05AS03035

Wei-Jen (Harrison) Luan vs. Howard Stagg

Nature of Proceeding:     Motion to File Amended Complaint against D. Thomas Woodruff

Filed By:   Bitzer, Brett E.

Plaintiff Wei-Jen (Harrison) Luan’s motions to file first amended complaints against
defendants D. Thomas Woodruff and Woodruff, O’Hair & Posner, Inc., and against
Defendant Howard Stagg are granted.

Plaintiff’s joint request for judicial notice is granted.

The legal malpractice action has an extensive procedural history.  The original
complaints in this legal malpractice action were filed in 2004 against the Woodruff
Defendants and in 2005 against defendant Howard Stagg and allege that Plaintiff
entered into numerous real estate transactions while being represented by then
defendants.  The matters were later consolidated in 2006 and stayed from July 2006
until October 2012 during which numerous underlying lawsuits related to Plaintiff’s
alleged damages in this action were resolved.

Plaintiff now seeks to amend the complaints in the consolidated action to clarify that  she is bringing the consolidated action in her individual capacity and in her capacity as
trustees of the Wei-Jen Revocable Trust and that she is seeking damages suffered as
trustee of the Trust, a limited partner of Harrison Family Enterprises (which she claims
was a direct beneficiary of the defendants’ negligent legal advice).

“Trial courts are vested with the discretion to allow amendments in the furtherance of
justice… That Trial courts are to liberally permit such amendments, at any stage of the
proceeding, has been established policy in this state…resting on the fundamental
policy that cases should be decided on the merits.”  (Hirsa v Superior Court (1981) 118
Cal.App.3d 486, 488-489.)  Judicial policy favors resolution of all disputed matters
between the parties in the same lawsuit.  Thus, the court’s discretion will usually be
exercised liberally to permit amendment of the pleadings.  (See Nestle v. Santa
Monica (1972) 6 Cal.3d 920,939; Mabie V. Hyatt (1998) 61 Cal. App.4th 581, 596
(citing text). Howard v. County of San Diego (2010)184 Cal.App.4th 1422, 1428.”
California Civil Procedure Before Trial (2012, Rutter) § 6:638 – 6:339.)

Both the Woodruff Defendants’ and Defendant Howard Stagg’s opposition focus
almost entirely on the merits of the proposed amendments.  Indeed, they argue that
Plaintiff is essentially seeking to allege that she, as a trustee of the Trust, was a limited
partner of HFE II and thus seeks damages sustained by HFE II as a result of
Defendants’ alleged legal malpractice and that a limited partner cannot assert a direct
or derivative action.  Instead, Defendants argues that the partnership must bring suit
and that any such action would be barred by the statute of limitations.

However, the validity of a proposed amendment is generally not considered in deciding
whether to grant leave to amend and the Court declines to do so at this point in time.  (
California Casualty General Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274, 280
-281 [disapproved on other grounds in Kransco v. American Empire Surplus Lines Ins.
th
Co. (2000) 23 Cal.4   390, 407.]  Defendants are free to challenge the validity of the
amendments by way of an appropriate motion.

In addition, while Defendant Stagg argues that Plaintiff has delayed eight years in
seeking leave to amend, the Court refuses to deny leave on that basis.  Indeed, a trial
court has discretion to deny a motion for leave to amend where both “inexcusable
delay and probable prejudice” is shown.  (Magpali v. Farmers Group (1998) 48
th
Cal.App.4   471, 487-488 [leave to amend made on the eve of trial properly denied in
the trial court’s discretion where the new cause of action would have greatly expanded
the case after the “trial date was set, the jury [was] about to be impaneled, counsel, the
parties, the trial court, and the witnesses [had] blocked the time, and the only way to
avoid prejudice to the opposing party is to continue the trial date to allow further
discovery…”].)  First, the Court finds that Plaintiff has not inexcusably delayed as the
action was stayed between 2006 and October 2012.  Further, Defendant Stagg did not
even answer the complaint until July 31, 2013 and the proposed amendment responds
to an affirmative defense set forth in that pleading.  (Bitzer Decl. ¶ 9; RJN Exh. 12.)
Plaintiff’s present counsel substituted in as counsel of record on October 25, 2013, and
the instant motion was filed in December 2013 (it has been continued at the request of
the parties).  The Court does not find inexcusable delay.  In any event, there is no
showing of prejudice.  Indeed, Defendant Stagg simply states in the motion that
substantial work will need to be repeated at significant expense but, no declarations
were submitted with the opposition papers.  Arguments of counsel are not evidence.  (
Porterville Citizens for Responsible Hillside Development v. City of Porterville (2007)
th
157 Cal.App.4   885, 895, fn. 9. [“It is axiomatic that arguments of counsel are not
evidence”].)  Further, unlike Magpali, the request has not been made on the eve of
trial.  Indeed, the March 24, 2014, trial date has been vacated.

The motions are granted.

Plaintiff shall file and serve the proposed amended complaints no later than Tuesday,
February 18, 2014.

The minute order is effective immediately.  No formal order pursuant to CRC Rule
3.1312 or further notice is required.