1998 Ampersand Aviation LLC vs Esperer Holdings Inc et al
Case No: 17CV04837
Hearing Date: Wed Apr 17, 2019 9:30

Nature of Proceedings: (2) Motions for Judgment on the Pleadings

TENTATIVE RULING:

(1) As set forth herein, on the court’s own motion, the motion of defendant Federal Express Corporation is stricken and the hearing ordered off calendar for failure to comply with Code of Civil Procedure section 439.

(2) For the reasons set forth herein, the motion of defendant Esperer Holdings, Inc., for judgment on the pleadings is denied.

Background:

These are two consolidated actions. The lead case is 1998 Ampersand Aviation, LLC, etc. v. Esperer Holdings, Inc., case number 17CV04837. The lead case is consolidated with 1998 Ampersand Aviation, LLC, etc. v. Federal Express Corporation, case number 17CV04854 (the consolidated case).

(1) Allegations of Plaintiff’s Complaint in Lead Case

The plaintiff in the lead case is “1998 Ampersand Aviation, LLC f/k/a Ampersand Aviation, LLC.” (Complaint, ¶¶ 1, 3.)

Plaintiff is the master lessee under an existing master lease of certain airport property owned by the City of Santa Barbara that includes an airport hangar located at 495 South Fairview in Goleta. (Complaint, ¶ 8.)

On December 20, 2005, plaintiff and non-party Select Personnel Services, Inc. (Select) entered into a written lease, including an addendum to the lease, (collectively, Select Sublease) by which plaintiff agreed to sublet to Select a 25,882 square foot portion of an airplane hangar at Santa Barbara Municipal Airport known as “Hangar 4A.” (Complaint, ¶ 9 & exhibit A.) Plaintiff and Select obtained express consent to enter into the Select Sublease from the City of Santa Barbara. (Complaint, ¶ 10.)

On June 1, 2013, Select assigned to defendant Esperer Holdings, Inc., (Esperer) all of its right, title, and interest under the Select Sublease pursuant to a written assignment (Assignment). (Complaint, ¶ 11 & exhibit B.) The Assignment was effective as of June 1, 2013. (Complaint, ¶ 12.) Although obligated to do so under the Select Sublease, Esperer has failed to pay rent when due. (Complaint, ¶¶ 14-20.)

(2) Procedural History

On October 16, 2017, plaintiff filed its complaint in the lead case. The complaint in the lead case asserts a single cause of action for breach of contract against Esperer.

On October 27, 2017, plaintiff filed its complaint in the consolidated case. The complaint in the consolidated case asserts a single cause of action for breach of contract against defendant Federal Express Corporation (FedEx).

On November 29, 2017, Esperer filed its answer to the complaint in the lead case, generally denying the allegations thereof and asserting 25 affirmative defenses. Esperer concurrently filed a cross-complaint against plaintiff “1998 Ampersand Aviation, LLC, f/k/a Ampersand Aviation, LLC,” asserting one cause of action for breach of contract. (Esperer Cross-complaint, ¶ 2 & p. 2.)

On December 5, 2017, FedEx filed its answer to the complaint in the consolidated case, admitting and denying the allegations thereof and asserting nine affirmative defenses.

On December 27, 2017, plaintiff filed its answer to Esperer’s cross-complaint, generally denying the allegations thereof and asserting 27 affirmative defenses.

On August 9, 2018, the court filed its order on the stipulation of the parties consolidating the lead case and the consolidated case for all purposes.

On December 21, 2018, FedEx filed its motion for judgment on the pleadings as to the complaint in the consolidated case. The motion was originally set for hearing on March 20, 2019.

On February 19, 2019, Esperer filed its motion for judgment on the pleadings as to the complaint in the lead case. The motion was originally set for hearing on March 30, 2019.

By stipulation and order entered on March 13, 2019, both motions were continued to this hearing.

Both motions are opposed by plaintiff.

Analysis:

(1) Motion of FedEx

FedEx has failed to comply with the mandatory pre-filing meet and confer requirements for a motion for judgment on the pleadings.

“Before filing a motion for judgment on the pleadings pursuant to this chapter, the moving party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to the motion for judgment on the pleadings for the purpose of determining if an agreement can be reached that resolves the claims to be raised in the motion for judgment on the pleadings.” (Code Civ. Proc., § 439, subd. (a).) “The moving party shall file and serve with the motion for judgment on the pleadings a declaration stating either of the following: [¶] (A) The means by which the moving party met and conferred with the party who filed the pleading subject to the motion for judgment on the pleadings, and that the parties did not reach an agreement resolving the claims raised by the motion for judgment on the pleadings. [¶] (B) That the party who filed the pleading subject to the motion for judgment on the pleadings failed to respond to the meet and confer request of the moving party or otherwise failed to meet and confer in good faith.” (Code Civ. Proc., § 439, subd. (a)(3).)

