United States District Court, S.D. California
ROBERT M. JAFFE, individually and as Trustee of the Robert M. Jaffe Trust, dated 10/08/1990, Plaintiff,
MICHAEL DEMICH, et al., Defendants.
ORDER DENYING MOTION FOR LEAVE TO AMEND THE COMPLAINT
Thomas J. Whelan United States District Judge.
Robert Jaffe requests leave to amend the First Amended
Complaint (“FAC”). Defendants Michael Demich and
Michael A. Demich Construction, Inc. (collectively
Court decides the matter on the papers submitted and without
oral argument pursuant to Civil Local Rule 7.1(d)(1). For the
reasons discussed below, the Court DENIES
the motion [Doc. 33].
2009, Plaintiff Robert Jaffe entered into an informal
agreement with Defendant Michael Demich, under which Demich
would perform work on Jaffe's property in Escondido,
California, in exchange for a fee. (FAC [Doc. 4]
¶ 6.) Specifically, Demich was charged with improving
“an appurtenant easement in the form of an access road
adjacent to [Jaffe's] property and adjacent to the
property of neighbor Robert Bradshaw” and two other
neighboring properties owned by Corbett and Wymbs.
(Id.) Demich entered into subcontracts with
Joe's Paving Company (“Joe's Paving”) to
assist with the work. (Id. ¶ 7.) Jaffe alleges
the contract with Joe's Paving “specified that
Joe's Paving's billings for work would include the
costs for Joe's Paving to obtain and maintain liability
insurance for the work to be performed.” (Id.)
Jaffe also alleges he paid Demich to be added as an
additional insured under Demich's general liability
policy, and that Jaffe continued payments on the policy from
2009 through the conclusion of the work in 2012.
2011 through 2013, Jaffe was involved in litigation against
his neighbors Bradshaw, Corbett, and Wymbs, during which
Jaffe claims he paid $580, 000 in litigation costs.
(FAC ¶ 17.) Jaffe alleges that his
“liability for these damages arose, not as a result of
any actual fault on his part, but solely by operation of law,
arising from the actions of defendants and his agents as to
the damage they caused to the neighbors' property.”
(Id. ¶ 13.) Accordingly, Jaffe alleges he is
entitled to indemnity from Defendants for: (1) the damages
paid to Bradshaw, Corbett, and Wymbs; (2) legal costs
incurred in defending the underlying action; and (3) loss of
value to his property resulting from the Superior Court's
Judgment in the underlying matter. (Id. ¶¶
Jaffe concedes that no written contract existed between
Demich and himself for general contractor services, he
alleges a written contract existed for general liability
insurance payments on Demich's policy issued by AIX
Specialty Insurance Co. (“AIX”), under which
Jaffe was named an additional insured. (Plf.'s
Reply [Doc. 35] 2:11-14.) Jaffe contends a Certificate
of Insurance issued on September 1, 2009 (the
“Certificate”) by Target Financial &
Insurance Services (“Target Financial”)
constitutes the written contract confirming Defendants'
promise to provide liability insurance coverage.
(Id. 2:14-19, 4:2-15.) Accordingly, Jaffe alleges
AIX's denial of his insurance claim for coverage for the
underlying litigation constituted a breach of the written
contract between Jaffe and Demich. (Id. 4:18-26.) He
now seeks to amend the FAC to add a cause of action for
breach of contract based on the Certificate.
(P&A [Doc. 33] 2:11-12.)
Rule of Civil Procedure 15(a) provides that after a
responsive pleading has been served, a party may amend its
complaint only with leave of court, and leave “shall be
freely given when justice so requires.” Fed.R.Civ.P.
15(a). Granting leave to amend rests in the sound discretion
of the district court. Pisciotta v. Teledyne Industries,
Inc., 91 F.3d 1326, 1331 (9th Cir. 1996). Although the
rule should be interpreted with extreme liberality, leave to
amend is not to be granted automatically. Jackson v. Bank
of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990)
(citations omitted). Five factors are taken into account to
assess the propriety of a motion for leave to amend: (1) bad
faith, (2) undue delay, (3) prejudice to the opposing party,
(4) futility of amendment, and (5) whether the plaintiff has
previously amended the complaint. Johnson v.
Buckley, 356 F.3d 1067, 1077 (9th Cir. 2004).
assessing whether a proposed amendment should be permitted,
the court's limited role is identical to its role in
assessing a 12(b)(6) motion to dismiss for failure to state a
claim, namely to assess the legal feasibility of the
complaint, not to weigh evidence or resolve the disputed
facts of the case. See e.g., Luce v.
Dalton, 166 F.R.D. 457 (S.D. Cal. 1996). It follows
that, when determining the legal feasibility of a proposed
amendment, “[t]he Court must accept as true the
complaint's material allegations and any reasonable
inferences that may be drawn from them.” Chavez v.
Immigration Naturalization Service, 17 F.Supp.2d 1141,
1143 (S.D. Cal. 1998), citing Parks School of Business,
Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995)
(“We take all allegations of material fact as true and
construe them in the light most favorable to the nonmoving
Demich argues the motion to amend should be denied because
the proposed amendment has been proffered in bad faith, is
untimely, and because it would be futile. (Opp.
[Doc. 34] 3:22-7:1.) Because the Court agrees that the
amendment would be futile, the remaining arguments will not
successfully plead a breach of contract claim in California,
Jaffe must allege facts demonstrating: (1) the existence of a
contract; (2) Jaffe's performance of all contractual
obligations; (3) Demich's breach; and (4) that Jaffe
suffered damages from the breach. See Maxwell v.
Dolezal, 231 Cal.App.4th 93, 98 (2014). Under California
law, the interpretation of a written contract is a question
of law. Citri-Lite Co. v. Cott Beverages, Inc., 721
F.Supp.2d 912, 922 (E.D. Cal. 2010). So too is the question
of whether a contract is sufficiently definite. Hynix
Semiconductor Inc. v. Rambus Inc., 441 F.Supp.2d 1066,
1073 (N.D. Cal. 2006).
Jaffe's reply clarifies that the proposed breach of
written contract claim is premised on the theory that the
Certificate constitutes the written contract in ...