Court Opinion

ID: 9729896
Source: CourtListenerOpinion
Date Created: 2023-08-26 14:51:52.545756+00
Date Added: 2024-06-11T18:26:02.056716
License: Public Domain

DALSIMER, J.
I respectfully dissent.
*499I agree with the majority that the primary purpose of this appeal was to secure a review of the order denying defendants’ motion for leave to file a fourth amended cross-complaint.
The law is clear that an order denying a motion for leave to file an amended cross-complaint, being an intermediate order, is not appealable. (Central Bank v. Transamerica Title Ins. Co. (1978) 85 Cal.App.3d 859, 870 [149 Cal.Rptr. 822].) Such an order is subject to review upon application for an extraordinary writ (Foot’s Transfer & Storage Co. v. Superior Court (1980) 114 Cal.App.3d 897 [171 Cal.Rptr. 1]) or after final judgment. (Grimshaw v. Ford Motor Co. (1981) 119 Cal.App.3d 757, 824 [174 Cal.Rptr. 348]; Schaefer v. Berinstein (1960) 180 Cal.App.2d 107, 114 [4 Cal.Rptr. 236], disapproved on other grounds in Jefferson v. J. E. French Co. (1960) 54 Cal.2d 717 [7 Cal.Rptr. 899, 355 P.2d 643].) The review after final judgment is restricted to those intermediate rulings, orders, or decisions which involve “the merits or necessarily affects the judgment or order appealed from or which substantially affects the rights of a party . . . .” (Code Civ. Proc., § 906.) The majority holds that the order denying defendants’ motion for leave to file a fourth amended cross-complaint did not substantially affect the rights of defendants.
On the contrary, defendants’ rights were substantially affected in this case. As the causes of action contained in defendants’ proposed fourth amended cross-complaint arose out of the same transaction (the granting of the loan) that gave rise to plaintiff’s complaint (the liability of defendants as individual guarantors on the loan), those causes of action had to be pled in the action or be deemed waived. (Code Civ. Proc., § 426.30, subd. (a); Western Decor & Furnishings Industries, Inc. v. Bank of America (1979) 91 Cal.App.3d 293, 310 [154 Cal.Rptr. 287].) The majority’s position that a cross-complaint is “procedurally” a separate pleading representing a separate cause of action is technically correct, but I respectfully submit that it begs the question. The question we deal with concerns the propriety of denying the motion to file the cross-complaint, not the procedural status of the pleading once filed. Had the court followed Code of Civil Procedure section 426.50, it could have dealt as it did with the complaint but not wreak havoc on the defendant’s cause of action. As defendants were not permitted to amend, they have effectively lost their right to litigate their claims if the judgment is allowed to stand. This was certainly a substantial effect.
Code of Civil Procedure section 426.50 in pertinent part states: “The court, after notice to the adverse party, shall grant, upon such terms as may be just to the parties, leave to amend the pleading, or to file the cross-complaint, to assert such cause if the party who failed to plead the cause acted in good faith. This subdivision shall be liberally construed to avoid forfeiture of causes of action. ” (Italics added.) This section has been interpreted to mean that a trial court has *500only “some modicum of discretion in determining whether or not a defendant has acted in good faith” (Gherman v. Colburn (1977) 72 Cal.App.3d 544, 559 [140 Cal.Rptr. 330]) and that the principle of liberality contained in the code section “requires that a strong showing of bad faith be made in order to support a denial of the right to file a cross-complaint under this section.” (Foot’s Transfer & Storage Co. v. Superior Court, supra, 114 Cal.App.3d 897, 902.) Nothing in the record before us supports a conclusion that defendants in this case acted in bad faith. Although their motion to amend their cross-complaint may not have been overly prompt, mere “negligence” is not sufficient grounds for denial of their motion. (Code Civ. Proc., § 426.50.)
The majority is concerned that it would be improper to reverse the trial court because the cross-complaint was directed not only against plaintiff but also against several codefendants who are not parties to this appeal. In support of this proposition the majority cites Gonzales v. R. J. Novick Constr. Co. (1978) 20 Cal.3d 798, 806 [144 Cal.Rptr. 408, 575 P.2d 1190], which in turn cited American Enterprise, Inc. v. Van Winkle (1952) 39 Cal.2d 210, 213 [246 P.2d 935]. In both of these cases the court held it would not review those portions of a final judgment that involved parties who were not parties to the appeal. In this case, although review came by way of final judgment, the review sought was of an intermediate order. Since an intermediate order is not a final judgment, it cannot be said that the review of such an order might be detrimental to persons whose rights had been secured by the final judgment. The order denying defendants’ motion for leave to amend their cross-complaint could be reviewed, even reversed, without disturbing the final judgment. If that order were to be reversed, the final judgment which granted plaintiff’s motion for summary judgment as to the liability of defendants as individual guarantors on the loan would remain as an issue without substantial controversy. The issues raised by defendants in their proposed cross-complaint could then be litigated separately. Further, it appears from the clerk’s transcript that the other parties below were served with the notice of appeal as well as with the briefs in the appeal, and they have had the opportunity to appear in this court.
I would reverse the judgment and remand to the trial court with directions to order that there is no substantial controversy regarding the issues in the complaint and to permit the filing of the proposed cross-complaint.
A petition for a rehearing was denied May 26, 1983, and appellants’ petition for a hearing by the Supreme Court was denied August 18, 1983. Kaus, J., did not participate therein. Bird, C. J., and Reynoso, J., were of the opinion that the petition should be granted.