19-CIV-00954 TERRY SCHMID VS. APTTUS CORPORATION, ET AL.

TERRY SCHMID APTTUS CORPORATION, A CORPORATION
CLIFF PALEFSKY MITCHELL F. BOOMER

PLAINTIFF TERRY SCHMID’S MOTION FOR LEAVE TO FILE A FIRST AMENDED COMPLAINT TENTATIVE RULING:

Plaintiff Terry Schmid’s Motion for Leave to File a First Amended Complaint (FAC) is GRANTED. Code Civ. Proc. §§ 473(a)(1), 576.

On a motion for leave to amend, 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.) Courts apply such a liberal policy at any stage of the proceedings, up to and including trial. (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761.) If the motion to amend is timely made and granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend and where the refusal results in a party being deprived of the right to assert a meritorious cause of action. (Morgan v. Sup. Ct. (1959) 172 Cal.App.2d 527, 530.)

Defendant Apttus Corporation contends that Plaintiff has delayed in seeking amendment, but Plaintiff has explained that the amendment is necessary because it was not until Plaintiff’s deposition on August 29, 2019, that Plaintiff understood that Defendant would argue that Plaintiff never had a contractual right to accelerate the vesting of his restricted stock options, which position necessitates this motion to amend. Thus, there was no unreasonable delay. Additionally and more importantly, Defendant shows no prejudice. While Defendant states that it will have to conduct discovery and move the trial date, it provides no facts demonstrating what discovery it believes is necessary that has not already been done or made any showing that evidence, which could have been obtained earlier, is no longer available.

Moreover, Plaintiff is not seeking to allege new facts, but rather a different theory, i.e. that the references to “stock options” in Paragraph 1(f) in Plaintiff’s December 2017 offer letter was a drafting oversight and that the parties understood and agreed that Plaintiff would be entitled to accelerated vesting of his Restricted Stock Units (“RSU”) upon a “change in control” under the agreement. (See City of Stanton v. Cox (1989) 207 Cal.App.3d 1557, 1563 [if amended pleading is based on same general set of facts that merely supports a different theory, no prejudice results]; see also Higgins v. Del Faro (1981) 123 Cal.App.3d 558, 564-565.) The original Complaint already alleges that Plaintiff is entitled to accelerated vesting of his RSUs upon a “change in control” pursuant to the offer letter.

Based upon the liberal policy of amendment and the failure of Defendant to demonstrate prejudice, it would be error for the Court to deny the motion to amend. Thus, Plaintiff’s motion to amend is GRANTED.

The First Amended Complaint attached to the moving papers is not deemed filed by virtue of the Court granting this motion. Plaintiff shall separately file and serve it no later than January 17, 2020.