MARK TATUM vs OXNARD BOOTCAMP LLC, et al.

2023CUBC009843: MARK TATUM vs OXNARD BOOTCAMP LLC, et al.

Seabridge and the DOE defendants are timely, (b) the amendments do not result in any of Plaintiff’s causes of action failing to state a cause of action, (c) the amendments are consistent with Plaintiff’s original complaint on file herein, and (d) there is no prejudice to any parties.

In opposition, Defendant contends this action is three years old, a Judicial Council form complaint was filed asserting a single cause of action for breach of contract against Defendants. Plaintiff maintained that Oxnard breached the terms of a February 18, 2022, Convertible Promissory Note that was payable on demand by Oxnard to Plaintiff within three years of the date of the Note. Plaintiff further contended that John Franco was liable for Oxnard's obligation on the Note as its alter ego.

Less than two months prior to the scheduled trial date, this case was stayed on November 17, 2025, pending Defendants' bankruptcy proceedings. Plaintiff was well aware of the stay, having noted it in the notice of motion. Plaintiff filed this procedurally defective motion for leave to file a First Amended Complaint ("FAC") without filing a Notice of Termination of the Stay. Fortunately, the bankruptcy proceedings have since concluded and Defendants' counsel is filing a Notice of Termination of the Stay with this opposition.

Plaintiff now seeks leave to add a new entity defendant, Seabridge Bootcamp LLC ("Seabridge"), to add causes of action for breach of contract and fraudulent transfers against Seabridge, and no longer seeks any relief against either Oxnard or Franco. Plaintiff has not sought to dismiss either Defendant, but purports to retain them in an action without any charging allegations. The proposed FAC specifically states that Plaintiff "does not seek relief against [Oxnard/Franco] directly." Keeping Defendants in this action without seeking relief against them is completely improper. As to Franco in particular, continuation of this litigation against him following his bankruptcy discharge violates 11 U.S.C. § 524(a).

Moreover, the motion fails to comply with Rule 3.1324 and does not explain why Plaintiff waited approximately 18 months after the Seabridge transaction underlying the proposed claims to seek leave to amend.

The motion is procedurally defective, the relief sought is prejudicial to Defendants, and the motion should be denied.

In reply, plaintiff argues that it is apparent from the Opposition that Plaintiff has discovered the fraud that Defendants are trying to pull on him and they do not like that they have been caught. After borrowing $150,000 from Plaintiff and refusing to pay it back, Defendants obviously came up with a scheme – form a new, separate entity, transfer the assets that served as collateral for Plaintiff’s loan to the new entity without notifying Plaintiff, have the new entity operate Oxnard’s prior business using the same assets and principals, and then hide behind bankruptcy filings. Now they have been caught, Defendants have made a series of misleading arguments to the Court as to why the Motion should be denied. None of the arguments contained in the Opposition warrant denial of the Motion.

2023CUBC009843: MARK TATUM vs OXNARD BOOTCAMP LLC, et al.

“The court may, in furtherance of justice, and on such terms as may be proper, allow a party to amend any pleading ” (Code Civ. Pro., § 473, subd. (a)(1).) Further, “[a]ny judge, at any time before or after commencement of trial, in the furtherance of justice, and upon such terms as may be proper, may allow the amendment of any pleading or pretrial conference order.” (Code Civ. Proc., § 576.)

Judicial policy favors resolution of all disputed matters between the parties in the same lawsuit. Thus, the court's discretion will usually be exercised liberally to permit amendment of the pleadings. (See Nestle v. Santa Monica (1972) 6 Cal.3d 920, 939; see also Mabie v. Hyatt (1998) 61 Cal.App.4th 581, 596 [“If discovery and investigation develop factual grounds justifying a timely amendment to a pleading, leave to amend must be liberally granted.”].) The policy favoring amendment is so strong that it is a rare case in which denial of leave to amend can be 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; see also Mabie v. Hyatt, supra, 61 Cal.App.4th at p. 596.)

