Court Opinion

ID: 2821541
Source: CourtListenerOpinion
Date Created: 2015-07-29 21:11:12.745413+00
Date Added: 2024-06-11T12:34:23.869106
License: Public Domain

Filed 7/29/15 Pendola Family Trust Partnership v. Pan Pacific (Pine Creek), L.P. CA3
                                           NOT TO BE PUBLISHED
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                                      THIRD APPELLATE DISTRICT
                                                       (Nevada)
                                                            ----

PENDOLA FAMILY TRUST PARTNERSHIP,                                                            C074300

                   Plaintiff and Appellant,                                         (Super. Ct. No. 75175)

         v.

PAN PACIFIC (PINE CREEK), L.P. et al.,

                   Defendants and Respondents.

         This case deals with a limited partnership that has become strained, based on the
claim of the limited partner and plaintiff, Pendola Family Trust Partnership (Pendola),
that it was cheated out of converting its limited partnership units in the Pine Creek
Shopping Center into other real estate by defendants Pan Pacific (Pine Creek) L.P.; PK II
Holdco LLC; Pan Pacific Retail Properties Inc.; Kimco Realty Corporation; Prudential
Real Estate Investors; Prudential Financial Inc.; PR II PK Member LLC; and PK II PP
Pine Creek GP LLC. The facts demonstrate, however, that Pendola was attempting a

                                                             1
1031 exchange1 to avoid tax consequences of selling its units, but that attempt failed
through no fault of defendants.
       Pendola could have received $3.84 million for its 6.32 percent limited partnership
interest when a joint venture between Kimco Realty Corporation and Prudential
Insurance Company of America merged into and became the owner of Pendola’s general
partner. Instead, as noted, Pendola tried to convert its units via the 1031 exchange.
Although Pendola did not have a property conversion right under its partnership
agreement, the Kimco/Prudential joint venture tried to accommodate Pendola and
allowed it to place a guaranty on the Pine Creek Shopping Center’s mortgage. Pendola
agreed to do everything necessary to effectuate the 1031 exchange, including obtaining
lender consent. Lender consent was required because the partnership’s mortgage loan
agreement contained single purpose entity covenants that precluded the partnership from
buying a property to be exchanged for Pendola’s units. The lender refused to consent.
Still, the Kimco/Prudential joint venture continued attempting to accommodate Pendola
by offering to exchange one of the joint venture’s separate properties, the Angels Camp
Towne Center, for Pendola’s units so the single purpose entity would not be implicated.
This alternative transaction failed, however, because Pendola and the Kimco/Prudential
joint venture could not agree on a price for Pendola’s units.
       A year and one-half later, Pendola initiated this lawsuit against defendants for not
converting Pendola’s units. Pendola alleged breach of contract, breach of fiduciary duty,
and fraud claims. The trial court correctly granted summary judgment in favor of
defendants, based on the following: there was no breach of contract under the
unambiguous language of the contract; there was no breach of fiduciary duty because the

1       A 1031 exchange is an “exchange of investment property to defer capital gains
taxes.” (McGuire v. More-Gas Investments, LLC (2013) 220 Cal. App. 4th 512, 516,
fn. 2.)

                                             2
general partner owed no fiduciary duty to its limited partner, Pendola, in negotiating at
arm’s length; and there was no fraud because there were no misrepresentations or
concealments.
       While the summary judgment motion was pending, and after three and one-half
years of extensive litigation, Pendola sought leave to amend its complaint a third time,
adding seven new defendants and three causes of action, and almost tripling the demand
amount from over $3.8 million to over $10 million. The trial court properly exercised its
discretion denying leave to amend because Pendola unreasonably delayed trying to
amend its complaint and defendants would be prejudiced by the amendment.
       Finally, the trial court also properly exercised its discretion to partially deny
Pendola’s motion to tax defendants’ costs because the court determined those costs were
reasonably necessary to the litigation.
       We affirm.
                    FACTUAL AND PROCEDURAL BACKGROUND
                                              A
           Formation Of The Western/Pine Creek Limited Partnership To Own
                      25 Percent Of The Pine Creek Shopping Center
       Since 1999, the Pine Creek Shopping Center in Grass Valley has been owned by
two tenants in common, owning separate 75 percent and 25 percent undivided interests.
       This case is about the 25 percent tenant in common, which is a partnership
originally known as Western/Pine Creek Limited Partnership. Pendola’s interest in the
Pine Creek Shopping Center is in the Western/Pine Creek Limited Partnership. Pendola
was issued 88,498 limited partnership units, constituting its 6.32 percent interest in the
Pine Creek Shopping Center (which was 25.28 percent of Western/Pine Creek Limited
Partnership’s 25 percent ownership). Western Properties Trust, a publically-traded real
estate investment trust, was the general partner in the Western/Pine Creek Limited
Partnership (owning the remaining part of the 25 percent interest in Western/Pine Creek)

                                              3
and it also owned the entire remaining 75 percent undivided interest in the Pine Creek
Shopping Center.
       Thus, the ownership in the Pine Creek Shopping Center looked like this:

          Pendola’s interest in the shopping center:
                  (25.28% X 25%) = 6.32%

       Under the original agreement of limited partnership, Pendola could not dissolve
the Western/Pine Creek Limited Partnership or partition the Pine Creek Shopping Center.
But, under certain circumstances, Pendola could convert its units into shares of Western
Properties Trust, or at the election of Western Properties Trust, the cash equivalent of
those shares. Pendola did not have the right to convert its units into another property.
From Pendola’s standpoint, however, it entered the Western/Pine Creek Limited
Partnership to avoid the “debt relief taxation” from Pendola’s prior financial involvement

                                             4
in the Pine Creek Shopping Center.2 To that end, Western Properties Trust agreed to
replace an existing loan on the Pine Creek Shopping Center with internal financing and
agreed to pay Pendola’s taxes on any sale of the property within the first five years. In
the original agreement of limited partnership, Pendola represented and warranted that it
was a “sophisticated investor, able and accustomed to handling sophisticated financial
matters for itself, particularly real estate investments, and that i[t] ha[d] a sufficiently
high net worth that it d[id] not anticipate a need for the funds that it ha[d] invested in the
Partnership in what it underst[ood] to be a highly speculative and liquid investment.” At
the same time, Western Properties Trust (which was the general partner) was given “full,
complete and exclusive discretion to manage and control” and to “make all decisions
affecting the business and assets of the Partnership.” These rights expressly included
placing mortgage debt on the partnership, transferring the general partner’s interest to a
wholly-owned subsidiary or in connection with a merger, and amending the original
agreement of limited partnership.
                                               B
                            Western Properties Trust Merges Into
                              Pan Pacific Retail Properties Inc.
       Within the first year of the original agreement of limited partnership, Western
Properties Trust merged into Pan Pacific Retail Properties Inc., another real estate
investment trust (so now Pan Pacific Retail Properties Inc. was the new general partner).
The name of the partnership was changed to Pan Pacific (Pine Creek) L.P.
       Thus, the ownership in the Pine Creek Shopping Center now looked like this:

2      It is not clear (and is immaterial to this appeal) exactly what Pendola’s prior
financial involvement was in the Pine Creek Shopping Center.