According to the notice of motion, FedEx’s motion is supported by the declaration of its counsel, attorney Michael C. McLaren. (Notice, p. 2.) The declaration addresses the procedural history of the cases but does not include the information required by section 439, subdivision (a)(3). As a result, the motion was not filed in conformity with law. On its own motion, the court strikes the motion on that ground. (See Overstock.Com, Inc. v. Goldman Sachs Group, Inc. (2014) 231 Cal.App.4th 471, 499-500 [inherent power of court to strike documents other than pleadings not filed in conformance with law].)

(Note: Insofar as the motion of FedEx is analytically the same as the motion of Esperer, if the court were to address the motion on its merits, the analysis would be the same as set forth below for the motion of Esperer.)

(2) Motion of Esperer

Defendant Esperer has complied with the requirements of Code of Civil Procedure section 439. (See Wolpert decl., filed Feb. 19, 2019, ¶ 2.)

“The standard for granting a motion for judgment on the pleadings is essentially the same as that applicable to a general demurrer, that is, under the state of the pleadings, together with matters that may be judicially noticed, it appears that a party is entitled to judgment as a matter of law. [Citations.] [¶] Judgment on the pleadings does not depend upon a resolution of questions of witness credibility or evidentiary conflicts. In fact, judgment on the pleadings must be denied where there are material factual issues that require evidentiary resolution.” (Schabarum v. California Legislature (1998) 60 Cal.App.4th 1205, 1216, fn. omitted.)

As discussed below, this motion is based upon the distinction between two different California limited liability companies: 1998 Ampersand Aviation, LLC, which is referred to herein as “1998,” and Ampersand Aviation, LLC, organized in 2003, which is referred to herein as “2003.”

(A) Requests for Judicial Notice

“The grounds for motion provided for in this section shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice. Where the motion is based on a matter of which the court may take judicial notice pursuant to Section 452 or 453 of the Evidence Code, the matter shall be specified in the notice of motion, or in the supporting points and authorities, except as the court may otherwise permit.” (Code Civ. Proc., § 438, subd. (d).)

In support of the motion, Esperer requests that the court take judicial notice of: (Defendant’s Request for Judicial Notice [DRJN], exhibit A) the articles of organization filed with the California Secretary of State on August 7, 1998, for 1998; (exhibit B) the certificate of amendment, filed on July 23, 2003, for 1998; (exhibit C) the articles of organization filed on July 23, 2003, for 2003; (exhibit D) the statement of information filed on August 20, 2008, for 1998; (exhibit E) the statement of information filed on July 14, 2011, for 2003; (exhibit F) the statement of information filed on August 15, 2014, for 2003; (exhibit G) the statement of information filed on February 11, 2017, for 1998; and (exhibit F) the certificate of the Secretary of State, dated November 13, 2018, as to the status of 2003.

The court will grant these requests for judicial notice. (Evid. Code, § 452, subd. (c); see also Friends of Shingle Springs Interchange, Inc. v. County of El Dorado (2011) 200 Cal.App.4th 1470, 1478, fn. 6.)

In opposition to the motion, plaintiff requests that the court take judicial notice of: (Plaintiff’s Request for Judicial Notice [PRJN], exhibit 1) the City of Santa Barbara, City Council Agenda Report, dated October 2, 1998, consenting to the assignment of leases from Lucas Aviation, Inc., to Ampersand Aviation, LLC. The court will grant this request for judicial notice. (Evid. Code, § 452, subd. (c).)

In reply, Esperer request that the court take judicial notice of various non-governmental documents produced in discovery. These requests are denied. The documents themselves are not subject to judicial notice as indisputably true. (See Evid. Code, § 452, subd. (h); Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 114-115.) In addition, the court does not consider new matter presented for the first time in reply. (See Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1538.)

(B) Standing

Esperer argues that the plaintiff does not have standing to bring this action for breach of contract because the plaintiff—1998—is not a party to the contract.

