Opinion
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. No. CV805958
Bamattre-Manoukian, J.
I. INTRODUCTION
Plaintiff Jim Khosh appeals from a judgment of nonsuit in favor of defendants Kevin Le and Neelakantarao (Shiva) Dantu. (Code Civ. Proc., § 581c.) Plaintiff contends that the trial court erred in denying his motion for leave to amend, which he filed in opposition to the motion for nonsuit. He argues that the granting of his motion for leave to amend would have required the court to deny defendants’ motion for nonsuit.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
For reasons that we will explain, we conclude that the trial court did not abuse its discretion in denying plaintiff’s motion for leave to amend, and therefore we will affirm the judgment of nonsuit in favor of defendants.
II. FACTUAL AND PROCEDURAL BACKGROUND
Amended Complaint
Plaintiff filed this action on March 12, 2002, and on April 23, 2002, he filed a verified amended complaint against Kevin Le, Neelakantarao (Shiva) Dantu, and Quick Turn Circuit Link, Inc. (QTCL). According to the amended complaint, QTCL manufactured and produced computer circuit boards. Plaintiff Khosh, defendant Le, and defendant Dantu were officers and directors of QTCL, and plaintiff Khosh and defendant Le were the sole shareholders of QTCL.
In the first cause of action, plaintiff Khosh sought the removal of defendants Le and Dantu as officers and directors of QTCL. Plaintiff alleged that Le and Dantu “each in his capacities as an officer, director, and shareholder (in Mr. Le’s case), has, jointly and severally, breached his fiduciary duties toward QTCL and Plaintiff by fraudulently embezzling corporate funds for his personal use and benefit and by diverting money from the corporation, to the corporation’s detriment, or by ratifying the same misconduct, or by taking no action to stop the misconduct . . . .” Plaintiff asserted that if defendants Le and Dantu “are not removed as directors and officers, each’s [sic] continuing wrongful conduct will cause great and irreparable harm to QTCL, including causing the insolvency of the corporation.” Plaintiff also alleged that he was “excused from attempting to secure action by the board of directors to correct” defendants’ wrongful conduct because defendants “wrongfully asserted control of the board” and thus any effort by him to secure action would have been futile.
In the second cause of action, which incorporated the allegations from the first cause of action, plaintiff sought “monetary damages (in a sum in excess of the jurisdictional limit of this Court)” from defendants Le and Dantu for their “wrongful acts or omissions” as directors, officers, and as a shareholder (in Le’s case) of QTCL.
In the third cause of action, plaintiff sought an involuntary dissolution of QTCL.
In the fourth cause of action, plaintiff alleged that he entered into an agreement to lease equipment to QTCL, QTCL breached the agreement by failing to pay the monthly rental amounts, and he suffered damages of not less than $494,000, plus interest.
Although labeled as the “FIFTH” cause of action, plaintiff only alleges four causes of action in the amended complaint.
In the prayer for relief in the amended complaint, plaintiff sought damages “in a sum to be proved at trial but not less than $494,000” plus interest.
Appointment of Receiver
By “STIPULATED ORDER” filed August 9, 2002, the superior court “assume[d] jurisdiction over QTCL’s voluntary dissolution” and appointed a receiver to “direct and oversee the dissolution and winding-up of QTCL, including the liquidation of its assets.” Pursuant to the order, the receiver was to take immediate possession of QTCL’s premises and exclusive control over QTCL’s personal property; collect all QTCL accounts receivable; establish a bank account for all QTCL monies and funds collected; provide an inventory to the court of all QTCL property, accounts receivable, and accounts payable; and propose how “any monies remaining in the Receivership estate after payment of the Receiver’s fees, and administrative expenses, . . . should be distributed to QTCL’s creditors (the ‘Accounting’).” The order also provided that QTCL and its agents, including plaintiff Khosh and defendant Le, were not to transfer, remove, sell, or hypothecate any QTCL property without the receiver’s authorization. Further, the order stated that “[b]ased upon the stipulation” of plaintiff Khosh, defendant Le, and defendant QTCL, the case was “stayed until the Receiver files her Accounting . . . .”
Receiver’s “Final Report and Account”
In a “Final Report and Account” dated July 27, 2004, the receiver summarized the actions taken to “preserve the assets of the [receivership estate] and to wind down QTCL.” The receiver proposed a distribution scheme to settle the claims of QTCL’s creditors against assets of the receivership estate. The receiver also requested that the court authorize the dissolution of QTCL.
