Case Number: BC500829 Hearing Date: June 09, 2014 Dept: 34

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

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

The Motion for Leave to Amend is GRANTED.

The Court may take judicial notice of the items requested by plaintiff, but it is not necessary since they are part of the record in this action. (See Evid. Code, § 452(d), (h).) The Court may take judicial notice of plaintiff’s discovery responses only to the extent that they are inconsistent with the allegations in the pleading. (See Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604-605.)

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”). (Chan Decl., Exh. 1.) In the motion, plaintiff discusses the changes to be made in the SAC. (See Memo., pp. 2-4.)

Plaintiff provides a declaration. The declaration describes the amendment’s effect. (See Chan Decl., ¶¶ 27-33.) The declaration states that the facts were discovered during depositions in February and April 2014. (See Chan Decl., ¶¶ 13-15, 18-22, Exhs. B, D, G.) This declaration sufficiently complies with rule 3.1324.

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.)

Plaintiff argues that the parties likely will not be prejudiced because the new claims were already asserted as affirmative defenses in plaintiff’s answer to defendant’s cross-complaint and defendant has already moved for summary judgment on all affirmative defenses in this answer. (See Chan Decl., ¶¶ 3-11.) Defendant argues that it will be prejudiced if leave to amend is granted. Defendant fails to sufficiently support this argument. Instead, defense counsel makes a conclusory assertion that defendant “will be required to undergo another expensive round of discovery” and that “a trial continuance will be inevitable.” (Chang Decl., ¶ 17.) Defense counsel’s declaration provides no specifics as to what other discovery will be necessary or why a trial continuance will be inevitable. Though the opposition asserts that defendant is entitled to take the depositions of certain witnesses, the declaration is silent as to this assertion and there is no indication that such depositions will be necessary. (See Opp., p. 11.) Further, the Court notes that although defendant may be entitled to take various depositions does not necessarily mean that such depositions are needed or will be taken. Therefore, defendant has not established that it will be prejudiced if leave to amend is granted.

Plaintiff’s motion for leave to amend is GRANTED.