendant’s argument that its change of policy is sufficient to moot Plaintiff’s proposed claims.