The proposed distribution scheme in the final report included the receiver’s recommendation regarding the resolution of claims asserted by plaintiff. The receiver stated that plaintiff, or entities under his control, had filed claims with the receiver totaling more than $3.2 million, alleging “unpaid rent, missing personal property, lost income, and personal loans to QTCL, among other things.” The receiver explained that if the claims were allowed, “a significant portion of funds held by the Estate would be paid to [plaintiff], leaving the remaining creditors with a distribution of less than one percent.” The receiver further explained that she had investigated plaintiff’s assertions that the receivership estate had claims against defendants Le and Dantu and others “based on, among other things, fraud.” The receiver concluded that “the cost to the Estate of pursuing claims against these entities likely would exceed the amount recoverable from these entities,” the “potential claims against these entities . . . are of little or no value to the Estate, and . . . [her] continued pursuit of these claims would prove to be an ‘unprofitable’ endeavor for the Estate.” The receiver stated that plaintiff had “expressed interest in acquiring the Estate’s claims” against defendant Le and Dantu and others “in satisfaction of [his] claims against the Estate.” The receiver recommended that the court allow her “to assign on behalf of the Estate, all of the Estate’s claims against” defendant Le and others, as consideration for a waiver of plaintiff’s claims “totaling approximately $3.2 million, filed in the Estate.”
Order of September 13, 2004, Authorizing Dissolution of QTCL
On September 13, 2004, the superior court issued an order regarding the receiver’s final report. Among other things, the court approved the receiver’s proposed transfer of “certain claims of the Receiver to [plaintiff] and related entities in consideration of [plaintiff’s] and related entities’ release of all right, title and interest in and to all claims against the Receiver . . . .” The court also ratified and approved the receiver’s conclusion that the transferred claims “are of no value to the Estate because in the Receiver’s estimation costs and expenses stemming from their continued pursuit would exceed any amount recoverable from these claims.” The court’s order indicated that the claims transferred to plaintiff included “all claims” against defendants Le and Dantu.
Except as provided in the September 13, 2004 order, the court released and discharged the receiver from all duties arising out of her appointment in the action. The court stated that “[t]he accounts of directors or such other persons shall be settled and they shall be discharged from their duties and liabilities to creditors and shareholders.” The court also declared that QTCL had been “duly wound up” and would be “deemed dissolved,” except as provided in the September 13, 2004 order.
Trial
The case was consolidated with several other cases, and a bench trial was scheduled for September 4, 2007. Before opening statements, the court and counsel had an in-chambers discussion regarding a motion for nonsuit in the consolidated cases by defendants.
On our own motion, we augment the record on appeal to include the parties’ stipulation and the superior court’s order filed August 6, 2002, consolidating for all purposes No. CV805958 (the case in the present appeal) and No. CV807585. (Cal. Rules of Court, rule 8.155(a)(1)(A).) These two cases were consolidated with several other cases for trial, based on the superior court’s order filed April 23, 2007, a copy of which is attached to supplemental briefing filed by defendants on December 8, 2008.
It is not clear from the record on appeal whether the in-chambers discussion was reported. No reporter’s transcript of the discussion is included in the record on appeal.
On September 4, 2007, plaintiff’s counsel gave his opening statement. Counsel stated that “[e]ssentially, this dispute arises as kind of a business divorce between two parties,” plaintiff Khosh and defendant Le. The business relationship between the parties began in 2000, when plaintiff Khosh and defendant Le reached an agreement in which they and their separate companies would contribute their assets into a newly formed company, QTCL.