“ ‘ “There is a difference between the capacity to sue, which is the right to come into court, and the standing to sue, which is the right to relief in court.” ’ [Citation.] ‘A plaintiff lacks standing to sue if, for example, it [is] not a real party in interest.’ [Citation.] Incapacity, on the other hand, is merely a legal disability, such as minority or incompetency, that can be cured during the pendency of the litigation. [Citation.] ‘Suspension of corporate powers results in a lack of capacity to sue, not a lack of standing to sue.’ [Citation.]” (Washington Mutual Bank v. Blechman (2007) 157 Cal.App.4th 662, 669, italics omitted.)

“ ‘[I]t goes without saying that a party to a contract or one for whom the contract was intended to benefit may bring actions related to such contracts.’ [Citation.]” (Kanno v. Marwit Capital Partners II, L.P. (2017) 18 Cal.App.5th 987, 1019.) Conversely, one who has no interest in a contract, as a party (or successor-in-interest to a party) or as a third party beneficiary, does not have standing to assert a claim for breach of contract. (See Martinez v. Socoma Companies, Inc. (1974) 11 Cal.3d 394, 400 [contract may not be enforced by those only incidentally or remotely benefitted by it].)

The Select Sublease, attached as exhibit A to the complaint, is dated December 20, 2005, and identifies the “Lessor” as “Ampersand Aviation, LLC, a California limited liability company.” The addendum to the Select Sublease also identifies the “Lessor” as “Ampersand Aviation, LLC.” (Ibid.) The Assignment, dated June 1, 2013, identifies the “Lessor” as “Ampersand Aviation, LLC, a California limited liability company.” (Complaint, exhibit B.)

In the judicially noticed documents in support of this motion, Esperer notes that 1998 was originally organized on August 7, 1998, as “Ampersand Aviation, LLC.” (DRJN, exhibit A.) On July 24, 2003, 1998 changed its name to “1998 Ampersand Aviation, LLC.” (DRJN, exhibit B.) On the same day, 2003 was organized as “Ampersand Aviation, LLC.” (DRJN, exhibit C.) As a result, after July 24, 2003, the only limited liability company formally named “Ampersand Aviation, LLC” was 2003 and not 1998. The Select Sublease was entered into by “Ampersand Aviation, LLC” as “Lessor” in 2005. Esperer therefore argues that 2003 and not 1998 is the “Lessor” party to the Select Sublease and 1998 is merely a stranger to that contract without interest or standing to assert breach of contract. Esperer further argues that 2003 could not assert these claims because 2003’s status is suspended and therefore 2003 lacks the present capacity to sue. (See DRJN, exhibit H.)

In the judicially noticed documents in opposition, plaintiff points out that in October 1998, plaintiff, then known as “Ampersand Aviation, LLC” obtained its rights in the leased property after obtaining consent from the City of Santa Barbara to the assignment to plaintiff. (PRJN, exhibit 1.) There are no allegations that 2003 had real property rights in the leased property. There are, on the other hand, allegations that the plaintiff is the party with real property rights to the leased property. (See Complaint, ¶ 8.)

“A motion for judgment on the pleadings presents a question of entire absence of allegations but not the mere form of such allegations. [Citation.] In other words, it may be, in legal effect, a general demurrer but not a special demurrer to any of the pleadings.” (Dvorsky v. Balkum (1931) 118 Cal.App.364, 367; see also Rannard v. Lockheed Aircraft Corp. (1945) 26 Cal.2d 149, 151.)

As against a motion for judgment on the pleadings, the complaint sufficiently alleges that plaintiff 1998 is the party identified in the Select Sublease as the “Lessor” notwithstanding the omission of “1998” from the name of the “Lessor” in the lease documents. The existence of two limited liability companies with the same name at different times and only distinguished by the inclusion of “1998” in the earlier-organized company’s name presents a basis perhaps for uncertainty in the pleadings. But uncertainty is not a ground for a motion for judgment on the pleadings. Thus, the allegations are sufficient to allege standing in plaintiff 1998 for breach of contract.

In reply, Esperer argues that plaintiff cannot assert that 1998 is the “Lessor” party of the Select Sublease because plaintiff has stated that the Select Sublease is not ambiguous in discovery. Discovery responses address issues of proof and are not considered by the court in resolving this pleading motion.

Accordingly, the court will deny the motion for judgment on the pleadings.

In opposition, plaintiff alternatively requests leave to amend to address this uncertainty issue in varying particulars. Because the court will deny the motion for judgment on the pleadings, the request for leave to amend in the context of this motion is moot. If plaintiff wishes to amend its complaint, it must do so by a procedurally-appropriate noticed motion.