2018-00224653-CU-PP

Parker Turner Albright, PC vs. Port J. Parker

Nature of Proceeding: Hearing on Demurrer

Filed By: Alves, Suzanne M.

Respondent Port J. Parker’s Demurrer to the Petition to Appoint Appraisers pursuant to Corporations Code section 2000 is overruled.

The Request for Judicial Notice filed January 24, 2018 is granted as to Exhibits A and C but denied as to Exhibit B. The Joint Supplemental Request for Judicial Notice filed on February 14, 2018 is denied. It is not appropriate to consider extrinsic evidence such as the Declaration of Kohls in support of the Petition to Appoint Appraisers or the Compendium of Evidence in Support of Respondent’s Motion for Appointment of Receiver in ruling on a demurrer.

On February 16, 2018 (finalized February 20, 2018) the Court granted the Petition to Appoint Appraisers in order to value the share of respondent in the corporation pursuant to Corporations Code section 2000 buy out provisions. Corporations Code Section 2000 provides an express mechanism which permits the other owner or owners of a corporation to avoid such a dissolution by buying out the owner or who initiated the dissolution process. (See Corp. Code, § 2000.) Under section 2000, the party who initiates the dissolution process is called the “moving party” while the party wishing to avoid the dissolution by buying out the moving party is called the “purchasing party.” (Ibid.) The procedure for determining the price to be paid for respondent Parker’s interests in the Company requires the appointment of three disinterested appraisers who will appraise the fair value of the shares of the Corporation owned by Parker. (Corp. Code, § 2000, subd. (c).) The appraisers then provide their appraisals to the court. (Ibid.) Effective upon the filing of the Buy-Out Petition, the dissolution and winding up process shall be stayed. (Corp. Code, § 2000, subd. (b).)

On February 20 the Court affirmed, with modification, its tentative ruling for the February 16 calendar, granting PTA, PC’s Petition to Appoint Appraisers. In making

this ruling, the Court necessarily found that the Petition met all of the requirements of the Corporations Code section 2000.

In this demurrer, respondent relies on the same argument raised in opposition to the Petition; that there has been a judicial admission by petitioner that the corporation is insolvent, and therefore a buy-out proceeding is improper. The Court rejected the argument that there had been any judicial admission as to the value of the corporation on the date of the valuation. (See Submitted ruling dated February 20, 2018.)

The only issue that can be raised by demurrer is whether the facts, as pled, state a valid cause of action – not whether the allegations are true. (Serrano v. Priest (1971) 5 Cal.3d 584, 591.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” (Code Civ. Proc, §§ 430.30, 430.70.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (McKenney v. Purepac Pharm. Co. (2008) 162 Cal.App.4th 72, 79; Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) This judge’s ruling granting the Petition to Appoint Appraiser recognized that the value of Port Parker’s shares on the date of the valuation, December 29, 2017, is a disputed fact. The Court does not determine disputed facts in determining whether a cause of action is stated.

The motion to strike is denied. See related item on this day’s calendar.