Relevant here, plaintiff’s counsel stated in his opening statement that defendant Le engaged in work through his former company that should have been given to QTCL, diverted business opportunities of QTCL, and used QTCL “as his personal piggy bank.” After defendant Le fired plaintiff Khosh, litigation ensued. A preliminary injunction was issued, requiring, among other things, that defendant Dantu cosign all checks of QTCL in excess of $500. Defendant Le “issued” a series of checks, some of which were signed by defendant Dantu. The checks were for defendant Le’s personal expenses, or were payments to companies that were not customers of QTCL for transactions representing corporate opportunities that were “usurped” by defendant Le for the benefit of his former company. From January 5, 2001, to August 10, 2002, “improper checks totaling $850,282.47 were issued” by QTCL. “As a result of the embezzlement . . . and other shenanigans,” QTCL “was rendered valueless, resulting in the appointment of a receiver.” Further, defendant Le’s “corporate stock was worth zero as of June of 2002.” Plaintiff’s counsel explained that as a result of the receiver’s recommendation and the court’s approval of the assignment of corporate claims to plaintiff, plaintiff “is now personally the holder of what otherwise would be derivative claims” against defendants Le and Dantu and others. Plaintiff intended to show “how the company lost $975,000 in profit as a result of being taken advantage of” by defendants Le and Dantu.
Defendant’s Motion for Nonsuit
At the conclusion of plaintiff’s counsel’s opening statement, defense counsel made an oral motion for nonsuit under section 581c. Pursuant to the earlier, in-chambers discussion regarding the motion, a briefing schedule was set for the filing of written motion, opposition, and reply papers. The court stated that the trial would be continued until September 11, 2007, at which time it would rule on defendants’ motion for nonsuit.
Section 581c states in part: “(a) Only after, and not before, the plaintiff has completed his or her opening statement, or after the presentation of his or her evidence in a trial by jury, the defendant, without waiving his or her right to offer evidence in the event the motion is not granted, may move for a judgment of nonsuit. [¶] (b) If it appears that the evidence presented, or to be presented, supports the granting of the motion as to some but not all of the issues involved in the action, the court shall grant the motion as to those issues and the action shall proceed as to the issues remaining. Despite the granting of the motion, no final judgment shall be entered prior to the termination of the action, but the final judgment in the action shall, in addition to any matters determined in the trial, award judgment as determined by the motion herein provided for. [¶] (c) If the motion is granted, unless the court in its order for judgment otherwise specifies, the judgment of nonsuit operates as an adjudication upon the merits. . . .”
Defendants served their written motion for nonsuit regarding the consolidated cases on September 5, 2007. Regarding the case in this appeal, defendants argued that plaintiffs’ first cause of action for removal of defendants Le and Dantu as directors of QTCL, the third cause of action for involuntary dissolution of QTCL, and the fourth cause of action for QTCL’s breach of an equipment lease were “resolved” by the court’s September 13, 2004 order, which dissolved QTCL, relieved “shareholders and directors of all claims of creditors and other shareholders,” and approved “the settlement by the receiver of all of [plaintiff’s] claims against” QTCL. Regarding the second cause of action for breach of fiduciary duty, defendants contended that plaintiff’s prayer for relief in the amended complaint only referred to $494,000 in damages, which corresponded to the $494,000 that plaintiff sought in damages in the fourth cause of action for breach of an equipment lease that had already been resolved.
Defendants further argued that plaintiff should not be allowed at trial to expand the claims in his pleading. First, defendants contended that allowing an amendment for “claims beyond the breach of equipment lease claim damages he sought in the amended complaint” would “vastly prejudice” them. Second, they contended that “[m]uch of what plaintiff seeks to recover,” such as his claims for lost profits and theft of corporate business, occurred after he filed his amended complaint. Defendants asserted that “[a] case cannot be based upon events occurring after the complaint was filed,” plaintiff “never bothered to amend his complaint to allege such claims,” and it was “too late” for him to do so at trial. Third, defendants argued that the claims in plaintiff’s shareholder’s derivative action were resolved by the court’s September 13, 2004 order discharging defendants Le and Dantu from “ ‘their duties and liabilities to creditors and shareholders.’ ” Defendants argued that any claims of QTCL that were transferred to plaintiff as a result of September 13, 2004 order were time-barred, because plaintiff never filed a timely complaint or an amended complaint regarding those transferred claims.
Plaintiff’s Motion for Leave to Amend
On September 7, 2007, plaintiff filed a written brief in opposition to the motion for nonsuit and in support of a motion for leave to amend the complaint. Among other things, plaintiff explained that the second cause of action in the amended complaint, filed April 23, 2002, was not limited to any particular sum and was “unartfully pleaded as a derivative claim.” Because he was assigned all of QTCL’s claims against defendant’s Le and Dantu in the court’s order of September 13, 2004, plaintiff asserted that from that point forward it was unnecessary for him “to allege a derivative action and he was entitled to sue for vindication of corporate rights in his own name.” He further contended that the September 13, 2004 order did not discharge defendants Le and Dantu from liability to the corporation as officers and directors.
