Case Number: BC672014 Hearing Date: March 16, 2018 Dept: 97

Superior Court of California
County of Los Angeles
Department 97

Oscar Dominguez,

Plaintiff,

v.

The Craftsman Bar and Kitchen, et al.,

Defendants.

Case No.: BC672014

Hearing Date: March 16, 2018

[TENTATIVE] order RE:

Plaintiff’s motion to Strike the Answer or in the Alternative Demurrer to Defendant’s Answer

On August 24, 2017, Plaintiff Oscar Dominguez (“Plaintiff”) filed a complaint alleging claims of premises liability. One of the Defendants named in the complaint is 127 Broadway LLC (“Defendant”). Defendant filed an Answer to the complaint on February 9, 2018. Plaintiff moves to strike the answer or in the alternative demurrers to the answer on grounds that Defendant is a suspended company under the California Revenue and Tax Code and thus cannot defend or maintain an action in this state. Defendant has filed an opposition. Plaintiff has not filed any reply.

Motion to Strike

As Plaintiff notes in his moving papers, a suspended corporation lacks the capacity to sue or defend itself in court. (See Palm Valley Homeowners Ass’n, Inc. v. Design MTC (2000) 85 CA4th 553, 560.) However, a suspended corporation may properly seek a continuance of the proceedings so that it may pay delinquent taxes and revive its capacity to defend. In Schwartz v. Magyar House, Inc. (1959) 168 Cal.App.2d 182, a corporation did not have the capacity to defend an action brought against it due to its suspended status. (Magyar, supra, 168 Cal.App.2d at pp. 184–185.) The corporation filed a motion for continuance in order to bring itself back to good standing and thus be able to defend the lawsuit. The trial court granted the motion, and the corporation subsequently revived itself and defended the action. On appeal, the plaintiff argued that the trial court should not have permitted the corporation to file a motion for continuance. (Id. at pp. 187–188.) The Court of Appeal affirmed, reasoning that even assuming it was improper for a suspended corporation to make any motion whatsoever, the trial court could nevertheless have granted the continuance on its own motion. (Id. at p. 189.)

In Cadle Co. v. World Wide Hospitality Furniture, Inc. (2006) 144 Cal.App.4th 504, the defendant was a suspended corporation. On the first day of trial, the plaintiff made a motion to preclude the suspended corporation from defending the suit. The trial court granted the motion and entered judgment against the corporation, despite its attorney’s protests that he was taken by surprise and was unaware that the corporation had been suspended. (Cadle, supra, 144 Cal.App.4th at p. 508.) The suspended corporation filed a notice of revivor within two days of trial. (Id. at p. 509.) On this record, the Court of Appeal determined that the trial court should have granted a brief continuance. (Id. at p. 512.)

In the instant case, Defendant has requested a continuance to allow it to be reinstated and defend this case on the merits. Defendant has provided a declaration from its certified public accountant attesting that all past income tax returns have been filed and all previously due income taxes have now been paid. (Kilwein Decl. ¶ 2.) Defendant is actively pursuing the payment of all penalty amounts so that it may request that the Franchise Tax Board reinstate Defendant. (Kilwein Decl. ¶ 2.) Defendant requests a continuance of 30 days to allow for Defendant’s reinstatement by the Franchise Tax Board. Pursuant to Schwartz and Cadle, the court hereby grants Defendant 127 Broadway LLC’s request for a continuance of the motion to strike. The motion to strike is continued to April 30, 2018 at 1:30 pm, Department 5, 312 North Spring Street, L.A., CA 90012 (the Court’s new location as of April 16, 2018). No later than April 17, 2018, Defendant must file and serve supplemental evidence of the status of its reinstatement, with a courtesy copy directly to Department 5, 312 North Spring Street, L.A., CA 90012. The Court will not consider late filed papers.

Demurrer

Plaintiff’s Demurrer to Defendant’s Answer is CONTINUED to April 30, 2018 at 1:30 pm, Department 5, 312 North Spring Street, L.A., CA 90012.

CCP § 430.41 requires a demurring party in certain civil actions, before filing the demurrer, to engage in a specified meet and confer process with the party who filed the pleading demurred to for the purpose of determining whether an agreement can be reached as to the filing of an amended pleading that would resolve the objections to be raised in the demurrer.

There is no indication from the moving papers submitted that Plaintiff engaged in a meet and confer effort before the demurrer was filed. As such, the demurrer is continued. Plaintiff is to file and serve a declaration in compliance with CCP § 430.41(a)(3) with a courtesy copy to Department 5, 312 North Spring Street, L.A., CA 90012, no later than April 17, 2018.

Late filed paper will not be considered by the court and will result in the demurrer being taken off calendar.

Conclusion and Order

No later than April 17, 2018, Defendant must file and serve supplemental evidence of the status of its reinstatement, with a courtesy copy directly to Department 5, 312 North Spring Street, L.A., CA 90012. Plaintiff is to file and serve a declaration in compliance with CCP § 430.41(a)(3) with a courtesy copy to Department 5, 312 North Spring Street, L.A., CA 90012, no later than April 17, 2018.

This matter is continued to April 30, 2018 at 1:30 pm, Department 5, 312 North Spring Street, L.A., CA 90012.

Plaintiff is ordered to provide notice of this order.

DATED: March 16, 2018 ___________________________

Elaine Lu

Judge of the Superior Court