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Cloud v. Northrop Grumman Corp.11/12/1998
pproved amendments to substitute in a real party in interest even after the expiration of the statute of limitations, and had ruled that such amendments "relate back" to the time of the filing of the initial complaint so as to avoid the bar of the statute. (Id. at pp. 21-22.)
Subsequent cases have recognized that Klopstock stands for the proposition that California Code of Civil Procedure section 473 must be liberally construed to permit amendment to substitute a plaintiff with standing for one who is not a real party in interest. (See, e.g., Powers v. Ashton (1975) 45 Cal.App.3d 783, 790; California Air Resources Bd. v.Hart (1993) 21 Cal.App. 4th 289, 300.) The Powers court elaborated: "The discretion vested by section 473 must be exercised liberally in favor of amendment where a demurrer is interposed to an initial complaint. If such a demurrer is sustained without leave to amend, a reviewing court is compelled to find an abuse of discretion in denying leave where the plaintiff presents a tenable basis of amendment . . . ." (Powers v. Ashton, supra, 45 Cal.App.3d at p. 790.) Although here we are concerned with a motion for judgment on the pleadings, such a motion "is in effect a substitute for a general demurrer. [Citations.]" (Olsen v. Lockheed Aircraft Corp. (1965) 237 Cal.App.2d 737, 742.) Hence the same standards regarding leave to amend apply.
The Supreme Court's rationale and citation of authority in Klopstock demonstrates that the policy requiring liberal leave to amend is not dependent on whether the statute of limitations period has expired. According to Klopstock, an amendment to substitute the real party in interest as plaintiff is entitled to "relation-back" effect so long as the cause of action against the defendant is not factually changed. (Klopstock, supra, 17 Cal.2d at pp. 21-22.) Later, in Austin v. Massachusetts Bonding & Insurance Co. (1961) 56 Cal.2d 596, the Supreme Court explained that the law allowing liberal amendment of pleadings after expiration of the statute of limitations period has actually broadened after Klopstock. "[Prior] cases held that a mere change in legal theory would not prevent an amendment from relating back but that an amendment would not relate back if it set forth `a wholly different cause of action,' i.e., `a wholly different legal liability or obligation.' [Citing, inter alia, Klopstock.] In the Klopstock case it was unnecessary to consider whether the right of a party to amend should be further broadened, since we held that the amendment there involved was proper under the `wholly different cause of action' test." (Austin, supra, 56 Cal.2d at pp.600-601, italics added.) The Austin court went on to note that the "modern" rule allowed an amendment to relate back so long as recovery is sought on the same general set of facts as those alleged in the original complaint. (Id. at p. 600.)
Klopstock was decided on the more restrictive "wholly different cause of action" test. Klopstock held that an amendment to substitute the real party in interest for a plaintiff lacking standing passed even that more restrictive test. Such an amendment, changing nothing other than the identity of the plaintiff, would clearly pass the modern "same general set of facts" test. "California allows great liberality in the amendment of pleadings, particularly when the only change is a substitution of parties without alteration of the substantive grounds of the suit. [Citations.] A plaintiff may amend his complaint to sue in his representative rather than individual capacity without stating a new cause of action. [Citations.] . . . [ ] `It should be borne in mind . . . that the substantive cause of action counted on in the amended complaint has not been changed. I
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