Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County No. BC371117, Kevin Brazile, Judge.
Goodman, Sheridan & Roff, Nathan J. Sheridan, Kevin J. Griffith and Dayna C. Carter for Plaintiff and Appellant.
Hoefflin & Associates, Richard M. Hoefflin and Jason M. Burrows for Defendant and Respondent.
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
I. INTRODUCTION
Plaintiff, Wallena Hayes (“plaintiff”), appeals from a summary judgment entered in favor of defendant, Metrocities Mortgage LLC, doing business as No Red Tape Mortgage (“Metrocities”), on her complaint for alleged fraudulent conduct surrounding the financing for two real property purchases made by plaintiff. The appeal does not address the merits of the summary judgment. Rather, plaintiff contends the trial court committed reversible error earlier in the proceedings by granting plaintiff’s motion for judgment on the pleadings and allowing Metrocities leave to amend its unverified answer with a verified answer. As an alternative claim, plaintiff asserts the trial court erred in considering defendant’s summary judgment which had been rendered moot by the defective answer. Because plaintiff has failed to establish an abuse of discretion in allowing defendant leave to file the verified answer, we affirm the judgment.
II. BACKGROUND
On May 16, 2007, plaintiff filed an unverified complaint which contained the following causes of action: fraud (first); damages under Code of Civil Procedure section 1029.8 (second); constructive trust and accounting (third), fiduciary breach (fourth); declaratory relief (fifth); and quiet title (sixth). The complaint alleged that defendant, Derrick Michael Wade, who misrepresented that he was a licensed real estate agent, assisted plaintiff in the purchase of a residential property and an investment property. Mr. Wade also allegedly misrepresented the terms of the loan and condition of the investment property to plaintiff. Metrocities is alleged to have purchased and attempted to enforce the loans with knowledge of Mr. Wade’s fraudulent conduct. Defendant and other named parties demurred to the original complaint. One defendant asserted that plaintiff had failed to verify the original complaint.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
On September 17, 2007, prior to the hearing on the demurrers to the original complaint, plaintiff filed a verified first amended complaint. The first amended complaint contained claims for: fiduciary breach (first); breach of implied covenant of good faith and fair dealing (second); fraud (third); violation of “The Truth in Lending Act” (15 U.S.C. § 1601 et seq. (fourth); violation of the “Real Estate Settlement Procedures Act of 1974” (12 U.S.C. § 2601 et seq.) (fifth); injunctive relief (sixth) and quiet title (seventh). The second, third, fourth and fifth causes of action were directed against Metrocities. The verified first amended complaint alleged that plaintiff purchased the investment property in February 2006 and the residential property in 2006. Metrocities is alleged to have funded a loan on the residential property. No allegations are made against Metrocities in connection with the investment property. Plaintiff alleged that she was not given written disclosures or good faith estimates, disclosure documents or a Uniform Settlement Statement required by federal law.
On October 17, 2007, Metrocities filed a demurrer to the four causes of action asserted against it in the first amended complaint. On November 21, 2007, the trial court sustained without leave to amend demurrers to the causes of action for breach of implied covenant of good faith and fair dealing (second) and “Real Estate Settlement Procedures Act of 1974” violations (fifth). The trial court overruled demurrers to the fraud (third) and “The Truth in Lending Act” violations (15 U.S.C. § 1601 et seq. (fourth)). Defendants were given 10 days to answer the verified first amended complaint. On December 7, 2007, Metrocities filed an unverified answer to the verified first amended complaint. The answer generally and specifically denied the allegations of the verified first amended complaint and asserted 17 affirmative defenses.
On December 20, 2007, plaintiff moved for reconsideration of the trial court’s ruling sustaining demurrers to the verified first amended complaint without leave to amend. On February 19, 2008, the trial court denied plaintiff’s reconsideration motion.
On April 11, 2008, plaintiff filed a judgment on the pleadings motion against Metrocities and two other named defendants, HSBC Mortgage Services and New York Financial, Inc. The motion was brought on the ground these three defendants filed general denials and affirmative defenses rather than verified answers to the verified first amended complaint. Relying principally on Pico v. Colimas (1867) 32 Cal. 578 and section 431.30, subdivision (d), plaintiff argued the general denials were admissions to all the allegations in the verified first amended complaint. The matter was set for hearing on May 14, 2008.
One of the named defendants, New York Financial, filed opposition to the motion for judgment on the pleadings. The opposition asserted: plaintiff failed to object to its answer on the ground it was unverified; amended answers could be filed as a matter of right prior to a hearing on a judgment on the pleadings; or leave to amend should be granted under section 473 for excusable neglect and lack of prejudice.
