Case Name: Bhandari v. Seva Global, Inc., et al.
Case No.: 1-14-CV-262796

Plaintiff/cross-defendant Ramesh Bhandari (“Bhandari”) demurs to the first amended cross-complaint (“FACC”) filed by defendant/cross-complainant Srivinas Battu (“Battu”) and moves to strike portions contained therein.

This is an action for fraud and negligence. Bhandari was formerly employed by Battu and defendant Seva Global, Inc. as an assistant general manager and floor manager at Arka Restaurant. (FACC, ¶ 11.) Battu alleges that Bhandari had a duty to maintain the premises in proper condition and failed to do so. Battu filed the FACC on December 15, 2014, asserting the following causes of action: (1) gross negligence; (2) breach of fiduciary duty; and (3) misappropriation of trade secrets.

On January 8, 2015, Bhandari filed the instant demurrer to the FACC and each of the three causes of action asserted therein on the grounds of lack of legal capacity to sue, defect or misjoinder of parties, failure to state facts sufficient to constitute a cause of action and uncertainty. (Code Civ. Proc., § 430.10, subds. (b), (d), (e) and (f).) Bhandari also filed the motion to strike the third cause of action. (Code Civ. Proc., §§ 435 and 436.)

Bhandari’s motion to strike the third cause of action (misappropriation of trade secrets) is GRANTED. Battu was not permitted to add this cause of action to the FACC without leave of court and was only allowed to amend causes of action to which the demurrer to his prior pleading was sustained. (See People v. Clausen (1967) 248 Cal.App.2d 770, 785-786 [where a court grants leave to amend after sustaining a demurrer, “such granting of leave to amend must be construed as permission to the pleader to amend the cause of action which he pleaded in the pleading to which the demurrer has been sustained”].) Consequently, Bhandari’s demurrer to this cause of action is MOOT.

Bhadari’s demurrer to the first (gross negligence) and second (breach of fiduciary duty) causes of action on the grounds of lack of capacity to sue, misjoinder or defect of parties and uncertainty is OVERRULED.

Bhandari’s demurrer to the first and second causes of action on the ground of failure to state facts sufficient to constitute a cause of action is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND. A plaintiff must be the “real party in interest” in order to have standing to sue on a particular claim. (See Code Civ. Proc., § 367 [“[e]very action must be prosecuted in the name of the real party in interest …”]; see also Dino v. Pelayo (2006) 145 Cal.App.4th 347, 352, fn. 2.) Generally, the real party in interest is the person or entity who has the right to sue under the substantive law and owns or holds title to the claim or property involved. (Gantman v. United Pac. Ins. Co. (1991) 232 Cal.App.3d 1560, 1566.) Claims for injury or damage to a corporation or its property belong to the corporation, not its stockholders. (See Jones v. H.F. Ahmanson & Co. (1969) 1 Cal.3d 93, 107.)

Here, Battu is alleged to be the owner and shareholder of defendant Seva Global, Inc., Bhandari’s former employer. (FACC, ¶¶ 1, 3 and 11.) The claims asserted in the FACC are based on the alleged breach of obligations arising out of the employer-employee relationship. Accordingly, these claims belong to Seva Global, Inc., Bhandari’s alleged employer, and not Battu, individually. Battu therefore lacks standing to pursue these claims against Bhandari. Battu’s allegations regarding what may or may not be determined in the underlying action with regard to the identity of Bhadari’s employer do not alter his lack of standing as established by the other allegations of the FACC.