Shun Huang, et al. v. SJC Construction, Inc., et al.

ruling on this motion, the Court denies Plaintiff's request for sanctions as each party was partially meritorious in their arguments. --- RULING: In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court's records. ORDER Plaintiff Yofiel Bibi's Motion to Compel Further came on regularly for hearing on September 4, 2026, with appearances/submissions as noted in the minute order for said hearing, and the Court, being fully advised in the premises, did then and there rule as follows: THE MOTION TO COMPEL DEFENDANT LACMTA'S FURTHER RESPONSES IS DENIED AS TO RPD, SET THREE, NOS. 1, 4-6, 12-13, AND 15.

THE MOTION IS GRANTED AS TO RPD NO. 8; NOS. 9-10 SO THAT LACTMA MAY PRODUCE A SUPPLEMENTAL PRIVILEGE LOG; AND NO. 11 SUBJECT TO A PROTECTIVE ORDER. RESPONSES SHALL BE DUE WITHIN 30 DAYS OF THIS ORDER. NO SANCTIONS SHALL BE AWARDED. PLAINTIFF TO PROVIDE NOTICE. IT IS SO ORDERED.

SEPTEMBER 4, 2026 MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT Los Angeles Superior Court Case # 25NNCV03544 MP: Plaintiffs Shun Huang and Jacqueline Chen RP: Defendants SJC Construction, Inc., Nicole Rain Construction, Inc., and Xiaofei Li NOTICE: The Court is not requesting oral argument on this matter. Unless the Court directs argument in the Tentative Ruling, no argument is required and any party seeking argument should notify all other parties and the court of the party's intention to appear and argue. The tentative ruling will become the ruling of the court if no argument is received. Notice may be given either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412.

ALLEGATIONS: A. Complaint Shun Huang and Jacqueline Chen (" Plaintiffs ") allege they entered into a contract with Defendants SJC Construction, Inc. ("SJC"), Nicole Rain Construction, Inc. ("NRC"), and Xiaofei Li ("Li") for a renovation project at 2400 Ridgeway Road in San Marino, with a $95,000 total price and an October 1, 2024 agreed completion date. Plaintiffs allege that despite substantial payment, Defendants failed to complete the work or obtain required permits. Plaintiffs contend that the City of San Marino issued Notices of Violation citing property issues and that they had asked Defendants for property and permit updates, but Defendants failed to obtain required permits or submit required application drawings.

Plaintiffs hired a new contractor, Tom Tuzz, to complete the work. Plaintiffs allege they were damaged in the amount of $75,810 for the amount paid to Defendants, credit for job completed, payment required to the new general contractor, and 5% penalty. The Complaint, filed May 23, 2025, alleges: (1) Breach of Contract; (2) Breach of Implied Covenant of Good Faith and Fair Dealing; and (3) Tort of Another Claim for Attorney's Fees. B. Cross-Complaint On July 22, 2025, SJC, NRC, and Li filed a Cross-Complaint against Huang and Chen for: (1) Breach of Contract; and (2) Common Counts.

MOTION ON CALENDAR: On June 5, 2026, Plaintiffs filed a Motion for Leave to File the First Amended Complaint ("FAC"). On August 14, 2026, Defendants filed an opposition. On August 27, 2026, Plaintiff filed a reply. LEGAL STANDARD: The court may, in its discretion and after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading, including adding or striking out the name of any party, or correcting a mistake in the name of a party, or a mistake in any other respect. (C.C.P.

Sec. 473(a)(1).) "[T]he court's discretion will usually be exercised liberally to permit amendment of the pleadings. The policy favoring amendment is so strong that it is a rare case in which denial of leave to amend can be justified." (Howard v. County of San Diego (2010) 184 Cal.App.4th 1422, 1428.) "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 ... this policy should be applied only '[w]here no prejudice is shown to the adverse party. ...

A different result is indicated '[w]here inexcusable delay and probable prejudice to the opposing party' is shown." (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 487 [citations omitted].)

A motion to amend a pleading must include (1) a copy of the proposed amendment or amended pleading which must be serially numbered to differentiate it from previous pleadings or amendments and (2) a statement of what allegations in the previous pleading are proposed to be deleted or added. (C.R.C. Rule 3.1324(a).) These changes should identify by page, paragraph, and line number where the allegations added/removed are located. The motion shall also be accompanied by a declaration attesting to (1) the effect of the amendment, (2) why the amendment is necessary and proper, (3) when the facts giving rise to the amended allegations were discovered, and (4) why the request for amendment was not made earlier. (C.R.C.