On May 1, 2008, rather than filing an opposition to the judgment on the pleading motion, Metrocities filed a “Notice of Intent to File Verified First Amended Answer....” The notice argued section 472 authorized the amendment without leave of court. Metrocities filed the verified first amended answer on the same date.
Also on May 1, 2008, defendant, HSBC, filed its own judgment on the pleading motion against plaintiff. HSBC’s motion was made on the ground the fourth cause of action for violation of the Truth in Lending Act was time barred. Metrocities filed a notice of joinder in HSBC’s judgment of the pleadings motion on May 2, 2008.
On May 5, 2008, plaintiff objected to Metrocities’ notice of intent to file an amended verified answer on the grounds: the time to file an amended answer had run; the parties had not stipulated to an amendment; and leave of court was required to file the amendment. On May 6, 2008, plaintiff filed a motion to strike Metrocities’ verified first amended answer on the same grounds. The motion to strike was set for hearing on June 11, 2008.
On May 14, 2008, the trial court granted plaintiff’s judgment on the pleading motion with leave to amend. Defendants were given 30 days leave to file amended answers. At the hearing, the trial court noted that defendants had filed verified answers. Plaintiff objected to the sufficiency of the answers. The trial court then invited plaintiff to file a motion to strike to challenge the sufficiency of the pleadings. Plaintiff’s counsel, Nathan Sheridan, indicated that plaintiff had already filed a motion to strike Metrocities’ verified first amended answer. On May 23, 2008, plaintiff filed a notice that the motion to strike Metrocities’ verified first amended answer (which was set for hearing on June 11, 2008) had been taken off calendar. The record does not show that plaintiff ever renewed her motion to strike Metrocities’ verified first amended answer.
On May 27, 2008, the trial court granted HSBC’s judgment on the pleading motion (joined by Metrocities). Plaintiff was given 20 days leave to amend. On June 12, 2008, plaintiff filed a verified second amended complaint.
On June 17, 2008, the trial court entered an order on its ruling granting plaintiff’s judgment on the pleadings with leave to amend. The trial court found that verified answers had already been filed.
On September 2, 2008, the trial court granted Metrocities’ motion to strike portions of plaintiff’s second amended complaint. On October 2, 2008, Metrocities filed a verified answer to the second amended complaint.
On September 9, 2008, Metrocities filed a summary judgment motion. On December 17, 2008, the trial court granted the summary judgment motion in favor of Metrocities. The trial court entered judgment on January 21, 2009. This timely appeal followed.
III. DISCUSSION
As previously noted, plaintiff has not addressed the merits of the summary judgment entered against her. Rather, she challenges the trial court’s order granting her judgment on the pleading motion with leave to amend. It is well established that permitting or refusing an amendment of a pleading lies within the sound discretion of the trial court. (See Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242; Security T. & S. Bk. v. Fidelity & D. Co. (1920) 184 Cal. 173, 176-177; Walsh v. McKeen (1888) 75 Cal. 519, 521-522; Central Concrete Supply Co., Inc. v. Bursak (2010) 182 Cal.App.4th 1092, 1102.) Under this liberal standard, amendments are permitted at any stage of the proceedings when such an amendment is not prejudicial to the opposing side. (See McCoy v. Gustafson (2009) 180 Cal.App.4th 56, 102; Garcia v. Roberts (2009) 173 Cal.App.4th 900, 909-910; Melican v. Regents of University of California (2007) 151 Cal.App.4th 168, 175; Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 488-489.) Furthermore, a trial court may abuse its discretion by denying leave to amend where the opposing party has not been misled or prejudiced. (Thompson Pacific Const., Inc. v. City of Sunnyvale (2007) 155 Cal.App.4th 525, 544-545; Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761.) The party challenging the amendment has the burden of demonstrating the trial court abused its discretion. (Fogel v. Farmers Group, Inc. (2008) 160 Cal.App.4th 1403, 1423-1424; Berman v. Bromberg (1997) 56 Cal.App.4th 936, 945.)