Courts are 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. (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761, 135.) If the plaintiff is the party seeking leave to amend (knowing the trial will be delayed), proximity to the trial date is not grounds for denial. As long as no prejudice to the defendant is shown, the liberal policy regarding amendment prevails and it is an abuse of discretion to refuse the amendment. (Mesler v. Bragg Mgmt. Co. (1985) 39 Cal.3d 290, 297 [no surprise to defendant because parties had conducted discovery on the issues sought to be raised by amendment].)

Plaintiff is requesting leave of Court to file a proposed first amended complaint. A copy of the proposed first amended complaint is attached as Exhibit 1 to the moving declaration of James B. Devine. (Devine Decl., ¶ 5.)

1. Procedural requirements

First, the Court may find that this Motion is sufficiently detailed to comply with all the necessary procedural requirements.

A motion to amend a pleading before trial must include a copy of the proposed amendment or amended pleading, which must be serially numbered to differentiate it from previous pleadings or amendments (Cal Rules of Ct., rule 3.1324(a)(1)); state the allegations in the previous pleading that are proposed for deletion, if any, and where, by page, paragraph, and line number, the deleted allegations are located (Cal Rules of Ct., rule 3.1324(a)(2)); and state the allegations that are proposed to be added, if any, and where, by page, paragraph, and line number, the additional allegations are located. (Cal Rules of Ct., rule 3.1324(a)(3).)

A separate declaration specifying the following must accompany the motion stating all of the following: the effect of the amendment; why the amendment is necessary and proper; when the

2023CUBC009843: MARK TATUM vs OXNARD BOOTCAMP LLC, et al.

facts giving rise to the amended allegations were discovered; and the reasons why the request for amendment was not made earlier. (Cal Rules of Ct., rule 3.1324(b).)

Here, while a red-line version of the proposed first amended complaint has not been included with the moving papers, the facts are that the Memorandum of Points and Authorities and counsel’s declaration describes the substantive proposed changes to the pleadings. Accordingly, the requirements of rule 3.1324(a) all appear to have been substantively met.

Further, in substantial compliance with the requirements of rule 3.1324(b), Plaintiff’s counsel has submitted a supporting declaration wherein he explains in more or less general terms the effect of the proposed amendments and why the amendments are necessary and proper. (Devine Decl., ¶¶ 6-9.) Thus, the motion is properly considered.

2. Merits of proposed amendments

Next, the Court should look at the merits of the proposed amendments.

A court may be permitted to exercise its discretion in denying a motion for leave to amend if it appears that the proposed amendments absolutely do not have any merit. (See Robinson & Wilson, Inc. v. Stone (1973) 35 Cal.App.3d 396, 413 [“The right to amend a pleading should be denied if it appears to a certainty that no relief could possibly be granted under the amended pleading.”], emphasis added.)

Here, Plaintiff submits that the purposes of the proposed amendment is “to include (a) Seabridge and DOE defendants as the proper defendants on Plaintiff’s previous breach of contract cause of action for failure to repay a loan Plaintiff made to Oxnard as against Oxnard and Franco (as Oxnard’s alter ego) as Oxnard’s successor in interest, (b) an additional cause of action for breach of contract against Seabridge and DOE defendants regarding Oxnard’s written agreement to pledge all of its assets as collateral to secure repayment of Plaintiff’s loan, (c) two (2) additional causes of action against Seabridge and DOE defendants for avoidance of an intentionally fraudulent transfer and avoidance of a constructively fraudulent transfer regarding Oxnard’s transfer of its all of its assets to Seabridge and the DOE defendants, and (d) a cause of action against Seabridge and the DOE defendants for declaratory relief as to whether Seabridge and the DOE defendants are Oxnard’s successors in interest and are liable to Plaintiff for Oxnard’s obligations.”

It should be noted that it does not appear that Defendants do not contest the merits of the proposed amendment, only that none of the claims are alleged against them.

Plaintiff’s arguments are compelling. As to Defendant’s position, it appears that they can bring a demurrer to the FAC if necessary and they have no standing to argue that Plaintiff should file a new action. Ultimately, leave to amend is appropriate and justified.

3. Delay

Next, the Court should look at the issue of delay.

