Berman

Plaintiff appeals from a judgment entered in favor of defendants after the court denied plaintiff’s motion for leave to file a third amended complaint for violation of the Corporate Securities Act and breach of fiduciary duty. The principal issue is whether the trial court properly denied leave to amend on the ground that the proposed verified third amended complaint contained allegations contradicting prior verified complaints, rendering the third amended complaint a sham pleading.

Procedural Background

On July 18, 1995, Jack Berman (Berman) filed a complaint for accounting, audit, breach of contract, intentional and negligent misrepresentation, and declaratory relief arising out of his investment in Spakor Oil and Gas Associates, a limited partnership. A verified first amended complaint was filed on August 28, 1995, and contained essentially the same causes of action as the original complaint.

The first amended complaint alleged that Berman and defendant Leo Edwin Bromberg (Bromberg) have had a personal relationship going back 55 years and Berman trusted Bromberg; Bromberg “completely controlled” and was the alter ego of Spakor, Inc.; Bromberg also “completely…