2019-00253627-CU-BT

David Fred Blakefield vs. James Louren Franklin

Nature of Proceeding: Motion to File First Amended Complaint

Filed By: Finelli, Stephanie J.

Effective September 23, 2019, official court reporters will not be available in Departments 53 and 54, with exceptions listed in the Court’s Policy Regarding Availability and Unavailability of Official Court Reporters. Additional information regarding this policy can be found on the Court’s website at www.saccourt.ca.gov.

Plaintiffs David Fred Blakefield’s (“Blakefield”) motion for leave to file a First Amended Complaint (“FAC”) is GRANTED.

Defendants James Lorin Franklin (erroneously sued herein as James Louren Franklin) (“Franklin”) and Marron Road Ventures, LLC (erroneously sued herein as Marron Road Ventures) (“MRV”) filed an untimely opposition on September 23, 2019, only seven Court days prior to the hearing in violation of CCP § 1005. While the Court in its discretion has considered the untimely opposition in reaching its ruling, Defendants are advised that any further failure to comply with applicable rules may result in adverse rulings.

This is an indemnity action arising out of a judgment entered against Blakefield in Sonoma County, Lonich v. Blakefield et al., Sonoma County Case number SCV-258490 (the “Underlying Action”). Defendant Franklin was a witness in that action. He testified that he had entered into an agreement with David Lonich (“Lonich”), the plaintiff in the Underlying Action, whereby Blakefield would pay Lonich 7.5% of Blakefield Construction’s gross proceeds from a construction project that Franklin had procured for Blakefield Construction. Blakefield’s defense in that Underlying Action was that Franklin was not his agent. The Court found otherwise, as Blakefield had given Franklin authority to, among other things, find jobs and enter into construction contracts. Based thereon, the Court entered judgment against Blakefield based upon the agreement Franklin had made with Lonich. Lonich subsequently assigned the Judgment to MRV, Franklin’s limited liability company, as trustee of something called the “M&J Gift Trust.”

Plaintiff filed the instant Complaint on April 2, 2019, against Franklin and MRV for indemnity, breach of fiduciary duty, and tort of another.

Plaintiff also filed an appeal to the First District. On September 4, 2019, this Court

denied Defendants’ motion for stay or abatement of this action. (ROA 20.)

Plaintiff contends that in MRV’s Respondent’s Brief in the appeal MRV stated, among other things, that part of Franklin/MRV’s duties as Blakefield’s agent required Franklin to pay all third parties prior to taking any draws and that Franklin’s and MRV’s own remuneration was the remainder of Blakefield Construction’s after-tax profit, after payment of all third parties who were owed money. Plaintiff’s counsel declares these facts were first discovered on August 13, 2019, when MRV filed its Respondent’s Brief.

Plaintiff seeks leave to amend the Complaint to add the foregoing legal and factual bases for the Complaint. Specifically, Plaintiff seeks to add allegations that Defendants were required to pay all third parties and all debts of Blakefield Construction prior to taking any draws, but that Defendants had not made any payments to David Lonich prior to taking draws totaling over $231,000.

Plaintiff contends Defendants will not be prejudiced by the amendment because this action is in its infancy, trial has not been set, and discovery has been on hold per stipulation pending the outcome of the motion to abate (which has since been denied by this Court on September 4, 2019).

In opposition, Defendants argue that Plaintiff and his prior counsel, Timothy Lopez, were present at the trial of the Underlying Action in August of 2018, during which Franklin testified to the facts Blakefield allegedly just learned through MRV’s Respondent’s Brief. Defendants also argue even if Plaintiff did not tell his current counsel in this action (Ms. Finelli) about the testimony in the Underlying Action, she had the testimony since late January of 2019. Defendants argue the reporter’s transcript contains Franklin’s testimony that Mr. Blakefield was to be paid $2,000 per week, and after this payment to Blakefield and the payment of all payroll expenses, insurance, and third party contracts, Franklin was entitled to receive anything left. (Abramson Decl. Exh. 1.) Defendants argue based on the foregoing that a sufficient excuse has not been offered for the tardy motion seeking leave to amend.

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. (Board of Trustees v. Sup. Ct. (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. Sup. Ct. (1941) 17 Cal.2d 13, 19-20.) However, courts should not permit an amendment “where it would not serve any useful purpose.” (Maple Properties v. Harris (1984) 158 Cal.App.3d 997, 1012.) Additionally, although it is true that amendments to pleadings are to be granted with great liberality, it is equally well established that an unwarranted delay in seeking to amend is one valid ground on which to deny a motion to amend. (See, e.g., Huff v. Wilkins (2006) 138 Cal.App.4th 732, 736.)

Even assuming Plaintiff has been aware of the facts supporting the new allegations for approximately one year since trial of the Underlying Action in August of 2018, the complaint in this action was not filed until April 2, 2019. The relevant date upon which to measure whether Plaintiff has unreasonably delayed in seeking leave to amend is the date this action was filed, not the date of the trial in the Underlying Action or the

date the reporter’s transcript was prepared in the Underlying Action (January 2019). Since the time this action was filed (April of 2019), Plaintiff only waited approximately fourth months before seeking leave to amend. As noted by Plaintiff, this case is in its infancy, trial has not yet been set, and discovery (if any) has just begun. Moreover, Defendants have not set forth any argument as to how they would be unduly prejudiced if amendment was permitted. Defendants’ argument that Plaintiff’s delay is unwarranted is rejected.

Defendants also argue the motion should be denied because the first and third causes of action of the proposed amended complaint fail to state facts sufficient to constitute a cause of action. This argument goes to the validity of the proposed amendments, which 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.) Such challenges to the pleadings are more properly addressed in a demurrer or a motion to strike rather than in an opposition to a motion to amend. It is axiomatic that “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.” (California Casualty Gen. Ins. Co., supra, 173 Cal.App.3d at 281.) Defendants are free to challenge the amended pleading by way of appropriate motion.

Pursuant to the policy of great liberality in permitting amendments, the Court finds the amendments are in furtherance of justice and Defendants will not be prejudiced by the filing of the FAC. Plaintiffs’ motion is GRANTED.

Plaintiff to file and serve the FAC no later than October 14, 2019. Although not required by Court rule or statute, Plaintiff is directed to present a copy of this order when the FAC is presented for filing.

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