2023CUBC009843: MARK TATUM vs OXNARD BOOTCAMP LLC, et al.

An unwarranted delay in presenting the amendment may, by itself, be a valid reason for denial. (Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 613 [it “is well settled that a long deferred presentation of the proposed amendment without a showing of excuse for the delay is itself a significant factor to uphold the trial court’s denial of the amendment”]; see Miles v City of Los Angeles (2020) 56 Cal.App.5th 728, 739 [affirming denial of leave to amend on grounds of delay where plaintiffs waited 4.5 years into the litigation to assert a new federal claim]; Emerald Bay Community Assn. v Golden Eagle Ins.

Corp. (2005) 130 Cal.App.4th 1078, 1097-1098 [affirming denial of post-trial request for leave to amend on grounds of delay where plaintiff waited three months before filing motion to amend after trial court originally suggested plaintiff amend complaint during trial]; Singh v Southland Stone, USA, Inc. (2010) 186 Cal.App.4th 338, 354-355 [trial court properly denied plaintiff leave to amend during trial when the proposed amendment would have introduced issues distinct from the other issues at trial and the defendants would be prejudiced by this belated amendment].)1

Here, as noted by Plaintiff “given that Oxnard disclosed the transfer of its assets to its bankruptcy trustee by virtue of filing the “Purchase/Sale Agreement & Promissory Note” as a document in Oxnard’s bankruptcy case, Plaintiff had every right to wait to see if the bankruptcy trustee would exercise its avoidance powers under 11 U.S.C. § 548 and/or California Civil Code § 3439, et seq. to undo the transfer. That the bankruptcy trustee chose not to do so before he requested to be discharged from his trustee duties on January 12, 2026 (see Notice, Ex. 2, p. 1) does not mean that Plaintiff unnecessarily delayed filing the Motion.

Rather, the Motion was filed less than three (3) months after Oxnard’s bankruptcy trustee requested to be discharged and approximately five (5) months after Plaintiff learned of the asset transfer. Given that the statute of limitations on the avoidance of such a transfer is four (4) years (Civ. Code, § 3439.09), a five (5) month delay between notice of the transfer and seeking leave to pursue such a claim is de minimis in comparison.”

Accordingly, in light of the foregoing, it cannot reasonably be said that Plaintiff’s delay in moving for leave to amend was unduly dilatory.

4. Prejudice

Prejudice exists where the amendment would require delaying the trial, resulting in loss of critical evidence or added costs of preparation, increased burden of discovery, etc. (See Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 486-488; see also P & D Consultants, Inc. v. City of Carlsbad (2010) 190 Cal.App.4th 1332, 1345.) However, the fact that the amendment involves a change in legal theory which would make admissible evidence damaging to the opposing party is not the kind of “prejudice” the court will consider. (Hirsa, supra, Cal.App.3d 486, 490.)

A “long unexcused delay,” as well as the interjection of a new issue requiring further discovery are valid reasons for denying leave to amend. (Green, supra, 28 Cal.App.4th at p. 692; Rainer v. Community Memorial Hosp. (1971) 18 Cal.App.3d 240, 258.) “If new facts are being alleged, prejudice may easily result because of the inability of the other party to investigate the

1 It should be noted that there is a line of case law holding that delay on its own is insufficient to deny leave to

amend unless the delay was prejudicial to the defendants. (Higgins v. Del Faro (1981) 123 Cal.App.3d 558, 564-565; Berman v. Bromberg (1997) 56 Cal.App.4th 936, 945.)

2023CUBC009843: MARK TATUM vs OXNARD BOOTCAMP LLC, et al.

validity of the factual allegations while engaged in trial or to call rebuttal witnesses. If the same set of facts supports merely a different theory—for example, an easement as opposed to a fee—no prejudice can result.” (City of Stanton v. Cox (1989) 207 Cal.App.3d 1557, 1563.)

Here, it does not appear that granting leave to amend will delay the trial or significantly increase the burden of discovery. No trial date has been set. Further, Plaintiff has agreed that once this motion is granted, Defendants will be dismissed.

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