To the extent leave to amend was necessary for him to pursue defendants’ breaches of fiduciary duty occurring after the amended complaint was filed on April 23, 2002, plaintiff contended that leave to amend should be granted because defendants were not misled by the allegations in the current pleading and they would not be prejudiced by an amendment. In this regard, plaintiff argued that (1) previous comments by defense counsel during the litigation indicated that defense counsel “appreciated the dichotomy between the pleadings and the claims being made,” and (2) “full disclosure was made of plaintiff’s claims” during discovery, including the checks written after April 23, 2002 that were issued in breach of fiduciary duty by defendants Le and Dantu. In a declaration, plaintiff’s counsel stated that the case had been “dormant for several years,” the case had been stayed for a period of time, and he had “no appreciation of the need for an amendment until the day of the trial when [defense counsel] raised the issue in chambers.”
Plaintiff submitted a proposed second amended complaint, which contained a single cause of action for breach of fiduciary duty against defendants Le and Dantu. In the proposed pleading, plaintiff asserted that “b[y] virtue of a preliminary injunction issued in this case in March, 2002, Dantu willingly assumed the responsibility of co-signing QTCL checks to ensure no embezzlement by Le.” Plaintiff alleged that from January 2001 to August 9, 2002, defendants Le and Dantu breached their fiduciary duties by embezzling corporate funds and diverting profitable activities from QTCL, or by ratifying or failing to stop the misconduct. Plaintiff stated that defendants’ conduct damaged QTCL in a sum of not less than $850,000; forced QTCL “to insolvency” and into a receivership on August 9, 2002; and by reason of being forced out of business QTCL suffered lost profits of at least $975,000. Plaintiff also included allegations regarding the assignment of QTCL’s rights against defendants Le and Dantu to him, explaining that he was now suing defendants “as assignee of QTCL and not as a shareholder thereof.” In the prayer for relief, plaintiff sought damages of “at least $1,825,000[].”
On September 10, 2007, defendants served a reply brief in support of their motion for nonsuit and a memorandum in opposition to plaintiff’s motion for leave to amend the complaint. In their opposition to the motion for leave to amend, defendants argued that they would be prejudiced by the proposed amendment seeking $1,825,000; the four-year statute of limitations on the proposed breach of fiduciary claim had already run; in the absence of a new pleading by plaintiff after the assignment of the corporation’s claims, they reasonably believed that all of QTCL’s claims against them “ended” with the court’s September 13, 2004 order; and they were not given notice that plaintiff intended to assert claims arising after April 23, 2002.
Initial Ruling Regarding Motion for Nonsuit
The trial court deemed defendants’ motion for nonsuit submitted upon its receipt of defendants’ reply brief in support of the motion. The court’s written ruling, dated September 11, 2007, addressed defendants’ motion as to each of the cases that had been consolidated. Regarding the instant case, the court concluded that the September 13, 2004 order “rendered moot” plaintiff’s first, third, and fourth causes of action, as well as a cross-complaint that had been filed by QTCL. (Underscore omitted.)
The trial court also denied plaintiff’s request to amend his second cause of action. The trial court found “several changes of note” in the proposed pleading as compared to the operative pleading filed on April 23, 2002. For example, in the proposed pleading, plaintiff referred to obligations under a preliminary injunction issued in March 2002; alleged that embezzlement activities occurred between January 2001 and August 2002; claimed damages of not less than $850,000; asserted that QTCL was forced to insolvency, placed in a receivership, and suffered lost profits of at least $975,000; alleged that plaintiff was now suing defendants as an assignee of QTCL; and included a prayer for damages of at least $1,825,000. Observing that these events “did not take place yesterday,” the court determined that plaintiff failed to offer an “adequate explanation” as to why the request for leave to amend was being made “in September of 2007, let alone as a response to a motion for nonsuit.” Although recognizing that amendments are to be liberally allowed, the court explained that “[t]he substantial (and unexcused) delay that has occurred in this instance, coupled with the clearly prejudicial aspect of dealing for the first time with events and occurrences, along with what is now $1,825,000 in damages, that are post-April 23, 2002 (the filing of the last operative Amended Complaint)” caused it “after careful consideration” to deny plaintiff’s request to amend his pleading.
