KTDA III Associates v. Just Mortgage
Filed 5/9/13 KTDA III Associates v. Just Mortgage CA2/2
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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115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
SECOND
APPELLATE DISTRICT
DIVISION
TWO
KTDA III ASSOCIATES,
Plaintiff and Appellant,
v.
JUST MORTGAGE, INC.,
Defendant and Respondent.
B240153
(Los Angeles
County
Super. Ct.
No. BC410821)
APPEAL from
a judgment of the Superior Court
of
County. Amy D. Hogue,
Judge. Affirmed.
Arthur D.
Hodge for Plaintiff and Appellant.
Cho,
Sheasby, Chung & Ignacio and Eric N. Chung for Defendant and Respondent.
* * * * * *
Appellant
KTDA III Associates, LLC (KTDA) contends the trial court erred in denying its
application for leave to file a third
amended complaint. It further
contends the trial court abused its discretion in awarding expert fees as costs
pursuant to Code of Civil Procedure section 998 since no expert witnesses
testified at trial. For the reasons
discussed, we disagree. Accordingly, we
affirm the judgment.
FACTUAL AND PROCEDURAL HISTORY
KTDA owned properties located at 10514
Kalmia Street (the 10514 property) and 10516
Kalmia Street (the 10516 property) in Los
Angeles. The
10514 property was a rental property occupied by a tenant. In January 2007, KTDA sold the
10516 property to Gladys Flores (Flores) who is not
a party to this appeal. To obtain funds
to purchase the 10516 property, Flores executed a
promissory note payable to respondent Just Mortgage, Inc. (JMI). JMI recorded a first and second deed of trust
against the property to secure the loan.
However, the deed to the 10516 property listed the legal description of
the 10514 property. Flores
took possession of the 10516 property.
In August 2007, KTDA discovered
that although it had sold the 10516 property to Flores,
the recorded deed had the legal description of the 10514 property. To correct the error, on August 30, 2007, KTDA recorded a corrective deed
whereby the legal description of the 10516 property was substituted in place of
the legal description of the 10514 property.
Flores
defaulted on the loan. On April 15, 2008, JMI initiated
foreclosure proceedings and recorded a notice of default listing the 10514
property and not the 10516 property.
On July 25, 2008, KTDA demanded that notice of default be
corrected to reflect the 10516 property.
On February 23, 2009,
the foreclosure sale took place and J.P. Morgan purchased the property. On March
10, 2009, J.P. Morgan evicted the tenant occupying the 10514
property.
A complaint was filed on March 30, 2009. The operative second amended complaint was
filed by KTDA on October 13, 2009. The second amended complaint alleges causes
of action for declaratory relief against J.P. Morgan and for reformation
against JMI.
KTDA filed a separate action
against Del Sol Escrow. On August 11, 2010 that lawsuit was
consolidated with this action. On August 12, 2010, JMI served KTDA with
a statutory offer to compromise pursuant to Code of Civil Procedure
section 998. KTDA never accepted
JMI’s offer to compromise. JMI filed its
answer to the second amended complaint on November 12, 2009.
An ex parte application of JMI to file a cross-complaint against Del Sol
Escrow was granted and JMI filed the cross-complaint on November 30, 2009.
In January 2011, the attorneys for
KTDA and JMI discussed the filing of a third amended complaint. Before the meet and confer process was
completed, Del Sol Escrow filed for bankruptcy protection. A notice of automatic stay was filed on March 2, 2011. The bankruptcy stay was vacated in August
2011. After the stay was vacated, Del
Sol Escrow did not participate in the litigation. Trial was scheduled for October 28, 2011.
On September 28, 2011, one month before trial, KTDA filed an
ex parte application seeking leave to file a third amended complaint. In addition to the causes of action for
declaratory relief and reformation, KTDA sought to allege causes of action for
slander of title against JMI and J.P. Morgan, and trespass against JMI. The proposed third amended complaint sought
monetary and punitive damages. JMI
opposed the ex parte application.
The trial court denied KTDA’s application on October 18, 2011.
On October 28, 2011, when the parties appeared and announced
they were ready for trial, KTDA informed the trial court that it had resolved
its claims against J.P. Morgan. Under
the settlement, J.P. Morgan was to retain title to the 10514 property and was
to pay KTDA an undisclosed sum of money.
