Case Number: BC498691 Hearing Date: July 20, 2016 Dept: 20

TENTATIVE RULING
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TENTATIVE RULING AND ORDER
JUDGE DALILA C. LYONS
DEPARTMENT 20
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Hearing Date: Wednesday, July 20, 2016
Case Name: Aghaian et al. v. Minassian
Case No.: BC498691
Motion: Leave to File a Cross-Complaint
Moving Party: Defendant Shahen Minassian
Responding Party: Plaintiffs Seda Galstian Aghaian, Andranik Galstian, and Aida Galstian Norhadian, individually and as Trustees of The Galstian Trust U/A/D October 26, 1982, as amended and restated July 01, 2005
Notice: OK
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RULING: Defendant Shahen Minassian’s motion for leave to file a cross-complaint is GRANTED.

ORDER: The Court orders as follows:

1. The demurrer to the cross-complaint will be heard on July 28, 2016 at 9:30 a.m. No further briefing is permitted since it has been fully briefed. Defendant shall revise its proposed FACC and delete any reference to Gaska, Inc. and file the FACC within 10 days of this ruling. No other revisions shall be made to the FACC.
2. Trial is continued from November 3, 2016 to December 1, 2016 at 8:30 a.m. to accommodate any additional discovery or motions.
3. Final Status Conference is continued to November 17, 2016, 8:30 a.m.
4. Status Conference re Settlement is continued to November 7, 2016, 8:30 a.m.
5. The parties shall meet and confer and develop a joint discovery/motion plan and plaintiff must file the plan in Court by August 12, 2016 with a courtesy copy directly in Department 20. The discovery plan should include any future motions and dates by which each task it to be completed. If any motions are planned the moving party must reserve a hearing date as soon as possible. If further discovery motions are contemplated, given the significant amount of discovery disputes, the Court plans to appoint a discovery referee and the parties will pay equally the referee’s fees.
6. The parties shall cooperate in an attempt to efficiently and quickly exchange and complete all discovery so that this case is ready for trial. Such cooperation may include agreement to informally exchange discovery, shorten time to hear motions, etc.
7. The parties must comply with the previous Court order to participate in a Mandatory Settlement Conference (MSC) through Department 18, or if the parties prefer, a private mediation. Either the mediation or MSC must be completed by November 7, 2016, the date of the Status Conference regarding Settlement. If the case settles, a Notice of Settlement must be filed promptly.
8. If the case does not settle, the parties are reminded to comply with the Court’s Guidelines of FSC and Trials, available on the Court’s website under “Court Information” for Department 20.
9. Failure to comply will subject the parties and attorneys to sanctions.

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BACKGROUND

On June 20, 2016 the Court struck the First Amended Cross-Complaint (“FACC”) filed by Minassian as Minassian improperly filed without obtaining leave of the Court a Cross-Complaint on February 01, 2016 and the FACC on March 30, 2016 as Minassian filed a cross-complaint against a new party Gaska, Inc. after the trial date had been set.

Defendant moves for leave to file a proposed “First Amended Cross-Complaint” and claims in the proposed cross-complaint arises out of the same transactions and occurrences as Plaintiffs’ operative complaint. Defendant states that as the Court did not deem the pending demurrer of Plaintiffs to the FACC as moot or grant Defendant leave to amend the FACC, the proposed FACC is identical to the one the Court struck on June 20, 2016. Defendant further states it no longer seeks to add Gaska, Inc. as a party to the FACC, regards Gaska, Inc. as a dismissed party from the cross-action even if leave is granted, and only seeks to assert the FACC against Plaintiffs. Defendant states that it filed its cross-complaint at the same time as its answer to the SAC, its first answer filed in the action, and Gaska, Inc. was added in error and misjudgment which has been cured by the voluntary dismissal of Gaska, Inc. Defendant argues that had it not added Gaska, Inc. as a party it would have been permitted to file the cross-complaint without obtaining leave of the Court and that such error should not bar Defendant from now filing the FACC. Defendant argues the FACC is to obtain recovery against Plaintiffs and as Plaintiffs allege Defendant mishandled transactions concerning property in Iran, the FACC asserts Plaintiffs interfered with that process and have caused damage to Defendant in Iran because Plaintiffs’ actions have caused re-expropriation of properties by the Iranian government and prevented sales of properties from going through. Defendant states that when the properties cannot be redeemed or sold he loses out on the income he would receive from those sales and is therefore damaged in the same transactions as alleged by Plaintiffs. Defendant’s reply alleges that Plaintiffs cannot make a strong showing of bad faith and that the only prejudice is that that the current trial dated does not allow a challenge on the pleadings and a summary judgment motion on statutory notice.