Regarding the second cause of action still remaining in the operative pleading, the court indicated that it still had “some doubt” about defendants’ arguments as to that cause of action “such that pending further review, the nonsuit motion” would be denied as to that cause of action. The court explained that plaintiff’s second cause of action would proceed to trial as to damages caused by defendants’ conduct up to and including April 23, 2002, “subject to whether the Court’s prior discharging of the officers and directors from further liability is as to creditors and shareholders only, or whether it includes the corporation itself.”
The court gave copies of the written ruling to counsel on the morning of September 11, 2007, and delayed commencement of the proceedings so that counsel would have an opportunity to review the ruling. The court then heard argument from counsel regarding whether the second cause of action remained viable following the order of September 13, 2004. After hearing argument from counsel, the court took the matter under submission and proceeded with the trial of an issue in one of the other consolidated cases.
Further Ruling Regarding Motion for Nonsuit
On September 18, 2007, the trial court filed a further written ruling in which it granted defendant’s motion for nonsuit as to plaintiff’s second cause of action. The court explained that the September 13, 2004 order had dissolved QTCL and discharged the liabilities of QTCL’s directors to creditors and shareholders. With the absence of QTCL in the action, the court determined that it lacked jurisdiction to proceed as to the second cause of action, which was alleged as a shareholder’s derivative action.
A judgment was subsequently filed, dismissing plaintiff’s complaint with prejudice. Plaintiff filed a timely notice of appeal.
In view of the order consolidating for all purposes No. CV805958 and No. CV807585, we requested supplemental briefing from the parties regarding whether a final judgment exists as to defendants Le and Dantu from which an appeal may be taken. The parties provided supplemental briefs. Attached to plaintiff’s supplemental brief is a copy of a January 14, 2008 order by the superior court severing No. CV805958 from No. CV807585. In view of this order severing the cases, we determine that a final judgment exists in No. CV805958, and we will consider the merits of the appeal.
III. DISCUSSION
Motion for Nonsuit
A defendant may move for nonsuit at the completion of the plaintiff’s opening statement in a court trial. (§ 581c, subd. (a); Lingenfelter v. County of Fresno (2007) 154 Cal.App.4th 198, 204-209; see also Gonsalves v. Dairy Valley (1968) 265 Cal.App.2d 400, 402-404; Nelson v. Specialty Records, Inc. (1970) 11 Cal.App.3d 126, 141; Enterprise Leasing Corp. v. Shugart Corp. (1991) 231 Cal.App.3d 737, 747, fn. 5.) “If the motion is granted, unless the court in its order for judgment otherwise specifies, the judgment of nonsuit operates as an adjudication upon the merits.” (§ 581c, subd. (c).)
“The standard of review for a nonsuit after conclusion of the opening statement is well settled. Both the trial court in its initial decision and the appellate court on review of that decision must accept all facts asserted in the opening statement as true and must indulge every legitimate inference which may be drawn from those facts. [Citations.] A nonsuit at this early stage of the proceedings is disfavored. [Citation.] It can only be upheld on appeal if, after accepting all the asserted facts as true and indulging every legitimate inference in favor of plaintiff, it can be said those facts and inferences lead inexorably to the conclusion plaintiff cannot establish an essential element of its cause of action or has inadvertently established uncontrovertible proof of an affirmative defense. [Citations.]” (Abeyta v. Superior Court (1993) 17 Cal.App.4th 1037, 1041; see Castaneda v. Olsher (2007) 41 Cal.4th 1205, 1214-1215.)
On appeal, plaintiff contends that the trial court erred “by withholding leave to amend . . ., which led to the incorrect decision to grant a nonsuit.” We understand plaintiff to be arguing that if his motion for leave to amend had been granted, then defendants’ motion for nonsuit should have been denied. As plaintiff’s claim of error regarding the nonsuit ruling is limited to whether his motion for leave to amend was improperly denied, we turn to the legal principles governing a motion to file an amended or supplemental complaint and the applicable standard of review.
