Case Number: BC534983    Hearing Date: November 07, 2014    Dept: 34

Moving Party: Defendants William H. Gaines Jr. and W.H. Gaines Company (“defendants”)

Resp. Party: Plaintiffs John P. McNicholas and Diana S. McNicholas (“plaintiffs”)

Defendants’ motion to strike the second amended complaint is GRANTED. Because the motion to strike is granted, the demurrer to the second amended complaint is moot.

PRELIMINARY COMMENTS:

In their opposition to the demurrer to the First Amended Complaint plaintiff stated admitted that the “second cause of action . . . is not eloquently drafted and if the court were to surmise that it was pled in haste, the court would be correct.” (Opp., p. 1:23-27.)

Plaintiff’s opposition to the motion to strike and demurrer to the Second Amended Complaint seems to suffer from the same drafting flaw. For instance, plaintiffs argue that defendants failed to tell plaintiffs that there would be “a balloon payment which would arise while the policy was in force and cause the quarterly premiums of $89,400 to unexpectedly jump to $54,047.68.” (Opp., p. 2:19-21.) This Court would assume that if the quarterly premiums had actually dropped from $89,400 to $54,047, plaintiffs would have been very happy.

The Court also notes that the bulk of plaintiffs’ opposition is, in effect, a motion to be relieved from default pursuant to CCP §473. Plaintiff has not filed any such § 473 motion; this argument is irrelevant to the Motion to Strike.

BACKGROUND:

Plaintiffs commenced this action on 1/31/14 against defendants for professional negligence. On 3/14/14, plaintiffs filed a first amended complaint (“FAC”) against defendants for professional negligence and elder abuse. On 7/2/14, the Court sustained defendants’ demurrer to the first amended complaint, with leave to amend.

Plaintiffs filed a second amended complaint (SAC) on 8/12/14. Plaintiffs allege that defendants sold a life insurance policy to plaintiffs insuring John P. McNicholas’s life for $2,000,000.00. (SAC ¶ 5.) Plaintiffs allege that they reasonably relied on defendants to identify and procure the correct type of life insurance. (Id., ¶ 6.) In 2008, defendants sold plaintiff a new life insurance policy for $4,000,000.00 by, in part, “settling” the previous policy. (Id., ¶¶ 9-10.) As part of the settlement of the previous policy, defendants hired and had plaintiffs apply to Credit Suisse Life Settlements, Inc. (Id., ¶ 10.) Plaintiffs allege that Credit Suisse paid Leisure, Werden and Terry Agency a commission of $10,000.00 from the previous policy face value. (Id., ¶ 12.) Plaintiffs did not know that the sale price to settle the previous policy included the commission. (Id., ¶ 13.) Plaintiffs paid the premiums on the new policy until it was unexpectedly and unilaterally canceled on 7/10/13. (Id., ¶ 14.) Defendants told plaintiff that this was a mistake that he would correct. (Id., ¶ 15.) Defendants have not corrected the mistake and plaintiffs lost the settlement value of the previous policy and remain uninsured. (Id., ¶ 16.)

ANALYSIS:

Defendants move to strike the entire SAC because it was not timely filed. On 7/2/14, the Court sustained defendants’ demurrer to the FAC, with leave to amend. The Court did not expressly state when the amended complaint was to be filed. However, the California Rules of Court provide: “Following a ruling on a demurrer, unless otherwise ordered, leave to answer or amend within 10 days is deemed granted, except for actions in forcible entry, forcible detainer, or unlawful detainer in which case 5 calendar days is deemed granted.” (CRC rule 3.1320(g).) Plaintiff acknowledges this deadline and admits that the SAC was filed 20 days late. (See McNicholas Decl., ¶ 5.)

“[F]ailure to file an amended complaint within the time allowed by the court [after a demurrer is sustained] subject[s] any subsequently filed pleading to a motion to strike, either by defendants or on the court’s own motion.” (Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 613.)

Plaintiffs submit a declaration from plaintiffs’ counsel (and plaintiff) John P. McNicholas, who takes fault for the failure to timely file the SAC. This declaration is improper for a motion to strike because it constitutes extrinsic evidence. (See Code Civ. Proc., § 437; Weil & Brown, Civ. Proc. Before Trial (The Rutter Group 2013) ¶ 7:169.) Plaintiffs did not seek and were not granted leave to file an untimely SAC.

Defendants’ motion to strike is GRANTED. Because the motion to strike is granted, the demurrer is moot.