Motion for leave to file cross-complaint
Case No.: 25CV479632
Generally, a party must file a cross-complaint against any of the parties who filed the complaint against him before or at the same as the answer to the complaint. (See Code Civ. Proc. § 428.50, subd. (a).) The Court may grant leave to file a cross-complaint any time after that if the failure to plead a cause of action was the result of oversight, inadvertence, mistake, neglect or other cause. (See Code Civ. Proc. §§ 426.50, 428.50, subd. (c).) Leave to file the cross-complaint is mandatory if the party who failed to plead the cause of action acted in good faith, and is liberally construed to avoid forfeiture of causes of action. (See Code Civ.
Proc. § 426.50; see also Sidney v. Super. Ct. (Kinoshita) (1988) 198 Cal.App.3d 710, 718 (stating that “what constitutes ‘good faith’ must be determined in conformity with the liberality conferred upon the trial courts by the section [426.50] and by prior law”); see also Silver Orgs. v. Frank (1990) 217 Cal.App.3d 94, 99 (stating that “[a] motion to file a cross-complaint at any time during the course of the action must be granted unless bad faith of the moving party is demonstrated where forfeiture would otherwise result”).) “[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 crosscomplaint under this section.” (Foot’s Transfer & Storage Co. v.
Super. Ct. (Worth) (1980) 114 Cal.App.3d 897, 902; see also Silver Orgs. v. Frank (1990) 217 Cal.App.3d 94, 99 (stating that “substantial evidence must support the trial court's decision... ‘substantial evidence’... is evidence... of ponderable legal significance,... reasonable in nature, credible, and of solid value”) (italics original).) “‘Bad faith’ is defined as ‘[t]he opposite of ‘good faith,’ generally implying or involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake..., but by some interested or sinister motive[,]... not simply bad judgment or negligence,
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but rather... the conscious doing of a wrong because of dishonest purpose or moral obliquity;... it contemplates a state of mind affirmatively operating with furtive design or ill will.” (Silver Orgs., supra, 217 Cal.App.3d at p.100.) A showing of bad faith cannot be based on neglect, mistake, inadvertence or oversight. (Id. at p.101.)
Here, plaintiff and cross-defendant Melissa Rae Bentz (“Melissa”) argues that: defendant James Lee Bentz’s (“James”) counsel promised Plaintiff that she would be paid in full from the sale of James’ home, then reneged on that promise; James’ central allegation of the proposed cross-complaint (“XC”) is directly contradicted by James’ own sworn filings; the proposed cross-claims are time-barred; the timing of the XC reveals its tactical purpose; James’ reneged promise, James’ counsel’s submission of false declarations, and the scheduling of the motion during Plaintiff’s counsel’s noticed unavailability confirm bad faith; the proposed XC fails to state a cause of action; and, granting leave would substantially prejudice Melissa. In support of her opposition, Melissa presents the declarations of herself and her counsel, Kimberly Whitfield.
Melissa argues that if the motion for leave to file the XC was granted, she would be substantially prejudiced because she would have to answer to the XC’s causes of action for fraud and breach of fiduciary duty, conduct additional discovery, litigate James’ role at Bentz Direct, and incur attorney’s fees. (See Opposition, p.14:3-10.) However, participation in litigation does not by itself demonstrate prejudice. Moreover, Melissa’s evidence in opposition does not support any bases for her argument.
As to Melissa’s argument that the XC fails to state facts sufficient to constitute a cause of action, even if correct, this does not necessarily mean that the cause of action is futile. This does not foreclose Melissa from filing a demurrer to the XC. As to Melissa’s remaining arguments, her evidence does not demonstrate that James acted in bad faith in failing to file the XC at the time of James’ filing of his answer.
Accordingly, James’ motion for leave to file the XC is GRANTED. James shall file his proposed XC within 10 days of this Order.
Additionally, James shall prepare and submit a proposed final order consistent with this tentative ruling.
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