Amended or Supplemental Complaint
A trial court has discretion to permit amendments to a pleading. (§§ 473, subd. (a)(1), 576.) “Although courts are bound to apply a policy of great liberality in permitting amendments to the complaint at any stage of the proceedings, up to and including trial [citations], this policy should be applied only ‘where no prejudice is shown to the adverse party . . . .’ [Citation.] A different result is indicated ‘where inexcusable delay and probable prejudice to the opposing party’ is shown. [Citation.]” (Magpali v. Farmers Group (1996) 48 Cal.App.4th 471, 487 (Magpali); see Trafton v. Youngblood (1968) 69 Cal.2d 17, 31 [no abuse of discretion in denying amendment to conform to proof if new and substantially different issues are introduced or adverse party would be prejudiced]; City of Stanton v. Cox (1989) 207 Cal.App.3d 1557, 1563.) The trial court’s ruling on a motion for leave to amend is reviewed under the abuse of discretion standard. (Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.)
Section 473, subdivision (a)(1) states in part: “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, or by correcting a mistake in the name of a party, or a mistake in any other respect; . . . The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars; and may upon like terms allow an answer to be made after the time limited by this code.”
Section 464, subdivision (a), permits a party, upon motion, to file a supplemental complaint “alleging facts material to the case occurring after the former complaint.” Although “[f]acts occurring after filing of a complaint . . . should be pleaded by supplemental rather than amended complaint (Code Civ. Proc., § 464),” a court must consider the substance and not the label of the pleading in determining its status. (Hutnick v. United States Fidelity & Guaranty Co. (1988) 47 Cal.3d 456, 464, fn. 6.) In ruling on a motion to file a supplemental pleading, “[i]t is the general policy that courts should exercise liberality in permitting the filing of supplemental pleadings when the alleged ‘occurring-after’ facts are pertinent to the case. [Citations.] Nonetheless, the motion to file a supplemental pleading is addressed to the sound legal discretion of the court, and its ruling will not be disturbed on appeal in the absence of a showing of a manifest abuse of that discretion. [Citations.]” (Flood v. Simpson (1975) 45 Cal.App.3d 644, 647.)
In this case, the trial court recognized that amendments to pleadings should be liberally allowed. The court found, however, that plaintiff substantially delayed in seeking the amendments in September 2007 and that the delay was inexcusable. The court observed that plaintiff’s proposed allegations involved events occurring by 2004 at the latest, were new and different from the allegations in the operative pleading filed in April 2002, and would cause prejudice to defendants if they were forced to defend against the allegations at trial, which had already commenced. The court therefore denied plaintiff’s motion to file an amended or supplemental complaint.
We determine that the trial court did not abuse its discretion in denying plaintiff’s motion. The motion was made more than five years after the operative pleading was filed and at least three years after the occurrence of the proposed allegations. Further, at the time plaintiff made the motion, the trial had already commenced and defendants had filed a motion for nonsuit. On appeal, plaintiff acknowledges that “[t]he need to amend simply fell through the cracks,” but alleges that “the delay was not due to plaintiff.”
We agree with the trial court, however, that the delay by plaintiff in seeking leave to amend or to file a supplemental complaint was substantial and inexcusable.
In addition, plaintiff’s proposed pleading contained new and different factual allegations, many of which occurred after the filing of the operative pleading in April 2002. For example, based on an assignment of rights that occurred in 2004, plaintiff proposed to seek recovery from defendants Le and Dantu for the alleged embezzlement or diversion of corporate funds through August 2002, as well as lost profits after the corporation was “forced out of business” in 2004. Based on the new allegations, plaintiff contemplated seeking hundreds of thousands of dollars, if not over $1 million dollars, more from defendants beyond what was alleged in the amended complaint filed on April 2002, the operative pleading. However, in view of the allegations in plaintiff’s April 2002 pleading and the content of the court’s September 13, 2004 order, which among other things, dissolved QTCL and discharged certain liabilities of its directors, defendants believed there were no viable claims remaining in the April 2002 pleading. Under these circumstances, it was not unreasonable for the trial court to conclude that allowing an amended or supplemental complaint with the new allegations to be filed at the time of trial would have been prejudicial to defendants. The new allegations would have “changed the tenor and complexity of the complaint” (Magpali, supra, 48 Cal.App.4th at p. 487) and would have required additional time for defendants to prepare a defense and undoubtedly would have required additional discovery by defendants.
