Case Name:    Holly Moose & Associates v. U.S. Legal Support, Inc.

Case No.:        1-14-CV-258886

Date:               April 22, 2014

Time:              9:00 a.m.

Dept:               8

Defendant U.S. Legal Support, Inc. (“Defendant”) demurs to each cause of action in the complaint of plaintiff Holly Moose & Associates (“Plaintiff”) and to the complaint as a whole on the grounds of uncertainty, lack of legal capacity, and failure to state sufficient facts to constitute a cause of action.  (See Code Civ. Proc. [“CCP”], § 430.10, subds. (b), (e), & (f).)

Defendant’s request for judicial notice in support of its demurrer is DENIED.  Contrary to Defendant’s assertion, the unilateral statement that “Plaintiff is not incorporated in California according to the California Secretary of State” is not an official record subject to judicial notice.  (See Evid. Code, § 452, subd. (c).)

Plaintiff’s request for judicial notice in support of its opposition is GRANTED IN PART and DENIED IN PART.  The request is GRANTED to the extent Plaintiff seeks judicial notice of the existence of its fictitious business name statement and proof of publication of the same.  (See Evid. Code, § 452, subd. (c).)  The request is DENIED to the extent Plaintiff seeks judicial notice of the records from Court Reporters Board of California v. U.S. Legal Support, Inc., et al. (Santa Clara County Super. Ct., Case No. 1-11-CV-197817) or of any fact set forth in its fictitious name statement or proof of publication.  (See Aquila, Inc. v. Super. Ct. (2007) 148 Cal.App.4th 556, 569 [courts may take judicial notice of the existence of official records, but not necessarily the facts set forth therein]; see also People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [only relevant matters are subject to judicial notice].)

Defendant’s demurrer to each cause of action and to the complaint as a whole on the ground of uncertainty is OVERRULED.  (See Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal App 4th 612, 616 [demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures”].)

Defendant’s demurrer to each cause of action and to the complaint as a whole on the ground of lack of capacity is OVERRULED.  Defendant contends that Plaintiff lacks capacity because it is a corporation that is not incorporated in California.  This argument is unavailing because the complaint does not allege that Plaintiff is a corporation.  (See Los Angeles Ry. Co. v. Davis (1905), 146 Cal. 179, 181 [demurrer for lack of capacity may only be sustained where the face of the complaint alleges that the plaintiff is a corporation and also facts demonstrating that “it is not such in fact”].)  Defendant next argues that Business and Professions Code section 17918 limits Plaintiff’s capacity because Plaintiff’s name is not a registered fictitious business name.  To the contrary, Plaintiff’s fictitious business name has been registered.  (See Plaintiff’s RJN, Ex. A; see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)  In any event, Business and Professions Code section 17918 only limits claims arising from a contract, but does not limit a party from asserting non-contract claims using its fictitious business name.  (See Hydrotech Systems, Ltd. v. Oasis Waterpark (1991) 52 Cal.3d 988, fn. 8.)  Defendant also asserts that Plaintiff lacks standing because the caption of the complaint does not identify Plaintiff as an individual doing business with a fictitious business name.  However, the complaint alleges that Plaintiff is a “firm” as opposed to a sole proprietorship (Compl., ¶ 9), and thus, Plaintiff could be a partnership or other unincorporated entity.  (See Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213–214 [facts in complaint presumed true for purposes of demurrer].)  Assuming arguendo that Plaintiff is a partnership and therefore an entity separate from its owner, the fact that the complaint names Plaintiff—rather than the owner—is not a proper ground for a demurrer for lack of capacity.  (See Parker v. Bowron (1953) 40 Cal.2d 344, 351.)  On the other hand, assuming arguendo that Plaintiff is a fictitious business name used by the owner, Holly Moose, the fact that the complaint does not identify Plaintiff as an individual “d/b/a/” its fictitious name is of no consequence because “a person may adopt any name in which to prosecute business, and may sue or be sued in such a name,” including the name he or she uses for business purposes.  (Emery v. Kipp (1908) 154 Cal. 83, 87, citation omitted; see Doe v. Lincoln Unified School District (2010) 188 Cal.App.4th 758, 775-777.)  Furthermore, if Holly Moose uses Plaintiff only as a fictitious business name, then she and Plaintiff are the same entity/person (see People v. Eastburn (2010) 189 Cal.App.4th 1501), and no facts in the complaint suggest that she lacks capacity.  (See Color-Vue, Inc. v. Abrams (1996) 44 Cal.App.4th 1599, 1604 [“Color-Vue”] [“[i]ncapacity is merely a legal disability, such as infancy or insanity, which deprives a party of the right to come into court”].)  Lastly, Defendant argues that Plaintiff is not a “real party in interest” and therefore lacks capacity.  It appears that Defendant confuses lack of legal capacity with lack of standing.  A demurrer for failure to state a claim—not for lack of capacity—may be predicated on the assertion that the named plaintiff is not the correct plaintiff.  (Parker v. Bowron (1953) 40 Cal.2d 344, 351.)  In any event, a party lacks standing to sue if he or she is not a real party in interest (Color-Vue, supra, at fn. 4), and since the complaint alleges that Defendant harmed Plaintiff, Plaintiff is a real party in interest—and therefore has standing—regardless of whether Plaintiff is a separate entity or Holly Moose’s alias.