                                               5
          Pendola’s interest in the shopping center:
                  (25.28% X 25%) = 6.32%

       In anticipation of the merger, Western Properties Trust and Pendola amended the
original agreement of limited partnership to clarify that Pendola’s units would be
convertible into 54,869 shares of Pan Pacific Retail Properties Inc. (reflecting the
difference in value between the shares of Western Properties Trust and the shares of Pan
Pacific Retail Properties Inc.) or into the cash equivalent, at the election of Pan Pacific
Retail Properties Inc. Pan Pacific Retail Properties Inc. also allocated to Pendola $3.792
million of the partnership’s debt, so Pendola could continue to avoid adverse tax
consequences.

                                              6
                                              C
                      Pan Pacific Retail Properties Inc. Merges With
                            The Kimco/Prudential Joint Venture
       In July 2006, Kimco Realty Corporation, KRC Acquisition Inc., 3 Pan Pacific
Retail Properties Inc., among others, entered into a plan for KRC Acquisition Inc. to
merge into Pan Pacific Retail Properties Inc. and acquire its 140 properties, including the
Pine Creek Shopping Center. By the time the merger closed, the Kimco/Prudential joint
venture had been formed (owned 85 percent by affiliates of the Prudential Insurance
Company of America and 15 percent by affiliates of Kimco Realty Corporation) to
acquire the 140 properties of Pan Pacific Retail Properties Inc.. In connection with the
merger, a wholly-owned subsidiary of the joint venture entities -- named PK II PP Pine
Creek GP LLC -- had replaced Pan Pacific Retail Properties Inc. as the general partner of
the partnership.
       The partnership continued to own a 25 percent undivided interest in the Pine
Creek Shopping Center, while another wholly-owned subsidiary of the Kimco/Prudential
joint venture -- named PK II Pine Creek LP -- became owner of the remaining 75 percent
undivided interest in the Pine Creek Shopping Center. The 75 percent tenant-in-common
interest was transferred during the two-day closing through special warranty deeds, first
from Pan Pacific Retail Properties Inc. to Kimco Realty Corporation on October 31,
2006, and, in turn, from Kimco Realty Corporation to PK II Pine Creek LP on
November 1, 2006. The Kimco/Prudential joint venture merged into Pan Pacific Retail
Properties Inc., then Pan Pacific Retail Properties Inc. assigned its interest in the

3      KRC

 Acquisition, Inc., was a joint venture owned 85 percent by affiliates of the Prudential
Insurance Company of America and 15 percent by Kimco Realty Corporation.

                                              7
partnership to the wholly-owned subsidiary of the Kimco/Prudential joint venture, which
was the general partner.
       Thus, the ownership in the Pine Creek Shopping Center now looked like this:

         Pendola’s interest in the shopping center:
                 (25.28% X 25%) = 6.32%

                                             D
                  Pendola Negotiates With The Kimco/Prudential Joint
                           Venture To Avoid Tax Consequences
       Pendola had two options under the merger of Pan Pacific Retail Properties Inc.
with the Kimco/Prudential joint venture: (1) Pendola could exercise its original
conversion right and exchange its units for $70 per unit, which was the price of the stock
for Pan Pacific Retail Properties Inc. in the merger; or (2) Pendola could remain a limited
partner. Both options had tax consequences. If Pendola exchanged its units for cash,
Pendola would receive $3.84 million (55,689 units x $70), resulting in a tax liability of
between $2.7 million to $2.8 million. If Pendola stayed in the partnership, the loan that

                                             8
Pan Pacific Retail Properties Inc. allocated to Pendola would be paid off, causing a
similar tax consequence.
       To avoid these tax consequences, Pendola asked the Kimco/Prudential joint
venture to allow Pendola to attempt a 1031 tax exchange, in which Pendola would
exchange its interest in the partnership for ownership interests in a new property.
Pendola’s tax advisor, Kevin McBride, a certified public accountant and a lawyer with a
master of law degree in taxation, was unsure whether this strategy would work.
Pendola’s James Richards, its long-time attorney who had known the Pendola family for
over 50 years, negotiated with the joint venture on Pendola’s behalf. Representing the
Kimco/Prudential joint venture was the Wachtell law firm and two of its attorneys, David
Shapiro and Scott Golenbock.
       During these negotiations, Pendola’s Richards was informed in October 2006 that
the partnership would place a $31 million mortgage loan on the Pine Creek Shopping
Center. Pendola asked if it could provide a guaranty on the loan to maintain its debt
position, because without it, Pendola would incur tax consequences for debt forgiveness.
In exchange, Pendola agreed to give up any rights it had under the original agreement of
limited partnership to proceeds from the mortgage.
                                             E
                    Pendola Partially Guarantees The Mortgage Loan
       The Wachtell law firm drafted the guaranty for the last $3.7 million of the $31
million mortgage loan for Pendola at Pendola’s request. The guaranty specifically stated
that the partnership had obtained the mortgage loan and referred to several documents
that the partnership executed in connection with that loan, including a promissory note,
deed of trust, assignment of leases and rents, and security agreement.
       Richards and McBride reviewed the guaranty on behalf of Pendola. Richards did
not review or request the loan agreement or related documents but later stated, “he
wished he had read them.” McBride also did not review the loan agreement or related

                                             9
documents. The manager of Pendola, William Pendola Jr., signed the guaranty, but he
did not communicate with anyone at Kimco about the guaranty. He also did not review
the loan agreement or related documents.
       On November 1, 2006, the partnership (as the 25 percent owner) and PK II Pine
Creek LP executed the loan agreement and related documents in which Merrill Lynch
lent $31 million to the partnership and PK II Pine Creek LP and placed a mortgage on the
Pine Creek Shopping Center.
       On November 13, 2006, Pendola executed the guaranty.
                                              F
        The Third Amendment To The Original Agreement Of Limited Partnership
       Wachtell also provided to Richards a first draft of a proposed third amendment to
the agreement of limited partnership. The conversion right in section 8.4 of the third
amendment was revised to reflect the parties’ agreement on Pendola’s desired 1031
exchange.
       In pertinent part, the third amendment provides as follows: Paragraph 8.4(g)(iii)
of the third amendment states, “[t]he Converting Group shall be solely responsible to
obtain and deliver all Conversion Deliverables and to satisfy all Conversion Conditions,
including, as applicable, negotiating all Conversion Property Purchase Documents,
obtaining all consents, coordinating all due diligence (including third party reports), at the
Converting Group’s sole cost and expense.” One of the conversion conditions included
providing “evidence of all consents . . . from . . . third parties (including lenders) which
are necessary to consummate the series of transactions arising out of the exercise of a
Conversion Right.” The third amendment defined the “Converting Group” as “[t]he
Limited Partners that submit a valid Conversion Notice,” here Pendola. The third
amendment gave Pendola until April 31, [sic] 2007, to satisfy the conversion conditions
and give the general partner notice of the conversion and then until October 31, 2007, to