Rule 3.1324(b).) In ruling on a motion for leave to amend a pleading, the court does not consider the merits of the proposed amendment, because "the preferable practice would be to permit the amendment and allow the parties to test its legal sufficiency by demurrer, motion for judgment on the pleadings or other appropriate proceedings." (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048.) While the trial court may deny a motion for leave to amend on grounds including that the party seeking the amendment has caused unreasonable delay in doing so, it probably abuses its discretion if it denies any such motion in the absence of a finding of prejudice to the opposing side.¿ (See Thompson Pacific Construction, Inc. v.

City of Sunnyvale (2007) 155 Cal.App.4th 525, 544-545.) ANALYSIS: Plaintiffs move for leave to file the proposed First Amended Complaint ("FAC"). A copy of the FAC is attached to counsel Kevin J. Lo's declaration as Exhibit A. (Lo Decl., P.2, Ex. A.) A review of the proposed FAC shows that Plaintiffs seek to add Nicole Du as a defendant and a fourth cause of action for Recovery of Funds Paid to Unlicensed Contractor Under California Business & Professions Code Sec. 7031. (See Molloy Reply Decl., P.6.)

According to the FAC, on March 4 and 6, 2026, Li's deposition went forward, wherein Plaintiffs discovered NRC possessed a contractor's license, but all work on the project was performed by SJC and Li. (Proposed FAC, P.4.) The Fourth Cause of Action for Recovery of Funds Paid to Unlicensed Contractor Under California Business & Professions Code Sec. 7031 is alleged against all Defendants--including the allegedly licensed NRC. Plaintiffs allege: "As an unlicensed contractor, Defendants are not entitled to keep any sums paid by Plaintiffs." (Id., P.105.)

Counsel Lo states that the FAC is necessary and proper so that all causes of action arising out of the transaction between the parties can be adjudicated in one forum and in one action. (Lo Decl., P.3.) He states that at Defendant Li's March 4 and 6, 2026 depositions, as individual and as person most knowledgeable of NRC and SJC, Plaintiffs discovered that NRC possessed a contractor's license. (Id., P.4.) However, Mr. Lo states that all the project work was performed by SJC and Li, and that they received all payments. (Id.)

He states that Li testified that NRC is a shell corporation with no corporate formalities, assets, or holdings, and is not a separate entity from

Nicole Du. (Id.) He further states that Li denied any relation to NRC and the proposed Defendant Nicole Du, and confirmed that Li and SJC were not working as a subcontractor for NRC or Nicole Du. (Id.) Mr. Lo states that SJC and Li performed under the contract without a valid contractor's license. (Id.) He states the motion was filed as soon as reasonably possible thereafter and that no unfair prejudice would result if the motion were granted as the trial is set for June 7, 2027 and the parties have sufficient time to conduct discovery and depositions. (Id., P.P.4-5.)

Defendants argue that Plaintiff has not explained the three-month wait after the depositions occurred on March 4 and 6 to the filing of this motion on June 5. In Plaintiffs' counsel Brendan T. Molloy's reply declaration, he states that Plaintiffs did not seek the amendment before the depositions because the material licensing and entity facts had not yet been developed through that testimony and that after the deposition, his office compared the deposition testimony with Defendants' prior verified responses. (Molloy Decl., P.7.)

While there was a short delay prior to filing this motion, the Court does not find that it was such an unreasonable delay so as to warrant denial of this motion. Taking Mr. Lo's declaration and the proposed FAC's allegations together, the Court finds that the CRC factors have been met. Next, Defendants argue that the proposed Fourth Cause of Action is futile because disgorgement claims have a one-year statute of limitation pursuant to C.C.P. Sec. 340(a) based on completion or cessation of the performance of the act or contract at issue and not on when the owner became aware in the lapse in license. (Eisenberg Village etc. v.

Suffolk Construction Co., Inc. (2020) 53 Cal.App.5th 1201, 1203 ["We hold that the one-year statute of limitations applies to claims for disgorgement under section 7031(b). We also hold that the discovery rule does not apply, and that a section 7031(b) claim accrues upon the completion or cessation of the performance of the act or contract at issue. Because Eisenberg failed to bring its section 7031(b) claim within one year after the completion or cessation of Suffolk's performance, we affirm the judgment."]; San Francisco CDC LLC v.

Webcor Construction L.P. (2021) 62 Cal.App.5th 266, 279 [discussing Eisenberg, stating, "The appellate court affirmed the trial court's decision, holding that disgorgement claims against unlicensed contractors must be made within one year of completion of the work, regardless of when the owner became aware of the lapse in license."].) Defendants argue that Plaintiff's discovery of the licensing defect until Li's March 2026 depositions is irrelevant for accrual purposes. Plaintiffs argue that this cause of action is not time-barred, they are not invoking the delayed discovery rule, and they seek to apply the relation back doctrine.

