United States District Court, S.D. California
ORDER GRANTING MOTION FOR LEAVE TO FILE A FIRST
AMENDED COMPLAINT [DOC. 15]
J.Whelan Unitea States District Judge
Timothy Nicholas and Kay Nicholas seek leave to file a First
Amended Complaint (“FAC”). Defendant Lance Camper
MFG Corp. opposes.
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 GRANTS
the motion [Doc. 15].
lawsuit arises from Plaintiffs purchase of a recreational
vehicle (“RV”) from a San Diego dealer in
February 2016. (See Proposed FAC¶¶ 3, 5.) In
an apparent attempt to avoid paying California sales tax,
Plaintiffs took delivery of the RV in Arizona. (Id.
¶¶ 8, 9, 61.) Unfortunately, after taking delivery
of the vehicle, Plaintiffs discovered numerous defects with
the vehicle, and now seek the protection of California law.
Accordingly, on June 21, 2017, Plaintiffs filed a lawsuit
against Lance Camper MFG, Corp., one of the defendants who
was more than happy to assist Plaintiffs in avoiding paying
California sales taxes. (See Notice of Removal [Doc.
1], Ex. A [Doc. 1-2].)
24, 2017, Lance Camper removed the lawsuit to this Court.
Plaintiffs now seek to amend the Complaint to add, among
other things, fraud-based causes of action and the dealer as
a defendant. Lance Camper opposes the motion to the extent
Plaintiffs seek to add the fraud-based causes of action.
Lance Camper contends the amendment should be denied because
the amendments would be futile and because Lance Camper will
be prejudiced given Plaintiffs undue delay in seeking leave
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).
Camper argues that allowing Plaintiffs leave to amend to add
the fraud claims would be futile because they cannot maintain
the claims. (Opp'n [Doc. 17] 6:25- 26.) In
support of this argument, Lance Camper raises two theories.
Camper's first argument asserts that Plaintiffs'
fraud and misrepresentation claims are premised on defendants
attempt to deprive Plaintiffs of their rights under
California's Song-Beverly Consumer Warranty Act (the
“Song-Beverly Act”). (Opp'n 7:8-12.)
According to Lance Camper, because Plaintiffs allege
“throughout the FAC that title passed to them in
California… and the lemon law (Song-Beverly) applies
to their claim, ” Lance Camper argues Plaintiffs were
not deprived of those rights and could not have suffered
harm. (Id. 7:2-14.) There are two problems with this
argument. First, it remains unclear whether Plaintiffs are
entitled to sue under the Song-Beverly Act given that they
took delivery of the RV in Arizona. In short, it is unclear
whether Plaintiffs have been “deprived” of their
rights under the Song-Beverly Act. Second, and perhaps more
importantly, Plaintiffs are allowed to plead alternative
facts and theories. Lacey v. Maricopa Cty., 693 F.3d
896, 918 n. 10 (9th Cir. 2012). Thus, Plaintiffs'
allegation that title passed in California and the
Song-Beverly Act applies to them does not preclude
Plaintiffs' fraud based claims.
Camper next alleges that leave to amend should be denied
because the proposed FAC is not plead with sufficient
particularity. Federal Rule of Civil Procedure Rule 9(b)
provides that “[i]n alleging fraud or mistake, a party
must state with particularity the circumstances constituting
fraud or mistake. Malice, intent, knowledge, and other
conditions of a person's mind may be alleged
generally.” Fed.R.Civ.P. 9(b). The rule applies to all
causes of action based in fraud. Vess v. Ciba-Geigy Corp.
USA, 317 F.3d 1097, 1102-5 (9th Cir. 2003). It requires
“the circumstances constituting the alleged fraud [to]
be specific enough to give defendants notice of the
particular misconduct so that they can defend against the
charge and not just deny that they have done anything
wrong.” Id. at 1106 (internal citations and
quotation marks omitted). Thus, to survive a challenge based
on Rule 9(b), a complaint must allege the “who, what,
when, where, and how” of the misrepresentation.
Id. The complaint must also explain why the
representation complained of was false. Id.
Plaintiffs' fraud cause of action omits any information
regarding the who, when, where and what was said. However,
although the fraud-based claims are insufficiently pled,
leave to amend should only be denied if the court
“determines that the pleading could not possibly be
cured by the allegation of other facts.” Ebner v.
Fresh, Inc., 838 F.3d 958, 968 (9th Cir. 2016)
(overruled on other grounds) (citing Doe v. United
States, 58 F.3d 494, 497 (9th Cir. 1995). That is not
the case here. Nothing prevents Plaintiffs from being able to
plead their fraud-based claims with the particularity
required by Rule 9(b). Because ...