                                              10
close on the conversion. After October 31, 2007, the general partner “ha[d] the right” to
purchase Pendola’s units for $70, but it did not have to.
       In section 3.2(b), each partner “represent[ed] and warrant[ed]” that each partner
had the necessary organizational “authori[ty]” from its own “partner(s), committee(s),
trustee(s), beneficiaries, directors and or shareholder(s)” to enter into the business of the
partnership.
       In article XII of the third amendment, the parties agreed to the following entitled,
“Arm’s Length Agreement”: “This Agreement is the product of negotiations between the
parties hereto represented by counsel and any result of construction relating to
interpretation against the drafter of an agreement shall not apply to this Agreement and
are expressly waived.”
       Pendola’s Richards reviewed the third amendment before it was executed by
Pendola. His only comments related to the “number of Pendola’s limited partnership
Units, the conversion price of $70, and the reserved cash.”
                                              G
                           Failure Of The Conversion Conditions
       To effectuate the 1031 exchange, Pendola executed a purchase agreement for a
retail center known as Red Rock Plaza in Tulare County.
       On December 27, 2006, Pendola’s Richards sent attorney Golenbock of the
Kimco/Prudential joint venture a “Notice of Exercise of Conversion Right” requesting
that the general partner coordinate with the partnership to buy Red Rock Plaza pursuant
to section 8.4 of the third amendment.
       On January 11, 2007, Golenbock e-mailed Richards that the current lender would
not consent to the exercise of section 8.4 of the third amendment because the single
purpose entity covenants in the partnership’s mortgage loan agreement prevented the
partnership from acquiring other properties. Pendola still wanted to have some “tax-free
exit” from the partnership, so Richards asked the general partner to request that the lender

                                              11
waive any loan defaults under the loan agreement that might arise out of the purchase of
Red Rock Plaza. The lender refused.
                                            H
                     The Parties Attempt An Alternative Transaction
      Kimco/Prudential joint venture’s Golenbock and Pendola’s Richards tried to think
of “potential structures for an exchange that might work.” One option was for Pendola to
exchange its units for another property already owned by the Kimco/Prudential joint
venture. Pendola suggested purchasing Angels Camp Towne Center from the
Kimco/Prudential joint venture. Then, the partnership would distribute a portion of
Angels Camp Towne Center to Pendola in redemption of its interest valued at
approximately $3.8 million and Pendola would use cash to purchase the remainder of
Angels Camp Towne Center, which in total was valued at approximately $11 million.
      On April 27, 2007, Richards e-mailed Golenbock a “Notice, election to convert,
and identification of . . . redemption property” identifying the Angels Camp Towne
Center. Pendola and the limited partnership entered into a purchase and sale agreement
for the Angels Camp Towne Center. The general partner intended to proceed with the
sale of the Angels Camp Towne Center, but during Pendola’s “due diligence” period,
Pendola claimed there were dilapidated conditions at the Angels Camp Towne Center,
including “roofing, sewer and water leaks.” Pendola wanted a decrease in price, but the
parties could not agree on a revised price. So, on December 27, 2007, Pendola
terminated the purchase agreement.
      On March 3, 2008, Richards wrote a letter to Golenbock notifying him Pendola
intended to cash in its 54,869 partnership units at $70 per unit. Golenbock responded that
the shares were worth less now, so the general partner was declining to purchase
Pendola’s units. Pendola remains the limited partner.

                                           12
                                              I
                                        The Lawsuit
       On August 3, 2009, Pendola filed a complaint against four named defendants
alleging the following five causes of action: (1) breach of contract; (2) fraud for
intentional misrepresentation; (3) promissory fraud -- promise without intent to perform;
(4) promissory fraud -- hidden intention not to comply with the covenant of good faith
and fair dealing; and (5) constructive fraud -- breach of fiduciary duty. These causes of
action arise out of the negotiation and implementation of the third amendment. The four
named defendants were Pan Pacific (Pine Creek) L.P., PK II Holdco LLC, Pan Pacific
Retail Properties Inc., and Kimco Realty Corporation. The complaint sought over $3.8
million in damages.
       In April 2010, Pendola filed a first amended complaint. The defendants and
causes of action remained the same.
       In January 2012, Pendola filed a second amended complaint adding four more
defendants, Prudential Real Estate Investors, Prudential Financial Inc., PR II PK Member
LLC, and PK II PP Pine Creek GP, LLC.
       In November 2012, defendants moved for summary judgment.
       In February 2013, Pendola filed its motion for leave to file a third amended
complaint. The proposed third amended complaint sought to add seven defendants and
three causes of action. It also nearly tripled the damages Pendola was seeking from
defendants from over $3.8 million to over $10 million. The three new causes of action
had to do with the merger of Pan Pacific Retail Properties Inc. and Kimco Realty
Corporation and a 23-year-old cotenancy agreement signed by Western Investment Real
Estate Trust and Connelly Development Inc. Connelly Development Inc. signed the
cotenancy agreement on behalf of Pine Creek Shopping Center Associates. Pendola
wanted to add the seven new defendants because it recently learned “the true names of

                                             13
the Doe defendant entities.” The trial court found that Pendola had the documents that
supported its motion eight months before it filed the motion.
       The trial court denied Pendola’s motion for leave to file a third amended
complaint for two reasons: (1) Pendola “ha[d] not sufficiently explained the delay in
filing the present motion”; and (2) “the amendment will severely prejudice defendants.”
       In June 2013, the trial court granted the motion for summary judgment.
       Defendants as the prevailing party then submitted a memorandum of costs.
Pendola filed a motion to tax costs. The trial court granted the motion to tax certain costs
and denied the motion as to other costs.
       Pendola timely appeals from the resulting judgment, claiming the trial court erred
in granting summary judgment, erred in denying its motion for leave to file a third
amended complaint, and erred in denying any part of its motion to tax costs.
                                       DISCUSSION
                                               I
                    The Trial Court Properly Granted Summary Judgment
                          On Each Of Pendola’s Causes Of Action
       Pendola contends the trial court erred in granting summary judgment because the
court improperly shifted the burden of producing evidence to Pendola and because
Pendola produced substantial evidence making a prima facie showing of a genuine issue
of material fact as to each cause of action.
       We begin by setting forth the standards on summary judgment and then explain
why the trial court was correct in granting summary judgment on each of Pendola’s
causes of action.
                                               A
                        Standard Of Review On Summary Judgment
       A motion for summary judgment should be granted if “there is no triable issue as
to any material fact” and the moving party is entitled to judgment as a matter of law.

