Case Number: BC500829 Hearing Date: May 19, 2014 Dept: 34

Moving Party: Plaintiff USC Care Medical Group Inc. (“plaintiff”)

Resp. Party: Defendant Siemens Healthcare Diagnostics Inc. (“defendant”)

Plaintiff’s motion for leave to file a second amended complaint is DENIED, without prejudice to plaintiff re-submitting the motion in compliance with rule 3.1324.

BACKGROUND:

Plaintiff commenced this action on February 8, 2013, seeking declaratory relief as to the interpretations of certain contracts between plaintiff and defendants regarding medical diagnostic equipment leased by defendants’ predecessor. Plaintiff filed a first amended complaint on March 17, 2014, which also seeks declaratory relief.

On February 25, 2013, defendant and cross-complainant Siemens Healthcare Diagnostics, Inc., filed a cross-complaint asserting three causes of action for breach of contract, three causes of action for breach of the implied covenant of good faith and fair dealing, and a cause of action for unjust enrichment. Defendant filed a first amended cross-complaint on March 17, 2014.

ANALYSIS:

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.

Plaintiff provides a proposed second amended complaint (“SAC”). Plaintiff fails to indicate, either by specifically describing the amendments or providing a red-lined copy of the proposed SAC, what allegations are to be deleted or added.

Plaintiff provides a declaration, but it fails to comply with the requirements of rule 3.1324. The declaration does not describe the amendment’s effect, fails to state why the amendment is necessary and proper, gives no indication of when the facts giving rise to the amendment were discovered, and does not explain why the request to amend was not made sooner. (The Court notes that some of these things are discussed in USC’s Memorandum of Points and Authorities, but they are not addressed in the Declaration.)

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 defendant attacks the validity of the proposed amended pleadings, this argument is not well taken. The Court is “bound to apply a policy of great liberality in permitting amendments to the complaint ‘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.) If the allegations in the proposed SAC are insufficient or without merit, defendant may challenge them with a demurrer or motion for summary judgment. (See Atkinson v. Elk Corp. (2006) 109 Cal.App.4th 739, 760 [”the better course of action would have been to allow . . . [plaintiffs] to amend the complaint and then let the parties test its legal sufficiency in other appropriate proceedings.”].)

A court can deny leave to amend after long, inexcusable delay, where there is cognizable prejudice, such as discovery needed, trial delay, critical evidence lost, or added preparation expense. (Solit v. Tokai Bank (1999) 68 Cal.App.4th 1435, 1448; Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761; Green v. Rancho Santa Margarita Mortgage Co. (1994) 28 Cal.App.4th 686, 692; Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 487.) Some courts have found that unreasonable delay in making a motion to amend a complaint alone is sufficient grounds to exercise court discretion to deny leave to amend, even absent any prejudice. (See Emerald Bay Community Assn. v. Golden Eagle Ins. Corp. (2005) 130 Cal.App.4th 1078, 1097; Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 613; Roemer v. Retail Credit Co. (1975) 44 Cal.App.3d 926, 939-940.)

Because plaintiff fails to provide a declaration in compliance with rule 3.1324, it cannot be determined if plaintiff unreasonably delayed in bringing the instant motion.

Accordingly, plaintiff’s request for leave to file a second amended complaint is DENIED, without prejudice to plaintiff re-submitting the motion in compliance with rule 3.1324.

Nonetheless, the Court will indicate that should plaintiff decide to resubmit its motion, the Court is concerned that the granting of any such motion would delay the resolution of this matter. Each party has a Motion for Summary Judgment that is scheduled for hearing on July 18, 2014. Trial is currently set for August 20, 2014. Based on discussion with counsel at last week’s hearing on May 12, 2014, it appears that if the Court were to grant leave to file a SAC, the Motions for Summary Judgment would have to be postponed. If the Court were to grant leave to file a SAC, and then Siemens were to demur, we would probably have to continue the trial at least six months. While these concerns would not necessarily lead the court to deny such a motion, the court must consider these issues in ruling on such a motion.