United States District Court, C.D. California
Attorneys Present for Plaintiffs: Lisa Yang.
Attorneys Present for Defendants: Thomas Lombardi Andrew
Hunter.
MOTION FOR LEAVE TO FILE THIRD PARTY
COMPLAINT
THE
HONORABLE CHRISTINA A. SNYDER JUDGE
I.
INTRODUCTION & BACKGROUND
Plaintiff
initiated this action on August 8, 2014. Dkt. 1. On July 17,
2015, plaintiff filed the operative First Amended Complaint
in this action against defendants Federal Street L.A., LLC
(“FSLA”); Federal Street Corporation; Michael C.
Winter (“Winter”); Judi Fishman
(“Fishman”); JMCP Corp.; The View Wilshire, LLC;
Tivoli Square Apartments, L.P.; Tivoli Capital, Inc.; Milan
Properties, LLC; JMCP, LCC; JMCP Manager, LLC; and Does 1
through 50 (collectively, “defendants”). Dkt. 58.
In the FAC, plaintiff asserts claims for: (1) breach of
contract; (2) fraud––intentional
misrepresentation; (3) fraud––false promise; (4)
actual fraudulent transfer; (5) constructive fraudulent
transfer; (6) constructive fraudulent
transfer––insolvency; (7) violation of Cal. Bus.
& Prof. Code § 17200 (“the UCL”); and
(8) rescission and restitution. Id.
In
brief, plaintiff alleges that she entered into a Purchase and
Sale Agreement (“the PSA”) with defendant FSLA,
under which FSLA agreed to sell her twenty-eight condominium
units in a building owned by FSLA. Plaintiff further alleges
that, after FSLA failed to timely deliver these units,
defendants Winter and Fishman falsely promised her that, so
long as plaintiff did not rescind the PSA, FSLA would deliver
her condominium units by December 31, 2011. This promise was
memorialized in an agreement referred to as the “Second
Addendum.” Plaintiff contends that she honored the
Second Addendum and did not rescind the PSA, but that FSLA
and the other defendants never delivered her condominium
units-nor had any intention of delivering her condominium
units when they agreed to the Second Addendum. Plaintiff now
asserts claims for, among other things, fraud and breach of
contract against defendants FSLA, Winter, and Fishman.
In the
instant motion, defendants Winter and Fishman seek leave to
file a third party complaint against plaintiff’s
lawyers and agents who represented her in her transactions
with FSLA and the other defendants. Dkt. 125. The Third Party
Complaint contends that these lawyers and agents (“the
Third Party defendants”) deceived plaintiff and made
false representations to Winter and Fishman in connection
with the Second Addendum. As such, the Third Party Complaint
seeks to hold the Third Party defendants partially or wholly
liable for plaintiff’s fraud claims against Winter and
Fishman. On June 20, 2016, plaintiff filed an opposition to
this motion, Dkt. 126, and on June 27, 2016, Winter and
Fishman filed a reply, Dkt. 127. Having carefully considered
the parties’ arguments, the Court finds and concludes
as follows.
II.
LEGAL STANDARD
Federal
Rule of Civil Procedure 14 provides that “[a] defending
party may, as third-party plaintiff, serve a summons and
complaint on a nonparty who is or may be liable to it for all
or part of the claim against it.” Fed.R.Civ.P.
14(a)(1). “The decision whether to implead a third
party defendant is within the sound discretion of the
district court.” Southwest Administrators, Inc. v.
Rozay's Transfer, 791 F.2d 769, 777 (9th Cir. 1986).
Courts consider the following factors when ruling on a motion
for leave to file a Third Party Complaint: (a) prejudice to
the original plaintiff; (b) complication of issues at trial;
(c) likelihood of trial delay; and (d) timeliness of the
motion to implead. Green Valley Corp. v. Caldo Oil
Co., 2011 WL 1465883, at *8 (N.D. Cal. Apr.18, 2011)
(citations omitted).
III.