                                               14
(Code Civ. Proc., § 437c, subd. (c).) A defendant meets its burden of showing that a
cause of action has no merit if it shows that one or more elements of the cause of action
cannot be established, or that there is a complete defense. (Code Civ. Proc., § 437c,
subd. (p)(2).) Once the defendant has met that burden, the burden shifts to the plaintiff to
show that a triable issue of material fact exists. (Ibid.) “[I]f a plaintiff who would bear
the burden of proof by a preponderance of evidence at trial moves for summary
judgment, he must present evidence that would require a reasonable trier of fact to find
any underlying material fact more likely than not. By contrast, if a defendant moves for
summary judgment against such a plaintiff, he may present evidence that would require
such a trier of fact not to find any underlying material fact more likely than not.”
(Aguilar v. Atlantic Richfield Co. (2001) 25 Cal. 4th 826, 845.)
       On appeal, we view the evidence in the light most favorable to the party opposing
summary judgment. (Lane v. City of Sacramento (2010) 183 Cal. App. 4th 1337, 1339.)
       Pendola contends the trial court misunderstood its role in reviewing the summary
judgment motion, failing to consider the evidence and inferences therefrom in the light
most favorable to the party opposing summary judgment. Not so.
       The trial court’s ruling properly quoted and cited the standard of review, applied
that standard in construing the undisputed facts, and came to a conclusion contrary to that
argued by Pendola. As to the law and standard of review the trial court followed, no
error appears. Now we turn to the substantive claims asserted by Pendola, which are
discussed below.
                                              B
                   The Trial Court Properly Granted Summary Judgment
                    On Pendola’s Breach Of Contract Cause Of Action
       Pendola alleged in its complaint that defendants breached their contract
obligations under paragraphs 8.4 and 8.5 of the third amendment to the original
agreement of limited partnership in refusing to comply with the terms of these

                                             15
paragraphs, including failing to perform certain conditions, covenants, and promises to
which they agreed and failing to approve the conversion deliverables to enter into the
escrow arrangements in response to Pendola’s attempted conversion. Pendola repeats
that same claim here, contending the trial court misconstrued the contract.
       The undisputed and unambiguous contract language provides otherwise and
controls here. (See Civ. Code, § 1638 [“The language of a contract is to govern its
interpretation, if the language is clear and explicit, and does not involve an absurdity”];
Founding Members of the Newport Beach Country Club v. Newport Beach Country Club,
Inc. (2003) 109 Cal. App. 4th 944, 956 [the objective words of the contract control rather
than the subjective intent of one of the parties].)
       Paragraph 8.4(g)(iii) of the third amendment states, “[t]he Converting Group shall
be solely responsible to obtain and deliver all Conversion Deliverables and to satisfy all
Conversion Conditions including, as applicable, negotiating all Conversion Property
Purchase Documents, obtaining all consents, coordinating all due diligence (including
third party reports), at the Converting Group’s sole cost and expense.” The third
amendment defined the “Converting Group” as “[t]he Limited Partners that submit a
valid Conversion Notice,” so here Pendola, because it was seeking the conversion.
       The trial court correctly ruled, “It is clear from the Third Amendment that
[Pendola] alone had the responsibility of obtaining the approvals. [Pendola] has failed to
demonstrate that it delivered the Conversion Condition. Without fulfilling that condition
precedent, Defendant(s) were not required to perform the next step, i.e., enter into an
escrow arrangement. Thus, the cause of action fails as a matter of law.”
       The trial court was correct because section 8.4(a) of the third amendment states
that Pendola’s “ ‘conversion right’ ” (which was defined in section 8.4(a) as the right “to
require the Partnership to acquire all . . . of its Limited Partnership Units in exchange for
all of the outstanding membership interests in one or more of the Conversion LLC’s”)
was “[s]ubject to the satisfaction of the Conversion Conditions.” The third amendment in

                                              16
the “Defined Terms” section defines “Conversion Conditions” to “mean[], with respect to
any exercise of Conversion Rights pursuant to section 8.4, satisfaction of each of the
following conditions [¶] . . . [¶] evidence of all consents, permits, licenses, approvals or
authorizations from governmental authorities or other third parties (including lenders)
which are necessary to consummate the series of transactions arising out of the exercise
of a Conversion Right.” Thus, the satisfaction of the conversion conditions was a
condition precedent to Pendola’s conversion right. (See Behrman v. Barto (1880) 54 Cal.
131, 134 [requirement that one party perform its covenants is a condition precedent under
a contract].)
       Pendola responds by asserting that the term “as applicable” in paragraph 8.4(g)(iii)
of the third amendment inserted ambiguity into the paragraph, leaving it open to debate
as to whether Pendola was required to satisfy “all” conditions or only those “applicable”
to Pendola. Pendola further argues that it was a question of fact as to whether obtaining
lender consent from “ ‘Kimco’s lender’ ”4 was a condition applicable to Pendola.
       Pendola’s assertion is not a reasonable reading of the third amendment for at least
two reasons.
       One, Pendola is inserting an extra phrase into paragraph 8.4(g)(iii) of the third
amendment, namely, as applicable “to Pendola.” Rather, “as applicable” without a
reference to the party reasonably means those “conversion conditions” that, by that
term’s definition, “are necessary to consummate the series of transactions arising out of
the exercise of a Conversion Right.” These conditions expressly include “consents,
permits, licenses, approvals or authorizations from governmental authorities or other third
parties (including lenders) which are necessary to consummate the series of transactions

4     The combined borrower under the mortgage loan was the partnership and PK II
Pine Creek LP, not Kimco.

                                              17
arising out of the exercise of a Conversion Right.” Thus, as applicable here, the
conversion conditions included obtaining consent of the lender.
       And two, Pendola’s reading of the third amendment that it, Pendola (as opposed to
another entity satisfying the conditions), was responsible for satisfying only some of the
conditions contradicts the beginning of the phrase which includes the language about
applicable conditions. (See McCaskey v. California State Automobile Assn. (2010) 189
Cal. App. 4th 947, 970 [“A contract is to be construed as a whole, ‘so as to give effect to
every part, if reasonably practicable, each clause helping to interpret the other’ ”].)
Specifically, section 8.4(g)(iii) of the third amendment states that “[t]he Converting
Group,” i.e., Pendola, “shall be solely responsible to obtain and deliver all Conversion
Deliverables and to satisfy all Conversion Conditions including, as applicable,
negotiating all Conversion Property Purchase Documents, obtaining all consents,
coordinating all due diligence (including third party reports), at the Converting Group’s
sole cost and expense.” (Italics added.) In fact, the next sentence sets forth the
obligation of the general partner with respect to the conversion conditions, i.e., “to
cooperate reasonably with the Converting Group.”
       Faced with the unambiguous language of section 8.4(g)(iii) of the third
amendment, Pendola next contends that even if it were obligated under the amendment to
obtain lender consent, “only Kimco engaged in efforts to obtain lender consent after it
executed the Third Amendment, and never mentioned, requested, or informed Pendola it
was its responsibility.” (Underlining omitted.) This fact is irrelevant. The general
partner cannot be liable for Pendola’s failure to even attempt to fulfill its contractual
obligations. (Rains v. Arnett (1961) 189 Cal. App. 2d 337, 347 [“A person cannot take
advantage of his own act or omission to escape liability”].)
       Pendola also claims the trial court failed to consider the general partner’s
representations in sections 3.2(b) and 6.1 of the third amendment that no consents were
required. Nothing in these sections states anything like that.

