76 Cal.App.5th 510
Cal. Ct. App.2022Background:
- Plaintiffs (Mac, Cunningham, and We Got Eaten, LLC (WGE)) financed and contracted with Los Robles Ventures, Inc. and its principal Edwin Minassian to open a restaurant/nightclub called The Mixx; plaintiffs alleged unpaid promissory notes and breach of a Master Services Agreement.
- Plaintiffs filed successive complaints; a stipulated fourth amended complaint (filed by WGE) omitted Minassian and the individual plaintiffs. The stipulation was not signed by the court, but Los Robles answered the fourth amended complaint and both sides proceeded to trial as if it were operative.
- Trial proceeded without Minassian as a named defendant; he was served as a witness/subpoenaed but did not participate as a defendant and had limited opportunity for discovery or to prepare a defense.
- After trial plaintiffs moved for leave to file a fifth amended complaint to re‑add Minassian (and Mac and Cunningham); the court denied post‑trial leave to amend because doing so would prejudice Minassian.
- Despite denying leave to amend, the trial court issued a statement of decision and judgment that referred to and relied on the fifth amended complaint and entered judgment against Minassian and Los Robles for $219,713.33.
- On appeal the Court of Appeal held the fourth amended complaint was operative at trial, that the post‑trial inclusion of Minassian violated his due process rights and was an abuse of discretion, reversed judgment as to Minassian and as to claims by Mac and Cunningham against Los Robles, and affirmed WGE’s judgment against Los Robles.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the fourth amended complaint was the operative pleading (i.e., whether Minassian was a defendant at trial) | The stipulation was never signed by the court, so the third amended complaint (which named Minassian) remained operative | The parties stipulated to the fourth amended complaint and the court’s trial conduct treated it as operative; Minassian was therefore dismissed pre‑trial | Fourth amended complaint was operative; Minassian was not a party at trial |
| Whether the trial court properly allowed (or effectively relied on) a post‑trial amendment (fifth amended complaint) to add Minassian | Leave to amend should be allowed under CCP § 473 because prior counsel’s misrepresentations misled new counsel | Adding Minassian post‑trial would prejudice his due process rights because he lacked notice, discovery, and opportunity to defend | Court abused its discretion by entering judgment based on the post‑trial amendment; reversal as to Minassian |
| Whether Los Robles is entitled to a new trial or reversal of the judgment against it | Plaintiffs (respondents) argued judgment against Los Robles is correct as to WGE; no new trial needed | Appellants argued portions of the notes bound Minassian personally so Los Robles should get a new trial | Appellants forfeited a focused argument for new trial; judgment against Los Robles as to WGE is affirmed; no new trial ordered |
| Whether judgments for Mac and Cunningham against Los Robles stand | Plaintiffs sought to add Mac and Cunningham back post‑trial | Defendants argued those plaintiffs had been dismissed and could not obtain judgment | Judgment for Mac and Cunningham reversed because they were dismissed by the operative fourth amended complaint |
Key Cases Cited
- Tung v. Chicago Title Co., 63 Cal.App.5th 734 (discretionary review of amendment rulings) (discussed standard of review for motions to amend)
- Fireman's Fund Ins. Co. v. Sparks Construction, Inc., 114 Cal.App.4th 1135 (an amended complaint omitting defendants operates as a dismissal as to them)
- Wilson v. Sunshine Meat & Liquor Co., 34 Cal.3d 554 (presumptions and intendments support judgments when the record is silent)
- Harding v. Collazo, 177 Cal.App.3d 1044 (oral or unsigned stipulations may be enforced where opposing party reasonably relied on them)
- Board of Trustees v. Superior Court, 149 Cal.App.4th 1154 (California policy favors liberal amendment to decide cases on merits absent prejudice)
- Cota v. County of Los Angeles, 105 Cal.App.3d 282 (amendments at trial can be prejudicial if defendant unprepared to meet new theory)
- Duchrow v. Forrest, 215 Cal.App.4th 1359 (post‑trial or mid‑trial amendments adding new issues/damages can prejudice defendants who lacked notice and discovery)
- Triplett v. Farmers Ins. Exchange, 24 Cal.App.4th 1415 (adding new defendants to judgment without trial requires alter‑ego/control showing to satisfy due process)
- Jameson v. Desta, 5 Cal.5th 594 (presumption that a judgment is correct; burden on appellants to show error)