GARY CONRAD OTTO VS KASSABIAN DEVELOPMENTS, INC., ET AL

Tentative Rulings

Case Number: ****9585    Hearing Date: November 03, 2020    Dept: M

Case Name: Gary Conrad Otto v. Kassabian Developments, Inc., et al.

Case No.: ****9585

Motion: Leave to File Third Amended Complaint (unopposed)

Hearing Date: 11/3/2020

Background

On September 29, 2020, Plaintiffs Gary Conrad Otto and Hanna Lee Otto, Trustees of The Otto Family Inter Vivos Trust, Dated October 24, 2002 (“Plaintiffs”), filed a motion for leave to file a third amended complaint (TAC). Plaintiffs included the proposed TAC as a stand alone filed document.

On July 23, 2018, Plaintiffs filed a complaint for breach of contract, breach of express warranties, breach of implied warranties and negligence related to construction defects at 32 Sixth Street, Manhattan Beach, California 90266. The complaint named the builder/developer/general Gerard V. Kassabian, (“Gerard”) and Dikran V. Kassabian, (“Dikran”), Kassabian Developments, Inc. (“Kassabian”) and Luxury Builders, LLC (“Luxury Builders”). The first amend complaint filed on August 2, 2018 also named these defendants.

Plaintiffs explain that on March 20, 2019, they filed a second amended complaint. Pursuant to an agreement between Plaintiffs’ counsel and former counsel for Gerard, Dikran, Kassabian, and Luxury Builders, Plaintiffs did not name Gerard and Dikran in the second amended complaint. However, pursuant to that agreement, the parties agreed that Plaintiffs could rename and re-serve Gerard and Dikran at a later date if the facts of case warranted such an action. (See Kent Decl. ¶ 5., Ex. A.). Plaintiffs argue that such facts have been discovered.

On October 5, 2020, Plaintiffs filed a request for dismissal of Ollin International, Inc. with prejudice. Plaintiffs seek to re-name (re-add) Defendants Gerard V. Kassabian, (“Gerard”) and Dikran V. Kassabian, (“Dikran”) and add allegations of alter ego against them as the managing agents of Defendants Kassabian Developments, Inc. (“Kassabian”) and Luxury Builders, LLC (“Luxury Builders”).

Legal Standard

“The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect.” (Code Civ. Proc., ; 473.) California Code of Civil Procedure section 576 also grants the court power to allow a party to amend its pleading.

California courts are required to permit liberal amendment of pleadings in the interest of justice between the parties to an action. (Dieckmann v. Superior Court (1985) 175 Cal.App.3d 345, 352.) Generally, amendment must be permitted unless there is unwarranted delay in requesting leave to amend or undue prejudice to the opposing party. (Duchrow v. Forrest (2013) 215 Cal.App.4th 1359, 1377.) Even if a good amendment is proposed in proper form, unwarranted delay in presenting it may – of itself—be a valid reason for denial. (Emerald Bay Community Association v. Golden Eagle Ins. Corp. (2005) 130 Cal.App.4th 1078, 1097.)

Analysis

As noted above, Plaintiffs seek to re-name Defendants Gerard and Dikran as well as to add alter ego allegations. Plaintiffs explain that they initially agreed to dismiss these defendants because Luxury Builders and Kassabian had told Plaintiffs that they had sufficient insurance to cover Gerard and Dikran. However, Plaintiffs argue that after discovery there is a substantial likelihood that the insurance would not cover Gerard and Dikran.

Plaintiffs also argue that discovery that was stayed. Plaintiffs point to a case management order in support of this argument. The case management order of August 2019 does not state that a stay was ever imposed or lifted on June 26, 2020. The revised CMO listed June 22, 2020 as the trial date and May 22, 2020 as the discovery cutoff. (See 09/04/2019 Notice of entry of order re: revised CMO timeline.) Plaintiffs argue that Defendants would not be prejudiced because they could conduct discovery on the issues raised by the TAC. However, it appears that the discovery cutoff has passed.

While the motion is unopposed, the Court is concerned that Plaintiff’s have not demonstrated a lack of prejudice due to discovery being closed. Therefore, the motion to file a TAC is tentatively denied.