                                              18
       In section 3.2(b) of the third amendment, each partner “represent[ed] and
warrant[ed]” that each partner had the necessary organizational “authori[ty]” from its
own “partner(s), committee(s), trustee(s), beneficiaries, directors and/or shareholder(s)”
to enter into the business of the partnership. This representation had been in the
partnership agreement from the beginning of Pendola’s relationship with Western
Properties Trust as the general partner in 1999, long before the third amendment. It was
merely a representation by each partner, including Pendola and the general partner, that
each had approved the agreement according to its own internal corporate or partnership
requirements and that the partnership agreement did not violate that partner’s other
material agreements.
       As to Section 6.1 of the third amendment, it does not contain any representations.
It sets forth the “Management of the Partnership” and states what the “powers of the
General Partner shall include.” It lists the broad powers that Pendola, as the limited
partner, granted to the general partner to manage the partnership. Those powers included
the authority “to borrow money for the Partnership . . . and secure such indebtedness by
mortgage, deed of trust, pledge or other lien in the Partnership’s assets.”
       Section 6.1 of the third amendment actually enabled the general partner to do
exactly what Pendola now claims was wrongful: place a mortgage on the Pine Creek
Shopping Center and enter into the $31 million loan agreement (including the single
purpose entity covenants). Thus, even if it is true, as Pendola argues, the $31 million
loan agreement restricted what the general partner could do with respect to the
partnership, Pendola granted the general partnership the power to agree to those
restrictions.

                                             19
                                             C
                  The Trial Court Properly Granted Summary Judgment
                On Pendola’s Breach Of Fiduciary Duty Cause Of Action
       Pendola alleged in its complaint that defendants breached their fiduciary duty to
Pendola by making fraudulent promises and intentional misrepresentations. The trial
court properly concluded that the general partner “was not required to protect [Pendola’s]
interest” while negotiating the third amendment under the “clear and unambiguous
language of the partnership agreement” and in any event, Pendola “failed to demonstrate
any fraudulent promises or intentional misrepresentations.” The trial court was correct.
       Defendants did not owe Pendola a fiduciary duty when negotiating the third
amendment. Parties who are adverse, negotiating parties are not fiduciaries to one
another. (Persson v. Smart Inventions, Inc. (2005) 125 Cal. App. 4th 1141, 1162.) “[W]e
reject the notion that a confidential relationship may arise, in the course of arms-
length . . . negotiations between two [parties], both of whom are represented by counsel
and accountants . . . .” (Ibid.) Pendola’s tax advisor was Kevin McBride, a certified
public accountant and a lawyer with a master of law degree in taxation. Pendola also had
James Richards, its long-time attorney, negotiating on its behalf. On the other side
representing the Kimco/Prudential joint venture was the Wachtell law firm and two of its
attorneys, David Shapiro and Scott Golenbock. Here, before the merger of Pan Pacific
Retail Properties Inc. and the Kimco/Prudential joint venture, the joint venture entities
and Pendola were strangers. As Pendola admitted, they were all engaged in “arms-
length” negotiations about forming the partnership. Specifically, in article XII of the
third amendment, Pendola expressly agreed to the following entitled, “Arm’s Length
Agreement”: “This Agreement is the product of negotiations between the parties hereto
represented by counsel and any result of construction relating to interpretation against the
drafter of an agreement shall not apply to this Agreement and are expressly waived.”
This provision was not something that was simply carried over from the original

                                             20
partnership agreement, but it was a reflection of what transpired during the negotiation of
the third amendment.
       We also reject Pendola’s contention in its opening brief that the trial court
“improperly looked to Delaware law as legal authority to the effect the fiduciary duties of
‘loyalty and care’ owed a limited partner can be limited.” (Fn. omitted.) The third
amendment specifically stated, “This agreement shall be governed by and constructed in
accordance with the laws of the State of Delaware.” Thus, the trial court was required to
look to Delaware law in construing the fiduciary duty claims. (See Nedlloyd Lines B.V.
v. Superior Court (1992) 3 Cal. 4th 459, 470 [“a valid choice-of-law clause, which
provides that a specified body of law ‘governs’ the ‘agreement’ between the parties,
encompasses all causes of action arising from or related to that agreement”].)
       Any fiduciary duties a general partner owes to a limited partner “may be . . .
restricted or eliminated by provisions in the partnership agreement; provided that the
partnership agreement may not eliminate the implied contractual covenant of good faith
and fair dealing.” (6 Del. Code, § 17-1101, subd. (d).) As the trial court noted, the third
amendment did just that, namely, appropriately restricted any fiduciary duties owed.
Specifically, section 6.4(b) of the third amendment stated as follows: “The Limited
Partners expressly acknowledge that the General Partner is acting on behalf of the
Partnership, and the General Partner’s shareholders or interest holders . . . , and that the
General Partner is under no obligation to consider the separate interests of the Limited
Partner.” Thus, as the trial court noted, “the clear and unambiguous language of the
[third amendment] provides that the General Partner was not required to protect
[Pendola’s] interests.”
       The power of attorney provision in the third amendment does not change this
analysis, contrary to Pendola’s contention on appeal. The power of attorney provision in
the third amendment gives the general partner power to “sign, acknowledge, swear to,
deliver, file and record . . . any and all documents, certificates, and instruments as may be

                                              21
deemed necessary or desirable by the General Partner to carry out fully the provisions of
this Agreement and the [Delaware Revised Uniform Limited Partnership] Act.” It does
not place any fiduciary obligations on the general partner. And, Pendola’s claims are not
based on any documents being “sign[ed], acknowledge[d], sw[orn] to, deliver[ed], file[d]
[or] record[ed]” by the general partner on behalf of Pendola.
       For all these reasons, the trial court properly granted summary judgment on
Pendola’s breach of fiduciary duty cause of action.
                                              D
                  The Trial Court Properly Granted Summary Judgment
                           On Pendola’s Fraud Cause Of Action
       Pendola alleged in its complaint that defendants committed fraud on Pendola by
making false and fraudulent oral and written representations and concealments that
induced Pendola to enter into the third amendment. The trial court properly concluded
that Pendola “failed to demonstrate any misrepresentations or concealment.”
       “The elements of fraud are a misrepresentation, knowledge of its falsity, intent to
defraud, justifiable reliance and resulting damage. [Citation.] Fraud causes of actions
must be pled with specificity in order to give notice to the defendant and to furnish him
or her with definite charges. [Citation.] In drafting the complaint, ‘ “(a) [g]eneral
pleading of the legal conclusion of ‘fraud’ is insufficient; the facts constituting the fraud
must be alleged. (b) Every element of the cause of action for fraud must be alleged in the
proper manner (i.e., factually and specifically), and the policy of liberal construction of
the pleadings . . . will not ordinarily be invoked to sustain a pleading defective in any
material respect.” ’ ” (Gil v. Bank of America, N.A. (2006) 138 Cal. App. 4th 1371, 1381.)
       As a preliminary matter, Pendola incorrectly claims that a fraud cause of action is
never subject to summary judgment because fraud is always a question of fact. Not so.
For example, this court affirmed a grant of summary judgment against the plaintiff on his
fraud cause of action where the defendant “successfully showed [the plaintiff] could not