ANALYSIS
Defendants
Winter and Fishman seek leave to file a third party complaint
against Third Party defendants Eui Gwan Oh, Jin Young Lee,
Sang Sook Lee, and Shannon Yang. Winter and Fishman contend
that these Third Party defendants are responsible for all or
part of plaintiff’s promissory fraud claim against
them. Nonetheless, the Court finds that the factors
court’s consider in ruling on a motion for leave to
file a third party complaint do not support granting the
instant motion.
In
particular, the Court finds that the instant motion is
untimely. This action was initiated in August 2014 (nearly
two years ago) and the deadline for defendants to file a
motion for leave to file amended pleadings or to add partes
was September 4, 2015 (nearly a year ago). Nonetheless,
Winter and Fishman are only now seeking leave to file their
third party complaint. See also Clear-View Tech, Inc. v.
Rasnick, 2015 WL 1307112, at *4 (N.D. Cal. Mar. 23,
2015) (finding motion for leave to file third party complaint
was untimely where motion was filed fifteen months after
defendant’s answer was filed). In their motion, Winter
and Fishman’s only justification for their delay is
that they had anticipated that the Court would grant their
motion for summary judgment, thus dismissing them from this
case entirely. Winter and Fishman note that, at the hearing
on their motion for summary judgment, the Court indicated
that it was tentatively inclined to grant their motion for
summary judgment. Nonetheless, the Court ultimately
determined to deny Winter and Fishman’s motion for
summary judgment. Dkt. 114. Winter and Fishman state that, in
reliance on the Court’s tentative ruling, they elected
not to file the instant motion and on that ground contend
that the Court should not find their motion to be untimely.
This argument is without merit. Winter and Fishman did not
file their motion for summary judgment until January 22,
2016. Dkt. 76. By that time, the deadline to seek leave to
file amended pleadings or to add parties had already passed.
Moreover, defendants took the depositions of plaintiff and
nearly all of the Third Party Defendants near the end of last
year-i.e., before Fishman and Winter filed their motion for
summary judgment. See Hunter Decl. ¶ 3. See
also 6 Wright & Miller, Federal Practice &
Procedure § 1454 (2016 3d ed.) (“a motion to bring
in a third party may be denied . . . especially when . . .
the movant cannot reasonably explain the delay [in bringing
the motion]”). Moreover, the Court finds Winter and
Fishman’s reliance on the Court’s tentative
ruling misplaced. The Court’s tentative ruling was just
that-a tentative ruling. It was not a final ruling
on Winter and Fishman’s motion for summary judgment,
nor was it intended to be interpreted as such. Accordingly,
until the Court entered its final order neither party was
entitled to assume that the Court would either grant or deny
the motion for summary judgment.
In
addition, the Court finds that permitting Winter and Fishman
to file their third party complaint would unnecessarily
complicate the issues presented in this action and likely
delay the trial date. Trial is currently set for September
13, 2016 and the parties completed fact discovery on March
31, 2016. If the Court permits Winter and Fishman to add four
additional defendants to this action, the parties will likely
need to conduct additional discovery and motions practice
regarding the conduct of those defendants. This, in turn,
will likely require an extension of the trial date. The Court
finds that it would be imprudent, on the eve of trial, to
inject an entirely new set of defendants, claims, and facts
in this action. See also Zero Tolerance Entm’t,
Inc. v. Ferguson, 254 F.R.D. 123, 127 (C.D. Cal. 2008)
(denying motion for leave to file third party complaint where
discovery cut-off date had already passed and
“permitting a third-party to now appear would require
extending the discovery cut-off date, as well as delaying the
trial.”).
Finally,
the Court finds that plaintiff would suffer prejudice if
Winter and Fishman are permitted to file their third party
complaint. Plaintiff represents that she is an 80-year old
woman who has previously suffered a stroke and has been
diagnosed with dementia and Parkinson’s disease. As
plaintiff notes, any delay in the trial would force plaintiff
to risk further and serious deterioration to her health, as
well as potentially her ability to attend trial in person.
Winter and Fishman argue that plaintiff will suffer no
prejudice if they are permitted to file their third party
complaint. They argue that at the beginning of this action
plaintiff’s counsel took efforts to notice and take
plaintiff’s video deposition in the event she could not
attend trial. However, this does not change the fact that,
with further delays, it becomes less likely that plaintiff
will be able to attend trial in person. And, in ...