Here, the challenged amendment was allowed after the trial court granted plaintiff’s judgment on the pleading motion, which had been based on the failure to verify the answer. A similar issue was raised in Jenssen v. R.K.O. Studios, Inc. (1937) 20 Cal.App.2d 705, which considered whether the trial court had properly granted leave to defendants to file verified answers after denying a plaintiff’s judgment on the pleadings motion. (Id. at pp. 706-707.) Jenssen explained: “The court having permitted the filing of amended answers, and the defendants having availed themselves of the permission so granted, the sufficiency of the original pleadings is not involved here. If error was committed, that error was not in the decision of the motion for judgment, but on the action of the court on the application to amend. [Citation.] [¶] The permitting or refusing of amendments to pleadings is a matter within the sound discretion of the trial court, which should be liberally exercised. This discretion will rarely be revised, and then only for a gross abuse which must clearly appear. [Citation.] Conceding the insufficiency of the verifications of the original answers, there existed a failure to deny, and therefore an admission of, the allegations of the complaint. [Citations.] This amounted to no more than a defect in pleading. Proper verification was not a jurisdictional requirement, and might have been waived. [Citation.] An amendment may be properly allowed at the time of trial in the absence of a showing of prejudice to the adverse party. [Citation.]” (Id. at pp. 707-708.) Even where verification of a pleading is required by statute, failure to verify is merely a defect curable by amendment. (United Farm Workers of America v. Agricultural Labor Relations Bd. (1985) 37 Cal.3d 912, 915.) Furthermore, the failure to verify is not jurisdictional and may be cured by amendment at the time of trial in the absence of prejudice. (Ibid.; see also In re Marriage of Melton (1994) 28 Cal.App.4th 931, 939-940 [lack of proper verification is defect which may be waived]; Zavala v. Board of Trustees (1993) 16 Cal.App.4th 1755, 1760-1761 [failure to verify answer should be asserted by motion to strike and is subject to waiver]; Perlman v. Municipal Court (1979) 99 Cal.App.3d 568, 574-575 [insufficiency of pleadings due to failure to supply a proper verification is properly raised by motion to strike which upon timely notice requires hearing and extension of time to answer; any procedural defects can be readily cured by amendment]; Franchise Tax Bd. v. Municipal Court (1975) 45 Cal.App.3d 377, 383-384 [court does not lack jurisdiction to render a judgment when pleading lacking a requisite verification was cured by permission of court to include a verification]; Ware v. Stafford (1962) 206 Cal.App.2d 232, 237 [failure to verify does not deprive the court of jurisdiction to hear the merits; rather, defect may be cured by amendment even though the time to file has expired]; Jenssen v. R.K.O. Studios, Inc., supra, 20 Cal.App.2d at pp. 707-708 [failure to verify is curable by amendment at any time including during trial].)
Under these standards, the trial court acted well within its discretion to allow Metrocities to file the amended verified answer. The only issue here was a failure to verify which was a “defect in pleading.” Such a defect is curable by amendment, subject to waiver and not jurisdictional. The trial court allowed Metrocities to cure the defect by filing an amended pleading. Indeed, the failure to grant leave to amend to file the verified answer would have been an abuse of discretion under the circumstances of this case. (Fogel v. Farmers Group, Inc., supra, 160 Cal.App.4th at pp. 1423-1424; Berman v. Bromberg, supra, 56 Cal.App.4th at p. 945; Jenssen v. R.K.O. Studios, Inc., supra, 20 Cal.App.2d at pp. 707-708.) This is because plaintiff cannot assert any prejudice from allowing the amendment. As the record shows, Metrocities was allowed to amend its answer after plaintiff filed a judgment on the pleadings motion which was granted with leave to amend. Thus, the matter was still within the pleading stages when plaintiff raised the verification issue. Furthermore, plaintiff had initially filed a motion to strike the verified answer to the first amendment complaint. However, she subsequently took the motion off calendar and did not renew her objections based on the effect of the prior general denial. Even after plaintiff’s judgment on the pleadings motion was granted, plaintiff’s own pleading at the time, (the first amended verified complaint) was found to be deficient. Thereafter, the trial court granted judgment on pleadings against plaintiff on her first amended complaint. Plaintiff was granted leave to file a second amended complaint. Metrocities filed a verified answer to plaintiff’s second amended complaint. Plaintiff did not renew her objections to the verification. These facts lead to the inescapable conclusion that plaintiff was not prejudiced by the trial court’s ruling, which allowed the verified answer to the first amended complaint to be filed. Thus, plaintiff has not established an abuse of discretion in allowing Metrocities to amend its unverified original answer.
Moreover, we are not persuaded by plaintiff’s contention Pico v. Colimas, supra, 32 Cal. 578, nor any other authorities cited by plaintiff requires a different result. We note only that Pico concluded that the general denial in the answer was an admission to a verified trespass action. (Id. at p. 580.) However, Pico did not discuss the trial court’s ability to allow an amendment to cure the defect under liberal pleading standards. In any event, on remand the trial court was directed to conduct a new trial “with leave to the defendants to amend their answer.” (Id. at p. 582.) Thus, plaintiff has not demonstrated any reason to set aside the judgment in this case.
IV. DISPOSITION
The judgment is affirmed. Defendant Metrocities Mortgage, LLC, doing business as No Red Tape Mortgage is awarded its costs on appeal.
We concur: ARMSTRONG, ACTING P. J., MOSK, J.