2011-00112653-CU-BC

Windmill Place Apartments vs. California Single Ply, Inc.

Nature of Proceeding: Motion to File Amended Complaint

Filed By: Tweedy, Charles A.

Plaintiff Windmill Place Apartments, LLC’s motion for leave to file an amended
complaint is granted.

Plaintiff seeks to amend its complaint to allege facts supporting a theory of equitable
estoppel in response to Defendant California Single Ply’s CCP § 337.15 statute of
repose. CCP 337.15 states that no action to recover damages for latent deficiencies
may be brought more than ten years after substantial completion. This includes claims
for breach of express warranty. Moseley v Ned. H. Abrams (1985) 170 Cal.App.3d
355; Lantzy v Centex Homes (2003) 31 Cal.4th 363. Pursuant to Lantzy, the 10 year
period is not tolled or extended by promises of repairs or periods in which repairs
occur. Therefore, there is no “equitable tolling” under this statute. However, equitable
estoppel addresses the circumstances in which a party will be estopped from asserting
the statute of limitations as a defense to an admittedly untimely action because his
conduct has induced another into forbearing suit within the applicable limitations
period, and thus equitable estoppel is a defense to the 10 year statute or repose in §
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337.15. (Lantzy v. Centex Homes (2003) 31 Cal.4 363, 384.) Plaintiff contends that

it was unaware of the facts supporting estoppel when it filed its complaint and that it
needs to amend its complaint to raise the theory in order to successfully oppose
Defendant’s upcoming motion for summary judgment based on CCP § 337.15.
Plaintiff’s counsel’s declaration indicates that it became aware of the facts giving rise
to the proposed amendment “on or about January 19, 2012, when the roofs were
inspected…” (Scalia Decl. ¶ 4.) He declares that the request for amendment was not
made earlier because apparently he was unaware that Defendant would rely upon
CCP § 337.15 as a defense because although that section was cited in Defendant’s
answer, it was not identified in its response to form interrogatory 15.1, which requires
an identification of each affirmative defense. He declares that it was not until
Defendant’s motion for summary judgment, filed on October 17, 2013, that he became
aware of the need to request an amendment.

Defendant argues that Plaintiff has unreasonably delayed because it learned of the
facts in January 2012, but has waited almost two years to seek an amendment. It also
argues that Plaintiff’s contention that it had no reason to know it needed to request an
amendment earlier is disingenuous given that one month prior to Defendant filing its
motion Plaintiff’s counsel sent Defendant’s counsel an email on the equitable estoppel
issue. Defendant claims it will be prejudiced because, without the amendment, it will
prevail on its motion for summary judgment, as the equitable estoppel theory is the
only basis on which Plaintiff can defeat the motion.

“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.

Certainly, unwarranted delay in presenting an amendment may-of itself-be a valid
reason for denial. (Huff v. Wilkins (2006) 138 Cal.App.4th 732, 746). Here, while there
has been a delay between the time Plaintiff learned of the facts giving rise to the
amendment and the request, specifically, almost two years, the Court finds the delay
does not warrant denial of the motion. A trial court has discretion to deny a motion for
leave to amend where both “inexcusable delay and probable prejudice” is shown. (
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Magpali v. Farmers Group (1998) 48 Cal.App.4 471, 487-488. Here, the delay is not
inexcusable nor unexplained. Indeed, while Plaintiff could certainly have made the
request sooner given the concession that the facts have been known since January
2012, and because the CCP § 337.15 defense was alleged in Defendant’s answer,
Plaintiff’s counsel’s declaration is sufficient to explain the delay. Counsel did not fully
appreciate that Defendant would rely upon § 337.15 as a defense until the October 17
motion for summary judgment was filed, given his review of Defendant’s verified
response to form interrogatory 15.1 which did not specifically reference that section.
Plaintiff cannot be faulted for taking defendant at its word [verified responses]. This
distinguishes the instant situation from the authority cited by Defendant in which a
plaintiff was not allowed to amend its complaint to allege an equitable estoppel theory

where it knew of the facts giving rise to the theory at the time they filed their lawsuit
and did not present any reasons why the amendment was not presented earlier. (
Lantzy, supra, at 387.) By contrast here, Plaintiff did not discover the facts until after
the complaint was filed and has presented a reason as to why the amendment was not
requested earlier. The Court is not unmindful of Defendant’s arguments regarding the
sincerity of this reason in light of the letter from Plaintiff’s counsel one month prior to
the date it filed its summary judgment motion discussing equitable estoppel. However,
the Court finds that under the circumstances, the delay is not inexcusable.

In addition, even if the delay was inexcusable, Defendant has not shown prejudice
sufficient to deny the motion. Indeed, its only argument in this regard is that allowing
the amendment could preclude its motion for summary judgment from being granted
and that it is akin to requesting leave on the eve of trial. This amendment, however, is
not on the eve of trial. Further, that the amendment may allow Plaintiff to successfully
oppose Defendant’s summary judgment motion set in January 2014, is not the type of
prejudice to warrant denying the motion. It is well established that California courts
have a policy of great liberality in allowing amendments at any stage of the proceeding
so as to dispose of cases upon their substantial merits where the authorization does
not prejudice the substantial rights of others. Indeed, it is a rare case in which “a court
will be justified in refusing a party leave to amend his or her pleading so that he or she
may properly present his or her case. Thus, absent a showing of prejudice to the
adverse party, the rule of great liberality in allowing amendment of pleadings will
prevail. Board of Trustees v. Superior Court (2007) 149 Cal. App. 4th 1154, 1163.
Moreover, Section 473 of the Code of Civil Procedure authorizes the trial court, in its
discretion, to allow amendments in furtherance of justice. The policy of great liberality
in permitting amendments at any stage of the proceeding has been declared by our
courts. (Klopstock v. Superior Court, (1941) 17 Cal.2d 13, 19-20.)

Finally, while Defendant attempts to attack the merits of the equitable estoppel theory,
the Court finds that now is not the appropriate time to raise such a challenge. Indeed,
the validity of a proposed amendment is generally not considered in deciding whether
to grant leave to amend. (California Casualty General Ins. Co. v. Superior Court
(1985) 173 Cal.App.3d 274, 280-281 [disapproved on other grounds in Kransco v.
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American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4 390, 407.]

Plaintiff shall file and serve the proposed amended complaint, no later than December
10, 2013.

This minute order is effective immediately. No formal order pursuant to CRC rule
3.1312 or other notice is required.