Relying on a conversation with defense counsel regarding the substance of pretrial discovery, plaintiff contends that defendants “were not misled and would not have been prejudiced by an amendment.”
We are not persuaded by plaintiff’s argument. First, regarding one or more conversations between plaintiff’s counsel and defense counsel that apparently took place sometime before trial, there appears to be a factual dispute as to what was discussed. In a declaration filed in support of plaintiff’s motion for leave to amend, plaintiff’s counsel states that defense counsel “orally alleged in my presence to Judge Cain that he purportedly had a conversation with me ‘in the parking lot’ following the deposition of ‘his client’ in which he allegedly expressed to me that the pleadings did not support a claim for any breach of fiduciary duty arising after the filing of the amended complaint . . . .” Plaintiff’s counsel states in his declaration: “I recall the conversation differently. Following the deposition of Shiva Dantu taken in my office in April, 2007, we discussed whether or not the pleadings supported any claim for embezzlement of funds via checks. I assured counsel that there was a breach of fiduciary duty claim alleged. I most certainly was not advised of counsel’s belief that we could not introduce evidence of events occurring after April 23, 2002; had that occurred, I immediately would have sought leave to correct the problem.” In contrast, in opposition to plaintiff’s motion for leave to amend, defense counsel indicated that he had a conversation with plaintiff’s counsel in September 2005, in the parking lot of plaintiff’s counsel’s office building following the deposition of defendant Le. Defense counsel asked plaintiff’s counsel whether he intended to amend his pleading “to specify what claims he intends to assert against Mr. Le and Mr. Dantu because the Final Order discharging the receiving [sic] and dissolving the company seems to moot the claims in the complaint. [Plaintiff’s counsel’s] response was that he did not see any need to amend his complaint.” Defense counsel also indicated that “[a]t no time did [plaintiff’s counsel] provide any notice to [him] that the case he was bringing to trial would exceed the scope of the April 23, 2002 Amended Complaint . . . .” In view of the factual dispute as to what was discussed by counsel, we are unable to conclude from the record on appeal that defense counsel was aware of the nature or scope of the claims that plaintiff intended to pursue beyond what was alleged in the operative pleading.
Second, as to the scope of discovery that was conducted, plaintiff points to his June 2002 responses to special interrogatories as disclosing “claims arising from transactions which occurred after the filing of the Amended Complaint on April 23, 2002.” These interrogatory responses do not refer to any dates after April 23, 2002. Plaintiff next points to documents that were produced at the first session of his deposition on April 12, 2007. Plaintiff states that these documents refer to checks, including some written after April 23, 2002, and these checks were issued in breach of defendants’ fiduciary duties. He also quotes from his own deposition testimony from April or August 2007, and asserts that he “was asked about, and described, his claims to breach of fiduciary duty arising after the filing of the Amended Complaint.” Based on the record on appeal, however, it appears that plaintiff did not make clear to defendants that he was going to pursue corporate claims that had been “turned . . . over” to him by the receiver and claims arising from conduct occurring after April 23, 2002—such as the issuance of checks that allegedly represented embezzled corporate funds—until the last day of his deposition on August 30, 2007. Even at that point, plaintiff appeared to recognize these were not part of his current lawsuit, as he testified that he was “going to add that to the claim” in response to being asked whether certain checks were part of his “claim in this lawsuit.” The trial, however, was scheduled to begin only a few days later, on September 4, 2007. In view of the circumstances of this case, we determine that the trial court was not unreasonable in finding that defendants would have been prejudiced by the amendments that plaintiff thereafter requested in response to defendants’ nonsuit motion. The proposed allegations encompassed events occurring years earlier, pertained to a new set of facts upon which plaintiff sought to establish a breach of fiduciary duty, had not all been entirely disclosed until plaintiff’s opening statement, and were the basis for a significantly larger amount of damages.
Because the trial court did not abuse its discretion in denying plaintiff’s motion for leave to amend, and plaintiff does not assert any other claim of error with respect to the court’s grant of nonsuit to defendants, the judgment of nonsuit will not be set aside.
IV. DISPOSITION
The judgment is affirmed.
WE CONCUR: ELIA, ACTING P.J., DUFFY, J.
Section 576 provides: “Any judge, at any time before or after commencement of trial, in the furtherance of justice, and upon such terms as may be proper, may allow the amendment of any pleading or pretrial conference order.”