                                              22
have justifiably relied on [the alleged fraudulent mis]representations under the
circumstances.” (Hinesley v. Oakshade Town Center (2005) 135 Cal. App. 4th 289, 291,
303.)
        1.     Pendola Did Not Present Evidence Of Any Specific Misrepresentation
               Or Who Made Any Misrepresentations
        In its complaint, Pendola alleged the following misrepresentations: “Defendants
Kimco . . . made oral and written false and fraudulent misrepresentations in written
memorandums, emails, draft agreements and agreements as well as other writings to
Pendola . . . that induced Pendola to enter into the [third amendment].” (Bolding
omitted.) “The representations and deceit were made and perpetrated by defendants’
attorneys, agents, representatives, employees, servants and/or related parties including . . .
Scott W. Golenbock, Esq., Jim Caserio, David E. Shapiro, Matthew Golden, Howard
Overton, Bruce Rubenstein, Sara Lee, and others known to the Defendants . . . .”
(Bolding omitted.) The misrepresentations Pendola alleged in the complaint (and restates
in its opening brief) included terms in the third amendment that Pendola in its opening
brief contends were misrepresented to it by Kimco.
        The 16 items that Pendola lists in its opening brief as “misrepresentations” or
“concealments” are neither, as they are terms Pendola agreed to in the third amendment.
“[O]ne who assents to a contract is bound by its provisions and cannot complain of
unfamiliarity with the language of the instrument” (Madden v. Kaiser Foundation
Hospitals (1976) 17 Cal. 3d 699, 710), or more particularly here, that the language in the
agreement was somehow a fraudulent misrepresentation.
        In fact, Pendola has identified only three people who may have communicated
with defendants: Pendola’s manager (William Pendola Jr.), Pendola’s long-time
attorney, James Richards, and its tax advisor, Kevin McBride. As to McBride, he did not
review the third amendment before it was executed by Pendola, and he did not recall that
any one of “Kimco’s . . . accountants or attorneys had made representations about the tax

                                             23
consequences of this transaction.” As to William Pendola, he stated that “no
misrepresentations were made by Mr. Golenbock, James Caserio [the other counsel to the
Kimco-Prudential joint venture], Mr. Shapiro (of Wachtell), or Mr. Golden (of Kimco).”
As to Richards, he claims that Shapiro and/or Rubenstein5 “should have been ‘more
revealing’ to Pendola about the terms of the Loan Agreement,” and he was
“disappointed” that they were not more “revealing,” and “they didn’t take care of us.”
But Richards could not identify a specific person who misrepresented facts to him.
       2.     Defendants Had No Duty To Disclose Particular Terms
              Of The Loan Agreement To Pendola
       Pendola alleged in its complaint that Kimco concealed terms of the loan agreement
that affected the conversion right. Fraudulent deceit includes “[t]he suppression of a fact,
by one who is bound to disclose it, or who gives information of other facts which are
likely to mislead for want of communication of that fact.” (Civ. Code, § 1710, factor (3);
see Cicone v. URS Corp. (1986) 183 Cal. App. 3d 194, 200, fn. 1 [citing Civ. Code, § 1710
regarding deceit for a fraud cause of action].) Concealment rises to the level of fraud if
any of the defendants had a duty to disclose specific terms of the loan agreement to
Pendola. (See LiMandri v. Judkins (1997) 52 Cal. App. 4th 326, 336-337 [the
circumstances in which nondisclosure may be actionable presupposes there exists
between the parties some relationship in which a duty to disclose arises].)
       “There are ‘four circumstances in which nondisclosure or concealment may
constitute actionable fraud: (1) when the defendant is in a fiduciary relationship with the
plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to
the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff;

5      Bruce Rubenstein was the general counsel of Kimco Realty Corporation.

                                             24
and (4) when the defendant makes partial representations but also suppresses some
material facts.’ ” (LiMandri v. Judkins, supra, 52 Cal.App.4th at p. 336.)
       We have already discussed that there was no fiduciary duty here between Pendola
and defendants. As to the remaining three circumstances, defendants did not have
exclusive knowledge of the terms of the loan agreement nor did they conceal these terms
from Pendola. Rather, Richards knew as early as October 2006 that the partnership was
going to place a $31 million mortgage loan on the property. Pendola was allowed to
execute a guaranty with respect to the mortgage loan. The guaranty specifically stated
that the partnership had obtained the mortgage loan and referred to several documents
that the partnership executed in connection with that loan, including a promissory note,
deed of trust, assignment of leases and rents, and security agreement.
       Despite reviewing the guaranty on behalf of Pendola and knowing about the loan
agreement and these documents, neither William Pendola Jr. nor Richards asked any
defendant about the terms of the loan agreement nor did they ask for an opportunity to
review it, although Richards later stated, “he wished he had read them.” And William
Pendola Jr. admitted he never communicated with anybody at Kimco regarding the
guaranty. Pendola’s indifference about the terms of the loan agreement and related
documents, where it knew about their existence, did not obligate defendants to explain or
provide details about these documents to Pendola. (Assilzadeh v. California Federal
Bank (2000) 82 Cal. App. 4th 399, 405, 416 [appellate court upheld summary judgment
because the broker did not have a duty to disclose details of a construction defect lawsuit
to the buyer when the buyer could have learned the details].)
       As the trial court here correctly found: Pendola “failed to demonstrate any
misrepresentations or concealment. The undisputed material facts provide that the
original partnership agreement in effect when the mortgage loan was issued authorized
the partnership to borrow money without limitation and without Pendola’s consent;
Pendola was seeking to have approximately $3.7 million in debt on the property for tax

                                            25
purposes; when the loan was issued, Pendola was allowed to post a $3.7 million guaranty
as an accommodation; Pendola executed the guaranty; Pendola’s counsel (Richards)
reviewed the guaranty; the guaranty referenced the underlying loan documents; and,
neither Pendola nor his agents requested or reviewed the underlying loan documents.”
       3.     Pendola Presented No Evidence Of Defendants’ Intent To Defraud
       The third element of a fraud cause of action is “intent to defraud.” (Gil v. Bank of
America, N.A., supra, 138 Cal.App.4th at p. 1381.) Pendola presented no evidence to
infer defendants’ intent to defraud Pendola. To the contrary, here the general partner
agreed to the conversion right in the third amendment to accommodate Pendola’s attempt
to avoid tax liabilities. And the general partner continued to cooperate with Pendola on a
tax-free conversion of its limited partnership interests for 11 months after the lender
consent condition could not be satisfied.
       4.     Pendola Presented No Evidence That It Justifiably
              Relied On Any Alleged Misrepresentation
       The fourth element of a fraud cause of action is “justifiable reliance.” (Gil v.
Bank of America, N.A., supra, 138 Cal.App.4th at p. 1381.) The trial court here correctly
determined that Pendola could not have justifiably relied on any alleged
misrepresentations because Pendola’s lawyers and accountants failed to review the
critical documents. Specifically, the court found, “[T]he mere facts that [Pendola] and
[its] agents failed to review the underlying loan documents demonstrates that no
justifiable reliance can be found under the facts of this case.”
       Here, Pendola was represented by its tax advisor McBride, a certified public
accountant and a lawyer. Pendola also had James Richards, its long-time attorney,
representing it and negotiating on its behalf. Richards was an attorney with 40 years’
experience as a lawyer, the last 10 of which had been in “transactions, negotiation, real
estate things, commercial stuff.” He was also a licensed real estate broker. While
Richards said he relied on the other side’s attorneys representing the Kimco/Prudential

