## Facts

- Stephen N. Honig worked for a savings and loan entity beginning in 1982, marketing “jumbo” certificates of deposit.
- Honig alleged the employer promised continued employment if his performance was satisfactory.
- He claimed he was pressured to engage in illegal acts, fraud, and misrepresentations in selling certificates of deposit and to withhold material facts from investors.
- He alleged that beginning in 1987 the employer and individual employees harassed and intimidated him.
- On February 5, 1988, while still employed, Honig sued on multiple theories, including contract and tort claims tied to alleged coercion and workplace mistreatment, stating he filed to prevent an anticipated discharge.
- After the lawsuit was filed, the employer required Honig to attend an ethics committee meeting, refused his request to have counsel present, and treated his refusal to discuss the pending lawsuit as insubordination.
- Honig was terminated after submitting a written statement declining to discuss the pending litigation.
- Discovery focused heavily on the ethics committee meeting and the termination.

## Issues

1. Whether the trial court abused its discretion by denying leave, shortly before trial, to amend the complaint to add wrongful discharge in violation of public policy and defamation claims arising from the termination and related events.
2. Whether the proposed new claims related back to the original complaint for limitations purposes because they arose from the same general facts and course of conduct.
3. Whether federal banking/receivership law deprived California courts of jurisdiction over the employment and tort claims.

## Decision

- The Court of Appeal reversed and remanded.
- The trial court abused its discretion by denying leave to amend because the proposed claims were closely tied to the same operative facts already litigated in discovery.
- The proposed wrongful discharge and defamation causes of action related back to the original filing because they arose from the same general set of facts, injury, and alleged course of conduct.
- California courts retained jurisdiction over the claims notwithstanding the federal regulatory/receivership context.
- Because summary judgment was granted after, and was connected to, the erroneous denial of amendment, the judgment for defendants could not stand.

## Legal Principles

- California policy strongly favors liberal allowance of amendments to promote decisions on the merits; late-stage amendments should be permitted absent substantial prejudice to the opposing party.
- An amendment relates back when it rests on the same general set of facts, the same injury, and the same alleged instrumentality or course of conduct, even if it adds new legal theories or causes of action.
- Fast-track case management does not justify denying an otherwise proper amendment where the opposing party is already aware of the underlying facts through litigation and discovery.
- State courts are not divested of jurisdiction over employment and tort claims involving federally connected financial institutions or receivers absent a clear statutory bar.

## Conclusion

The appellate court held that Honig should have been allowed to amend to plead termination-related wrongful discharge and defamation claims because they were factually continuous with the originally pleaded dispute and caused no substantial prejudice; it also confirmed state-court jurisdiction despite the federal banking receivership context, requiring reversal of the resulting summary judgment.


Honig v. Fin. Corp. of Am., 6 Cal. App. 4th 960, 7 Cal. Rptr. 2d 922 (Ct. App. 1992)