KTDA also informed the trial court that a new lawsuit alleging slander
of title had been filed.
After hearing the evidence in a
reform the deed of trust finding that the foreclosure sale extinguished the
deed of trust that KTDA sought to reform.
Judgment in favor of JMI was entered on December 28, 2011.
JMI moved for costs including its expert fees in the amount of
$2,026.65. KTDA moved to tax costs. On January
25, 2012, the trial court awarded JMI $3,579.75, including
$2,026.65 as expert fees.
DISCUSSION
Denial
of Leave of Court to File a Third Amended Complaint.
KTDA contends that the trial
court’s denial of leave of court permitting KTDA to file a third amended
complaint to add damages causes of action for slander of title against JMI was
not supported by substantial evidence of bad faith.
The standard of review of denial of an application for
leave to file an amended complaint is abuse of discretion. “‘The court may, in furtherance of justice,
and on any terms as may be proper, allow a party to amend any pleading or proceeding
by adding or striking out the name of any party . . . .’ (Code Civ. Proc., § 473, subd. (a)(1).) ‘“Leave to amend a complaint is thus
entrusted to the sound discretion of the trial court. ‘. . . The exercise of that
discretion will not be disturbed on appeal absent a clear showing of
abuse. More importantly, the
discretion to be exercised is that of the trial court, not that of the
reviewing court. Thus, even if the
reviewing court might have ruled otherwise in the first instance, the trial
court’s order will . . . not be reversed unless, as a matter of
law, it is not supported by the record.’â€
[Citations.]’ (Branick v.
Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.)†(M&F
Fishing, Inc. v. Sea-Pac Ins.
Managers, Inc. (2012) 202 Cal.App.4th 1509, 1534.)
In denying the application, the
trial court stated that the claims asserted in the proposed third amended
complaint against J.P. Morgan and JMI would not have been stayed by Del Sol
Escrow’s bankruptcy. The trial court
found that the delay in bringing the application was substantial, that it was
untimely and that there was no good reason for the untimeliness. The trial court also found that the new
issues raised in the proposed third amended complaint would require additional
discovery and that permitting such amendments on the eve of trial would not be
fair.
KTDA knew of the alleged error in
the deed of trust as early as August 2007 when it caused a corrective deed to
be recorded. However, it did not seek
leave to amend to state a cause of action for slander of title until September
28, 2011. “Although pleadings may be
amended at any stage of the litigation (Moss Estate Co. v. Adler (1953)
41 Cal.2d 581, 585–586; Record v. Reason (1999) 73 Cal.App.4th 472,
486), if a party seeking amendment has been dilatory and/or the delay has
prejudiced or will prejudice the opposing party, the trial court in its
discretion may deny leave to amend. (See
Solit v. Tokai Bank (1999) 68 Cal.App.4th 1435, 1448.)†(M&F
Fishing, Inc. v. Sea-Pac Ins. Managers,
Inc., supra, 202 Cal.App.4th at p. 1534.)
We find the trial court did not
abuse its discretion in denying KTDA leave to file a third amended complaint.
Award
of Expert Witness Fees as Costs.
KTDA contends that the trial court abused its discretion in
awarding expert fees to JMI since no expert witnesses testified at trial. KTDA claims there is no authority for such an
award. We disagree with KTDA’s
contention. “Section 998 states that
fees for expert witnesses ‘actually incurred and reasonably necessary in
. . . preparation for trial’ are recoverable. (§ 998, subd. (c)(1).) Although the statute refers to expert
witnesses, courts have recognized that ‘section 998 . . . covers
the cost of experts who aid in the preparation of the case for trial, even if
they do not actually testify.’ (Santantonio
v. Westinghouse Broadcasting Co., supra, 25 Cal.App.4th at p. 124.)†Bates
v. Presbyterian Intercommunity
Hospital, Inc. (2012) 204 Cal.App.4th 210, 222.)
We find there was no error by the trial court in awarding
expert witness fees.
>
DISPOSITION
The judgment is
affirmed. JMI is entitled to its costs
on appeal.
NOT
TO BE PUBLISHED IN THE OFFICIAL REPORTS.
_____________________, J.
FERNS
We concur:
____________________________,
P. J.
BOREN
____________________________,
J.
ASHMANN-GERST
of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
