Michael Casamento v. Augie Charles Schultz, et al.

Case Number: 24CHCV00580 DEFENDANTS AUGIE CHARLES SCHULTZ, JOHN CHARLES SCHULTZ, AND CYNTHIA RAY RUFF-REEVES' MOTION FOR LEAVE TO FILE CROSS-COMPLAINT Motion filed on July 20, 2026. MOVING PARTY: Defendants Augie Charles Schultz, John Charles Schultz, and Cynthia Ray Ruff-Reeves RESPONDING PARTY: None NOTICE: OK. RELIEF REQUESTED: Leave to file a cross-complaint against Chris Mendenhall, individually and dba Direct Real Estate Partners. RULING: Denied.

BACKGROUND On February 22, 2024, Plaintiff Michael Casamento (Plaintiff) filed the Complaint against Defendants Augie Charles Schultz, John Charles Schultz, and Cynthia Ray Ruff-Reeves (Defendants). Defendants answered the Complaint on September 23, 2024. On January 7, 2026, pursuant to the parties' stipulation, the Court continued trial from March 2, 2026 to November 23, 2026. The Court further ordered: "Discovery is not reopened absent court order; statutory deadlines tied to the trial date continue to operate by law."

On July 15, 2026, the Court denied Defendants' Ex Parte Application for Leave to File a Cross-Complaint or, in the alternative, for an Order Shortening Time. The denial was without prejudice to Defendants filing a regularly noticed motion for leave to file a cross-complaint pursuant to Code of Civil Procedure section 428.50, subdivision (c).

On July 20, 2026, Defendants filed the present motion, supported by the declaration of Adam M. Miller and the proposed cross-complaint. Plaintiff and Defendants submitted a joint stipulation in support of the requested leave. (Miller Decl. P.P. 6-7.)

DISCUSSION A defendant may file a cross-complaint against a person who is not already a party where the cause of action asserted "arises out of the same transaction, occurrence, or series of transactions or occurrences" alleged in the complaint or concerns the property or controversy that is the subject of the action. (Code Civ. Proc., Sec. 428.10, subd. (b).) Cross-complaints against third parties are permissive rather than compulsory. (Insurance Co. of North America v. Liberty Mutual Ins. Co. (1982) 128 Cal.App.3d 297, 303.)

A defendant seeking equitable indemnity may cross-complain against a third person where the harm for which the defendant is being sued is alleged to be attributable, at least in part, to the proposed cross-defendant. (American Motorcycle Assn. v. Superior Court (1978) 20 Cal.3d 578, 607.)

A cross-complaint against a third party may be filed without leave before the Court sets the first trial date. (Code Civ. Proc., Sec. 428.50, subd. (b).) Once a trial date has been set, leave is required even if that trial date is later vacated. (Loney v. Superior Court (1984) 160 Cal.App.3d 719, 723.) Leave may be granted "in the interest of justice at any time during the course of the action." (Code Civ. Proc., Sec. 428.50, subd. (c).)

For a permissive cross-complaint, the moving party should show that filing is in the interest of justice and provide a reasonable explanation why the cross-complaint was not filed earlier. A greater showing of the interest of justice is required where the proposed cross-complaint would add a third person not yet a party. In that circumstance, the Court considers whether the cross-complaint will unreasonably burden and complicate Plaintiff's lawsuit with cross-actions and third parties. A late motion may face an uphill battle where the delay is not satisfactorily explained, and the Court may be inclined to deny a motion that will affect the parties' ability to meet the scheduled trial date. (Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2026) P.P. 6:562, 6:565, 6:567.)

Here, the proposed cross-complaint satisfies the relationship required by Code of Civil Procedure section 428.10, subdivision (b). It arises from the same real estate transaction and alleged disclosure deficiencies at issue in Plaintiff's Complaint. Defendants allege that Chris Mendenhall, their listing broker, was responsible for disclosure coordination, transactional management, and advice concerning the sale, and that his conduct contributed to the liability alleged against Defendants. (Proposed Cross-Complaint P.P. 7-24.)

The Court nevertheless does not find that Defendants have made the greater showing required to establish that adding a new third party at this stage is in the interest of justice. The action has been pending for approximately two and a half years, and trial is set for November 23, 2026. The proposed cross-complaint would add one new cross-defendant and six causes of action concerning the underlying real estate transaction.

Defendants state that documents and information obtained through discovery disclosed Mendenhall's role in the transaction, including matters concerning the Transfer Disclosure Statement and whether the transaction qualified as a probate sale. (Miller Decl. P. 4.) The declaration, however, does not identify when that information was obtained or otherwise explain why Defendants waited until approximately three months before trial to seek leave.

More significantly, Defendants' showing does not account for the existing discovery posture. Defendants state that nonexpert discovery must be completed by October 24, 2026 and contend that Mendenhall will therefore have sufficient time to appear and participate in discovery. (Miller Decl. P. 8.) The Court's January 7, 2026 order, however, expressly provided that the continuance of trial did not reopen discovery. Accordingly, the applicable discovery cutoff remained tied to the March 2, 2026 initial trial date, absent further court order.

The Court recognizes Plaintiff supports the requested leave and that the joint stipulation states the cross-complaint will promote judicial economy and avoid multiple actions. That support does not eliminate the case-management consequences of adding a new party shortly before trial with discovery closed. Because the proposed third-party cross-complaint is permissive, Defendants are not required to assert their claims against Mendenhall in this action. (Insurance Co. of North America v. Liberty Mutual Ins. Co., supra, 128 Cal.App.3d at p. 303.)

On this record, the direct relationship of the proposed claims and Plaintiff's support for leave do not outweigh the timing of the request, the absence of a sufficient explanation for the delay, and the unresolved discovery and trial-management consequences of adding a new party at this stage. The Court therefore does not find that granting leave is in the interest of justice.

CONCLUSION The motion is denied. Case Number: 24CHCV03854 Hearing Date: August 24, 2026 Dept: F46 Dept. F-46 Hearing Date: August 24, 2026