Global Liquidity Services, LLC vs. Xport Forwarding LLC

As to the merits, Defendants failed to show sanctions under section 128.5 or section 128.7 are warranted in this instance. The record before the court shows the October 20, 2022 letter was sent to Plaintiff’s former counsel, Wilshire Law Firm, PLC. (See ROA 232, Ex. B.) Knowledge of the October 20, 2022 letter could reasonably be imputed to Plaintiff. (See Civ. Code § 2332.) Plaintiff raised this argument in the Opposition, but Defendants failed to address it in the Reply. Moreover, the court (Judge Hoffer) previously determined the October 20, 2022 letter could possibly support an equitable estoppel defense. (See ROA 179.) In addition, as Plaintiff contends, the third amended complaint (TAC) could reasonably be interpreted as describing what Plaintiff’s legal team believed based on the documents the legal team received. Thus, it cannot be said the TAC’s equitable estoppel allegations are entirely without merit or were made in bad faith.

As to Defendants’ argument that the allegations in the TAC regarding Ms. McKeown’s conversation with Priscilla Ard are false, the cited deposition testimony does not establish the falsity of the allegations.

Defendants also failed to show sanctions are warranted based on their argument that Plaintiff’s lawsuit is barred under “multiple affirmative defenses.” These arguments are more appropriately raised on summary judgment motion.

Plaintiff shall give notice.

302 Global Liquidity Before the court is a Motion for Leave to File a Services, LLC Second Amended Complaint by plaintiffs Global vs. Xport Liquidity Services, LLC d/b/a VendorPayment and Forwarding Protective Supplies, LLC (collectively referred to as LLC Plaintiffs). The motion is GRANTED.

Plaintiffs move for relief pursuant to Code of Civil Procedure section 473, subdivision (a)(1). “Generally, leave to amend must be liberally granted [Citation], provided there is no statute of limitations concern, nor any prejudice to the opposing party, such as delay in trial, loss of critical evidence, or added costs of preparation.” (Solit v. Tokai Bank, Ltd. New York Branch (1999) 68 Cal. App. 4th 1435, 1448.)

Plaintiffs provided a sufficient reason for not including the allegations in the SAC in the First Amended Complaint (FAC), namely that discovery taken and responses received after the filing of the FAC, as well as the final report of the receiver, produced facts supporting the new causes of action against Intervenor Purchasing 411 d/b/a Royalty Distribution (Royalty). Although Plaintiffs had previously alleged Royalty was not a bona fide purchaser of the subject goods, Plaintiffs stated they did not have all the facts to support the present allegations until after the FAC had been filed.

As for Royalty’s claims it will be prejudiced by the amendments due to loss of evidence, there is nothing to suggest Plaintiffs encouraged Royalty to avoid participating in discovery prior to now, but rather it was the choice of Royalty not to participate normally in discovery to save costs. This is not sufficient to show prejudice to overcome the motion.

The motion is granted. Plaintiffs are directed to file and serve the SAC no later than May 20, 2026. Any responsive pleadings are to be filed per code.

Parties should appear at the hearing to discuss potentially continuing the current trial date.

Plaintiffs shall give notice.