Defendant’s demurrer to each cause of action and to the complaint as a whole on the ground of failure to allege sufficient facts to constitute a cause of action is OVERRULED.  With respect to the first cause of action, Defendant argues that Plaintiff does not “specifically” allege that its employees engage in shorthand court reporting, and therefore, Plaintiff has not alleged sufficient facts.  However, there is no heightened pleading requirement for unfair business practices claims (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 48), and the underlying statutes do not require Plaintiff to plead that Defendant actually performed shorthand court reporting.  The complaint sets forth three types of allegedly unlawful business practices:  (1) violations of the Moscone-Knox Act, (2) violations of professional corporation naming laws, and (3) unprofessional conduct.  (Compl., ¶¶ 44-46.)  Each of these alleged types of unlawful business practices are predicated on the allegation that Defendant is a professional corporation providing shorthand court reporting services in California, and therefore, it must comply with laws applicable to professional corporations and/or shorthand court reporting firms.  (Compl., ¶¶ 2-8 & 29-41.)  This allegation is sufficient to support the claim that Defendant must comply with the laws applicable to professional corporations and/or shorthand court reporting firms in California.  (See Corp. Code, §§ 13403, 13404.5, & 13410, and Bus. & Prof. Code, § 8046.)  As for the second cause of action, Defendant asserts that the complaint fails to state a claim for “unfair” business practices because it fails to state a claim for “unlawful” business practices.  This argument is unavailing “[b]ecause Business and Professions Code section 17200 is written in the disjunctive, [and] it establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent.”  (Shvarts v. Budget Group, Inc. (2000) 81 Cal.App.4th 1153, 1157, italics added.)  Turning to the third cause of action, Defendant first argues that only the injury of a competitor of a recipient of a secret payment or rebate—and not a competitor of the party providing a secret payment or rebate—supports a claim for a secret payment or rebate.  To the contrary, an unfair trade practice based on secret payments or rebates is actionable if it harms any “competitor,” which necessarily includes businesses that compete with the one offering the payment/rebate and the recepient(s) the payment/rebate.  (ABC International Traders, Inc. v. Matsushita Electric Corporation (1997) 14 Cal.4th 1247, 1267.)  Lastly, Defendant contends that Plaintiff “does not . . . allege any facts sufficient to support the bare allegation that the gift cards are given ‘in secret’ . . . or that gift cards are given to only a selected some of [Defendant’s] customers.”  Contrary to Defendant’s assertion, the complaint alleges that Defendant offers “secret rebates, gifts, and kickbacks . . . to some but not all of those who purchase its transcripts and other services,” (Compl., ¶ 39, italics added, see also ¶ 57), and “Defendant has sent, and currently sends, emails and other communications to secretaries offering valuable rebates and kickbacks—such as Disneyland packages and $200 gift cards—in exchange for booking one of Defendant’s reporters to report at a deposition or trial.”  (Id., ¶ 39.)  These allegations are sufficient to support the claim that Defendant provides secret gifts or rebates to some customers.