                                             26
joint venture, David Shapiro and Scott Golenbock from the Wachtell law firm, because
“they’re from Harvard and [Yale and] Wharton and all this jazz,” Pendola’s
representatives cannot invoke their purposeful ignorance in not reading the at-issue
documents to support a claim of justifiable reliance. (Marin Storage & Trucking, Inc. v.
Benco Contracting & Engineering, Inc. (2001) 89 Cal. App. 4th 1042, 1049 [“A party
cannot avoid the terms of a contract on the ground that he or she failed to read it before
signing”]; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal. 4th 394, 423
[“One party’s misrepresentations as to the nature or character of the writing do not negate
the other party’s apparent manifestation of assent, if the second party had ‘reasonable
opportunity to know of the character or essential terms of the proposed contract.’
[Citation.] If a party, with such reasonable opportunity, fails to learn the nature of the
document he or she signs, such ‘negligence’ precludes a finding the contract is void for
fraud in the execution”].) As we have noted, neither William Pendola Jr. nor Richards
asked any defendants about the terms of the loan agreement nor did they ask for an
opportunity to review it, although Richards later stated, “he wished he had read them.”
Moreover, William Pendola Jr. acknowledged he was not tricked into entering into the
third amendment. The trial court properly held “no justifiable reliance can be found
under the facts of this case.”
                                              E
                There Is No Basis On Which To Impose Alter Ego Liability
       As we have explained in our discussion above, the trial court correctly concluded
that Pendola had not raised triable issues of material fact to defeat summary judgment on
Pendola’s causes of action for breach of contract and fraud against the general partner.
Nevertheless, Pendola on appeal contends that who is the general partner and who are the
parties to the third amendment remains a disputed issue of material fact. It alleges that
“Kimco Is The True General Partner Of Pine Creek Directly or By Application of
Principles of Agency of the Alter Ego Doctrine and a Party to the Third Amendment.”

                                             27
(Underlining omitted.) Even if Kimco is a party to the loan agreement or the third
amendment, no cause of action against Kimco would lie for breach of contract or fraud,
because “[a]n alter ego defendant has no separate primary liability to the plaintiff.
Rather, plaintiff’s claim against the alter ego defendant is identical with that claimed by
plaintiff against the already-named defendant.” (Hennessey’s Tavern, Inc. v. American
Air Filter Co. (1988) 204 Cal. App. 3d 1351, 1358.) Thus, where Pendola has not proved
the underlying claim against the primary defendant, a ruling on an alter ego theory is
“moot.” (R & B Auto Center, Inc. v. Farmers Group, Inc. (2006) 140 Cal. App. 4th 327,
368.)
                                             F
                         Defendants’ Summary Judgment Motion
                         Complied With Procedural Requirements
        Pendola contends that defendants’ summary judgment motion was “littered with
numerous procedural deficiencies” that made Pendola’s “Task Nearly Impossible And
Constitute[d] Grounds For Reversal.” Pendola is wrong.
        Pendola takes issue with defendants’ separate statement of undisputed material
facts and asserts that defendants “do not state the actual exhibit reference where the
actual depositions can be found within Defendants’ supporting evidence.” Pendola
claims defendants’ deficiencies contravene Code of Civil Procedure section 437c,
subdivision (b)(1) which mandates, “The motion shall be supported by affidavits,
declarations, admissions, answers to interrogatories, depositions, and matters of which
judicial notice shall or may be taken. The supporting papers shall include a separate
statement setting forth plainly and concisely all material facts which the moving party
contends are undisputed. Each of the material facts stated shall be followed by a
reference to the supporting evidence. The failure to comply with this requirement of a
separate statement may in the court’s discretion constitute a sufficient ground for denial
of the motion.” Pendola further contends defendants’ deficiencies contravene California

                                             28
Rules of Court, rule 3.1350(d), (h) “by not referencing the exhibit where the evidence in
support of the fact can be located.”
       The record belies Pendola’s assertions. For example, even on the first page of the
memorandum of points and authorities in support of defendants’ summary judgment
motion, defendant cites two facts and each fact is supported by deposition testimony,
page and line citations, and the exhibit number where the deposition testimony can be
found. That is the case with virtually all of defendants’ citations to facts throughout its
motion. Simply put, there was no procedural basis on which the trial court should have
denied defendants’ summary judgment motion.
                                              II
               The Trial Court Acted Well Within Its Discretion In Denying
            Pendola’s Motion For Leave To File A Third Amended Complaint
       The trial court denied Pendola’s motion for leave to file a third amended
complaint for two reasons: (1) Pendola “ha[d] not sufficiently explained the delay in
filing the present motion”; and (2) “[t]he amendment will severely prejudice defendants.”
The court acted well within its discretion in denying the motion for these reasons.
(Flores v. Department of Corrections & Rehabilitation (2014) 224 Cal. App. 4th 199, 209
[standard of review].)
                                              A
                          Pendola Unreasonably Delayed Filing
                Its Motion For Leave To File A Third Amended Complaint
       On February 13, 2013, Pendola filed its motion for leave to file a third amended
complaint. The proposed third amended complaint sought to add seven defendants and
three causes of action. The three new causes of action had to do with the merger of Pan
Pacific Retail Properties Inc. and Kimco Realty Corporation and a 23-year-old cotenancy
agreement signed by Western Investment Real Estate Trust and Connelly Development
Inc. Connelly Development Inc. signed the cotenancy agreement on behalf of Pine Creek

                                             29
Shopping Center Associates. The trial court found that Pendola had the documents that
supported its motion eight months before it filed the motion. Pendola wanted to add the
seven new defendants because it recently learned “the true names of the Doe Defendant
entities.”
       The facts show Pendola could have obtained the documents and information that it
believed was critical to its new claims much earlier than February 2013, which is when it
filed its motion for leave to file its third amended complaint. In February 2011, two years
before the motion for leave to file the third amended complaint, the trial court had
ordered defendants to produce for deposition the person most knowledgeable regarding
the merger of Pan Pacific Retail Properties Inc. and Kimco Realty Corporation. They
did, but Pendola declined to take this deposition and instead three to four months later, in
April and June 2011, Pendola served new deposition notices asking for the person most
knowledgeable regarding the merger of Pan Pacific Retail Properties Inc. and Kimco
Realty Corporation. In July 2011, defendants responded in writing to the deposition
notices and also identified the two most knowledgeable persons, -- Kimco Realty
Corporation officer Matthew Golden, and Kimco Realty Corporation’s outside counsel in
the merger, Scott Golenbock of Wachtell. But Pendola chose not to take Golenbock’s
deposition until 15 months later, in October 2012.6
       Similarly, the 23-year-old cotenancy agreement, which Pendola sought to add to
the complaint through a breach of contract claim and an imposition of constructive trust
claim in the motion for leave to file the third amended complaint, was produced by
Kimco Realty Corporation in May 2012 in response to Pendola’s second set of requests
for production. And Pendola’s own witnesses, William Pendola Jr. and Kevin McBride,
testified in depositions that they were aware of accounting records that related to the new

6     At that time in October 2012, Pendola also deposed Bruce Rubenstein, the general
counsel of Kimco Realty Corporation, but did not depose Matthew Golden.