Plaintiff argues that the action has been pending since January 07, 2013 and Defendant has continually sought to delay resolution of the matter and this is another example of bad faith and gamesmanship. Plaintiffs argue that in the past Defendant has agreed to stipulate to the filing of the Second Amended Complaint or to not amend the filed cross-complaint, only to go back on his word and cause unnecessary motions and hearings Defendant did not prevail upon. And Plaintiffs argue that as trial is less than four months away, a continuance is necessary to permit Plaintiffs to exercise their right to seek summary judgment if the Court does permit Defendant to file the FACC. Plaintiffs further seek to have their demurrer to the FACC heard as soon as possible as it has been fully briefed if the court grants Defendant’s motion.

ANALYSIS

I. Filing of Cross-Complaint

CCP § 428.50 provides for the filing of cross-complaints and when leave of the court is required for such filing:

(a) A party shall file a cross-complaint against any of the parties who filed the complaint or cross-complaint against him or her before or at the same time as the answer to the complaint or cross-complaint.
(b) Any other cross-complaint may be filed at any time before the court has set a date for trial.
(c) A party shall obtain leave of court to file any cross-complaint except one filed within the time specified in subdivision (a) or (b). Leave may be granted in the interest of justice at any time during the course of the action.
CCP § 428.50.

Cross-claims against complainants arising from the same transaction or series thereof, existing at the time of filing an answer, are compulsory. See, e.g., CCP §426.30(a); Al Holding Co. v. O’Brien & Hicks, Inc. (1999) 75 Cal.App.4th 1310, 1313-14; Weil & Brown, Civ. Pro. Before Trial (The Rutter Group 2011) ¶¶ 6:516, 6:511 and 6:581.

Leave to file compulsory cross-complaints must be granted where moving parties acted in good faith. CCP § 426.50; Silver Organizations, Ltd. v. Frank (1990) 217 Cal.App.3d 94, 98-99; Weil & Brown, Civ. Pro. Before Trial (The Rutter Group 2011) ¶¶6:518-19 (noting split of authority as to whether there is a modicum of discretion), and 6:562. “[W]hat constitutes “good faith”-or lack of it-under Code of Civil Procedure Section 426.50 must be determined in light of and in conformity with the liberality conferred upon the trial courts by the section and by prior law. … [T]his principle of liberality requires that a strong showing of bad faith be made in order to support a denial of the right to file a cross-complaint under this section.” Foot’s Transfer & Storage Co. v. Superior Court (1980) 114 Cal.App.3d 897, 902. A determination that the petitioner acted in bad faith may be premised on “substantial injustice or prejudice” to the opposing party. Id. at 903. See also Gherman v. Colburn (1977) 72 Cal.App.3d 544, 558-59 (stating that leave was properly denied when the defendant’s motion “was merely a tactical strategic maneuver to deprive plaintiffs of a right to a jury trial”).

Here, while Plaintiff cites instances in which Defendant may have delayed the action, Defendant did not commit any improper conduct such that there has been a strong showing of bad faith. Foot’s Transfer & Storage Co. 114 Cal.App.3d at 902. Further, any prejudice to Plaintiffs can be cured by setting the demurrer as soon as possible and continuing the trial. The Court will place the demurrer to the FACC on calendar for July 28, 2016 and continue the trial to December 1, 2016. The Court notes that any references to claims against Gaska, Inc. in the FACC will be disregarded as Defendant has dismissed Gaska, Inc. and states Gaska, Inc. was only included as a party due to error and misjudgment. Defendant shall revise its proposed FACC and delete any reference to Gaska, Inc. and file the FACC within 10 days of this ruling. No other revisions shall be made to the FACC.

Accordingly, Defendant’s motion for leave to file the cross-complaint is GRANTED.