Cal. Civ. P. Code § 428.50. Failure to file a timely cross-complaint results in a waiver and bar of that cause of action unless the trial court grants the defendant leave to file an untimely cross-complaint pursuant to § 426.50. See Carroll v. Import Motors, Inc., 33 Cal.App.4th 1429, 39 Cal.Rptr.2d 791, 795 (1995); Gherman v. Colburn, 72 Cal.App.3d 544, 140 Cal.Rptr. 330, 339 (1977). Upon the defendant's motion, the trial court must grant leave to file an untimely cross-complaint if the defendant can demonstrate that his failure to plead was in good faith.
The compulsory cross-complaint statute is designed to prevent "piecemeal litigation." ( Carroll v. Import Motors, Inc. (1995) 33 Cal.App.4th 1429, 1436, 39 Cal.Rptr.2d 791 ( Carroll ).) "The law abhors a multiplicity of actions, and the obvious intent of the Legislature in enacting the counterclaim statutes [citation] was to provide for the settlement, in a single action, of all conflicting claims between the parties arising out of the same transaction. [Citation.] Thus, a party cannot by negligence or design withhold issues and litigate them in successive actions; he may not split his demands or defenses; he may not submit his case in piecemeal fashion."
We therefore conclude that the trial court did not err by granting the motion to strike appellant's dissolution petition under Code of Civil Procedure section 436, subdivision (b). ( Carroll v. Import Motors, Inc. (1995) 33 Cal.App.4th 1429, 1437 [ 39 Cal.Rptr.2d 791]; Lodi v. Lodi, supra, 173 Cal.App.3d 628, 631.) III.
The trial court followed Carroll v. Import Motors, Inc. (1995) 33 Cal.App.4th 1429 (Carroll) in reaching this conclusion. Like Arrendando, the plaintiff in Carroll voluntarily dismissed his original complaint for contract rescission after the defendants filed cross-complaints for breach of contract arising out of the same underlying automobile trade-in transaction.
California's compulsory cross-complaint rule prohibits a party from asserting a claim in a new lawsuit if, at the time the party answered a complaint in prior litigation, it "fail[ed] to allege in a cross-complaint any [then-existing,] related cause of action." (§ 426.30, subd. (a); Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 952 (Align Technology).) The rule "is designed to prevent 'piecemeal litigation,'" because the "'law abhors a multiplicity of actions.'" (Align Technology, at p. 959; Carroll v. Import Motors, Inc. (1995) 33 Cal.App.4th 1429, 1436 (Carroll); Heshejin v. Rostami (2020) 54 Cal.App.5th 984, 993.) The rule operates as an affirmative defense and completely disposes of a claim or entire action to which it applies.
As such, it had to be filed in the action initiated by Contractor to avoid multiplicity of litigation. (§ 426.30; 5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 1177, pp. 607-609; see Carroll v. Import Motors, Inc. (1995) 33 Cal.App.4th 1429, 1437 (Carroll).)When Homeowners dismissed their cross-complaint, the only action in which they could file the second cross-complaint was the action initiated by Contractor. (Cf. Carroll, supra, 33 Cal.App.4th at pp. 1436-1437 [plaintiff voluntarily dismissed his complaint after cross-complaint was filed; court held he could not file new action, but should have filed a compulsory cross-complaint in the initial action]; Hill v. City ofClovis (1998) 63 Cal.App.4th 434, 445 [compulsory cross-complaint is "required to be brought and adjudicated in the action initiated by the plaintiff'].)
The compulsory cross-complaint statute is designed to prevent "piecemeal litigation." ( Carroll v. Import Motors, Inc. (1995) 33 Cal.App.4th 1429, 1436 [ 39 Cal.Rptr.2d 791].) In discussing the legislative purpose of former section 439, the predecessor of section 426.30, the Supreme Court explained that because "[t]he law abhors a multiplicity of actions . . . the obvious intent of the Legislature . . . was to provide for the settlement, in a single action, of all conflicting claims between the parties arising out of the same transaction. [Citation.] Thus, a party cannot by negligence or design withhold issues and litigate them in successive actions; he may not split his demands or defenses; he may not submit his case in piecemeal fashion.
Global Reach also argues that if BIC defeats the separate action brought by GRC to collect on the notes, it can claim all its fees, including those it incurred in securing the dismissal of this case. But there is no assurance that BICs efforts in this case will be considered to have been necessarily incurred in a successful defense of the action brought by GRC. (See Carroll v. Import Motors, Inc. (1995) 33 Cal.App.4th 1429, 1437-1439.) Civil Code section 1717 provides "the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract," and directs the trial court to "determine who is the party prevailing on the contract for purposes of this section, whether or not the suit proceeds to final judgment."
By failing to prosecute these causes of action via cross-complaint in SC083493, Chao forfeited them. Code of Civil Procedure section 426.30; Carroll v. Import Motors[, Inc.] (1995) 33 Cal.App.4th 1429, 1435-38.”
The compulsory cross-complaint requirement reflects “the strict policy against multiplicity of litigation” and prohibits “piecemeal litigation.” (Carroll v. Import Motors, Inc. (1995) 33 Cal.App.4th 1429, 1435, 1436 (Carroll).) Section 426.30, subdivision (a), provides, “if a party against whom a complaint has been filed and served fails to allege in a cross-complaint any related cause of action which (at the time of serving his answer to the complaint) he has against the plaintiff, such party may not thereafter in any other action assert against the plaintiff the related cause of action not pleaded.”