                                             30
claims under the cotenancy agreement as early as 2006 and 2007 because they received
quarterly reports relating to the cotenancy agreements during those years. The trial court
therefore was within its discretion to find that Pendola unreasonably delayed in adding
these claims.
       The trial court was also within its discretion to find that adding the seven
defendants was no reason to allow Pendola leave to file the third amended complaint.
Pendola wanted to add the seven new defendants because it recently learned “the true
names of the Doe Defendant entities.” In the declaration of Pendola’s attorney
supporting its motion for leave to file the third amended complaint, the attorney stated he
became aware of the “true names and proper parties to this litigation” on October 18,
2012. But, as the trial court correctly noted, Pendola did not need leave to substitute
named defendants for the Doe defendants. Pendola simply could have substituted those
names without leave of court. Its timely failure to do so was another reasonable basis for
the trial court’s finding of unwarranted delay. (A.N. v. County of Los Angeles (2009) 171
Cal. App. 4th 1058, 1066-1067) [there is “an implicit requirement that a plaintiff may not
‘unreasonably delay’ his or her filing of a Doe amendment after learning a defendant’s
identity”].)
                                              B
                    Granting Pendola Leave To File A Third Amended
                          Complaint Would Prejudice Defendants
       The trial court was also within its discretion to deny Pendola leave to file its third
amended complaint because “the amendment will severely prejudice defendants.” The
record provides ample support for the trial court’s finding and refutes Pendola’s claim on
appeal that the proposed third amended complaint did “not alter the nature of Pendola’s
claims previously alleged.” The proposed third amendment added three new theories of
relief and seven additional defendants. Some of Pendola’s new claims were based on a
cotenancy agreement that was 23 years old and to which it was not even a party. It also

                                             31
almost tripled the amount of claimed damages to over $10 million. If the amendment had
been permitted, the trial would have been further delayed because the amendments would
have triggered demurrers by the new defendants, additional written discovery, possibly
depositions, and a new summary judgment motion (which defendants stated in the trial
court they would have filed). The trial court acts within its discretion in denying leave to
file an amended complaint, where the amendment would change the complexity of the
case, require additional depositions and discovery, thereby extending the trial date.
(M&F Fishing, Inc. v. Sea-Pac Ins. Managers, Inc. (2012) 202 Cal. App. 4th 1509, 1536.)
                                              III
                      The Trial Court Acted Within Its Discretion In
                    Partially Denying Pendola’s Motion To Tax Costs
       The trial court here partially denied and partially granted Pendola’s motion to tax
costs. As is relevant here, the trial court denied Pendola’s motion to tax as it related to:
(1) $500 for the motion to allow attorney Kim DeShano to appear pro hac vice7;
(2) $7,162.25 for travel expenses for various depositions that occurred in Sacramento;
and (3) mediator fees of $1,575 and travel expenses for the mediation of $4,090.79.
Pendola contends the trial court erred in denying its motion to tax costs with respect to
these three items. We disagree.
       “Except as otherwise expressly provided by statute, a prevailing party is entitled as
a matter of right to recover costs in any action or proceeding.” (Code Civ. Proc. § 1032,
subd. (b).) “Any award of costs shall be subject to the following: ¶] . . . Allowable costs
shall be reasonably necessary to the conduct of the litigation rather than merely

7      “Pro hac vice” means “[f]or this occasion or particular purpose” and typically
“refers to a lawyer who has not been admitted to practice in a particular jurisdiction but
who is admitted there temporarily for the purpose of conducting a particular case.”
(Black’s Law Dict. (9th ed. 2009) p. 1331, col. 1.)

                                              32
convenient or beneficial to its preparation.” (Code Civ. Proc., § 1033.5 , subd. (c)(2).)
“ ‘Whether a cost item was reasonably necessary to the litigation presents a question of
fact for the trial court and its decision is reviewed for abuse of discretion.’ ” (Acosta v. SI
Corp. (2005) 129 Cal. App. 4th 1370, 1380.)
       Pendola contends as to all three, the “costs [we]re not reasonable under the
circumstances” (although Pendola fails to articulate why). There was no abuse of
discretion in the trial court finding otherwise.
       As to (1), $500 for the motion to allow attorney DeShano to appear pro hac vice,
attorney DeShano was one of defendants’ long-standing attorneys, litigating on their
behalf for 10 years. The only local Sacramento attorney who did a lot of work on the
case was a second-year associate on the case, who needed DeShano’s competence to
defend a case that Pendola now valued at over $10 million.
       As to (2), $7,162.25 for travel expenses for various depositions that occurred in
Sacramento, the trial court found that “[t]he travel costs for additional out-of-state
attorneys were reasonably necessary to defend this action.” As noted, the local attorney
was much less experienced than DeShano. And, the other out-of-state attorney (Rita
Alliss Powers) had represented defendants for over 15 years. Defendants submitted
invoices for the airline fees, which included using the “[b]ase fare” on the airfare, limited
taxicab service, and hotels such as the Embassy Suites. No abuse of discretion appears as
to this item either.
       Finally, as to (3), the mediator fees of $1,575 and travel expenses for the
mediation of $4,090.79, there was no abuse of discretion there, as well. As to the
mediator fees and the travel expenses for the mediation, the trial court ruled that “[w]hile
such fees are discretionary under Code of Civil Procedure § 1033.5(c)(4), the court
determines the fees were material to the litigation.” Defendants presented evidence that
after they filed their motion for summary judgment on November 1, 2012, the parties
agreed to participate in voluntary mediation. Two weeks before the mediation was when

                                              33
Pendola filed its motion for leave to file a third amended complaint that added seven new
defendants and three claims and almost tripled the monetary demand in the complaint to
over $10 million. “Based on these new claims, Pendola entered the mediation with a
significantly inflated damage calculation and settlement demand.” As a result,
“[d]efendant’s counsel from Chicago came to the mediation along with four corporate
representatives, three of whom traveled from the East Coast.” Given the manner in
which Pendola unexpectedly at the last minute upped the stakes of the litigation, the trial
court acted within its discretion in determining that defendants’ response in increasing the
number of representatives it had at the mediation was reasonably necessary.
                                      DISPOSITION
       The judgment is affirmed. Defendants shall recover their costs on appeal. (Cal.
Rules of Court, rule 8.278(a)(1).)

                                                        ROBIE                 , Acting P. J.

We concur:

      MAURO                 , J.

      HOCH                  , J.

                                            34