Case Number: BC524865    Hearing Date: September 04, 2014    Dept: 34

Moving Party: Defendants American World Food Inc. dba Shalom and Sons Wholesale Food Co., and Shalom Fitusi (“defendants”)

Resp. Party: Plaintiff Art Geilman (“plaintiff”)

Defendants’ motion for leave to amend is GRANTED.

BACKGROUND:

Plaintiff commenced this action on 10/18/13 against defendant for: (1) breach of oral contract; (2) breach of oral contract; (3) failure to pay wages; (4) fraud; and (5) unfair business practices. Plaintiff worked for defendant as a sales representative and sales manager since 2000. (Compl., ¶ 8.) In 2007, defendant told plaintiff that if he helped defendant with the sales and distribution of products from Mitzva Farm Cheese (“Mitzva”), defendant would give plaintiff a compensation bonus of 3% of all of their sales of the products. (Id., ¶¶ 9-10.) In 2008, defendant told plaintiff that if he assisted defendant in expending its business with Smith Food King (“Smith”), defendant would give plaintiff a compensation bonus of 3% of all sales made by defendant to Smith. (Id., ¶ 14.) In 2012, plaintiff asked defendant about the status of these bonuses, but defendant ignored plaintiff’s requests and otherwise informed plaintiff that he would not receive any such bonuses. (Id., p 17.) Plaintiff’s employment with defendant ended on 5/15/13 without any payment or compensation for the bonuses. (Id., ¶ 18.)

Defendants filed an answer to the complaint on 12/3/13.

On 6/27/14, the Court denied defendant’s motion for summary judgment. Among other findings, the Court concluded that defendant could not rely on the affirmative defense of modification because it was not sufficiently raised or pleaded in the answer. The Court also found that defendant had failed to establish that the agreement was modified.

ANALYSIS:

Defendants seek leave to file an amended answer to add an affirmative defense that plaintiff’s claims have been modified by plaintiff’s conduct.

Procedural analysis

Under California Rules of Court rule 3.1324(a):

(a) 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.

Subdivision (b) of rule 3.1324 requires the motion be accompanied by a separate declaration, specifying: (1) the amendment’s effect, (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.

Defendants provide a proposed first amended answer. The notice of motion describes the material amendment to the answer. (See Notice, p. 1:13-18.)

Defendants provide a supporting declaration from defense counsel Benjamin Kiss. Kiss declares that plaintiff’s deposition was taken on 11/19/13, and shortly thereafter he decided to bring a summary judgment motion. (Kiss Decl., ¶¶ 4, 6.) Kiss declares that he learned the facts underlying the modification defense while researching the MSJ. (Id., ¶ 6.) The MSJ was filed on 4/2/14. (Id., ¶ 7.) The Court denied the MSJ on 6/27/14. Defendants filed the instant motion on 7/30/14. Defense counsel asserts that leave to amend is necessary because the modification defense will be waived if not asserted. (Id., ¶ 15.)

The Court is somewhat concerned with the delay in making this request for leave to amend, and the Declaration fails to explain why the request for amendment was not made earlier. Though defendants repeatedly assert that plaintiff argued “for the first time” in his opposition (filed 6/3/14) that the answer did not include the affirmative defense, this does not explain defendants’ lack of diligence. (See, e.g., Kiss Decl., ¶ 8.) Defendants clearly knew of the affirmative defense by at least 4/2/14 (when the MSJ was filed). Defense counsel provides no explanation for its apparent lack of awareness that modification was an affirmative defense that must be pleaded in the answer. This raises the question as to whether counsel acted “promptly” in waiting over a month after the Court’s ruling on the MSJ to bring the instant motion.

Although this raises concenrs, the Court will not deny the motion for this reason.

Substantive Analysis

California Code of Civil Procedure section 473, subd. (a)(1) states: “The court may . . . , in its discretion, . . . allow, upon any terms as may be just, an amendment to any pleading or proceeding.” Although granting the motion is entirely within the Court’s discretion, denial is rarely justified:

If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend and where the refusal also results in a party being deprived of the right to assert a meritorious cause of action or a meritorious defense, it is not only error, but an abuse of discretion.

(Morgan v. Sup. Ct. (1959) 172 Cal.App.2d 527, 530.)

To the extent that plaintiff attacks the sufficiency of the proposed amended allegations, this argument is not well taken. The Court is “bound to apply a policy of great liberality in permitting amendments to the [pleadings] ‘at any stage of the proceedings, up to and including trial,’ absent prejudice to the adverse party.” (Weil & Brown, Cal. Prac. Guide: Civ. Proc. Before Trial (The Rutter Group 2013) ¶ 6:652 [quoting Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761][emphasis in original].) A court ordinarily will not consider the validity of the proposed amended pleading in deciding whether to grant leave to amend, and grounds for demurrer or motion to strike are premature. (Id., ¶ 6:644.) The fact that the Court rejected the modification defense in its ruling on the MSJ does not establish that the defense is completely without merit.

Though plaintiff asserts that he will be prejudiced, he provides absolutely no evidence to support this assertion. Plaintiff does not attach any declaration to his opposition. Plaintiff has presented no evidence as to what discovery will be needed, if any; whether any evidence has been or will be lost; or if there will be any additional expenses.

Defendants’ motion for leave to amend is GRANTED.