The Court of Appeal discussed the relation back doctrine as follows in Pointe San Diego Residential Community, L.P. v. Procopio, Cory, Hargreaves & Savitch, LLP (2011) 195 Cal.App.4th 265, 276-277:

An amended complaint is considered a new action for purposes of the statute of limitations only if the claims do not "relate back" to an earlier, timely-filed complaint. Under the relation-back doctrine, an amendment relates back to the original complaint if the amendment: (1) rests on the same general set of facts; (2) involves the same injury; and (3) refers to the same instrumentality. [Citations.] An amended complaint relates back to an earlier complaint if it is based on the same general set of facts, even if the plaintiff alleges a different legal theory or new cause of action. [Citations.]

However, the doctrine will not apply if the "the plaintiff seeks by amendment to recover upon a set of facts entirely unrelated to those pleaded in the original complaint." [Citation.] In determining whether the amended complaint alleges facts that are sufficiently similar to those alleged in the original complaint, the critical inquiry is whether the defendant had adequate notice of the claim based on the original pleading. "The policy behind statutes of limitations is to put defendants on notice of the need to defend against a claim in time to prepare a fair defense on the merits.

This policy is satisfied when recovery under an amended complaint is sought on the same basic set of facts as the original pleading. [Citation.]" [Citations and footnoe.] Additionally, in applying the relation-back analysis, courts should consider the "strong policy in this state that cases should be decided on their merits." [Citations.] (Pointe San Diego, supra, 195 Cal.App.4th at 276-277 [citations and footnote omitted].) Plaintiffs argue that the proposed allegations arise from the same operative facts as the initial Complaint related to the same July 3, 2024 project, residence, construction work, payments, and alleged failure to perform/obtain permitting, such that the proposed FAC's allegations relate back to the Complaint's May 23, 2025 filing date and not the June 5, 2026 motion filing date.

Plaintiffs argue that whether the taking SJC, NRC, and Li's Cross-Complaint allegations that the project was finished on January 3, 2025, pending the city's final inspection (Cross-Complaint at P.10) or Plaintiff's Complaint allegations that Defendants were unable or unwilling to finish the work (Compl., P.28), the Complaint was timely filed on May 23, 2025 (within one year) and that the proposed allegations too relate back to the initial filing date. At this stage, the Court finds that Plaintiffs have made a prima facie shown that their claim relates back to the initial Complaint.

However, by making this finding on this motion, the Court is not foreclosing Defendants from reasserting this position in a demurrer or other similar motion. Finally, Defendants argue that adding Nicole Du would be futile and prejudice Defendants because the alter ego allegations are boilerplate and her inclusion would require additional discovery. However, whether the alter ego allegations are boilerplate is an argument better raised in a demurrer as such allegations can be amended if lacking.

Furthermore, while amendment may invite some convenience, the policy favors allow amendments so that cases can be fully heard on their merits. Based on the moving papers and Mr. Lo's

declaration, the Court grants Plaintiffs' motion to file the FAC. Counsel's declaration addresses the factors under CRC Rule 3.1324. Mr. Lo's declaration, Exhibit A, and Mr. Mollow's declaration provide the effect of the amendment, explain why the amendment is necessary and proper, and justify why the amendment was not made earlier. Finally, the Court recognizes the liberal policy in allowing amendment. "[T]he court's discretion will usually be exercised liberally to permit amendment of the pleadings.

The policy favoring amendment is so strong that it is a rare case in which denial of leave to amend can be justified." (Howard v. County of San Diego (2010) 184 Cal.App.4th 1422, 1428.) --- RULING: In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court's records. ORDER Plaintiffs Shun Huang and Jacqueline Chen's Motion for Leave to File the First Amended Complaint came on regularly for hearing on September 4, 2026 with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows: THE MOTION FOR LEAVE TO FILE THE FIRST AMENDED COMPLAINT IS GRANTED.

PLAINTIFFS ARE ORDERED TO FILE A CLEAN COPY OF THE FIRST AMENDED COMPLAINT WIHIN TWO COURT DAYS FOLLOWING THE HEARING. DEFENDANT WILL HAVE 30 DAYS TO FILE A RESPONSIVE PLEADING. PLAINTIFF HUANG TO PROVIDE NOTICE. IT IS SO ORDERED. Case Number: 25NNCV04246 Hearing Date: September 4, 2026 Dept: A TENTATIVE RULING SEPTEMBER 4, 2026 MOTIONS TO DEEM RFA MATTERS ADMITTED Los Angeles Superior Court Case # 25NNCV04246 MP: Plaintiff Creditors Adjustment Bureau, Inc. RP: No opposition received NOTICE: The Court is not requesting oral argument on this matter.

Unless the Court directs argument in the