Judge: Cherol J. Nellon, Case: 23STCV12715, Date: 2023-10-05 Tentative Ruling

Case Number: 23STCV12715    Hearing Date: October 5, 2023    Dept: 14

(1)       Motion to Strike

 

            Defendants Firm, Bowers, Abeles, and Bayles now move this court for an order striking the Complaint, on the grounds that it should have been filed in the related case as a compulsory cross-complaint. Defendants also seek the removal of Plaintiff International Implants, LLC (“International”) on the basis that it is a suspended company.

 

Decision

 

            Defendants’ Request for Judicial Notice is GRANTED as to Exhibits 9-10. It is otherwise GRANTED only as to the existence of the documents and the fact that certain statements were made, not as to the truth of those statements. Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882.

 

            Plaintiffs’ Request for Judicial Notice is GRANTED under the same conditions.

 

            The motion is GRANTED, without leave to amend, as to Plaintiffs Michael Dennis Drobot (“Drobot”) and Healthsmart Pacific, Inc. (“Healthsmart”).

 

It is GRANTED, with leave to amend as to Plaintiff International.

 

Governing Statute

 

            Code of Civil Procedure § 426.30 provides that:

 

“(a) Except as otherwise provided by statute, if a party against whom a complaint has been filed and served fails to allege in a cross-complaint any related cause of action which (at the time of serving his answer to the complaint) he has against the plaintiff, such party may not thereafter in any other action assert against the plaintiff the related cause of action not pleaded.

 

(b) This section does not apply if either of the following are established:

(1) The court in which the action is pending does not have jurisdiction to render a personal judgment against the person who failed to plead the related cause of action.

(2) The person who failed to plead the related cause of action did not file an answer to the complaint against him.”

 

A claim is not subject to the compulsory cross-complaint bar if the plaintiff had not yet discovered it when the operative answer was filed in the earlier case. Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 968-972.

 

Discussion

 

            Plaintiffs argue that this motion to strike is a “disguised demurrer” and should be denied on that basis. While the issue of the compulsory cross-complaint bar is usually handled on a demurrer, there is no rule of law which requires it to be so handled. Demurrers are meant to handle substantive issues, while motions to strike may be used for procedural ones. Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 528-529.

 

Enforcement of the compulsory cross-complaint rule could well be viewed as a procedural matter. And in any event, the nature of a motion is determined by the nature of the substantive relief sought, not by any label or other formality. California Correctional Peace Officers Assn. v. Virga (2010) 181 Cal.App.4th 30, 43 (quoting Sole Energy Co. v. Petrominerals Corp. (2005) 128 Cal.App.4th 187, 193). The court will not deny the motion simply because it carries the wrong title.

 

            There is no real dispute between the parties that the claims in this case are “related,” within the meaning of Section 426.30(a), to the claims in Case No. 19 STCV 26678. Plaintiffs’ argument is instead that they didn’t “have” these claims at the time they served their Answer in that case because they hadn’t discovered them yet.

 

Plaintiffs Drobot and Healthsmart

 

            In Case No. 19 STCV 26678, the operative First Amended Complaint was filed on September 16, 2021. Only Plaintiffs Drobot and Healthsmart filed an Answer to that pleading, on July 11, 2023.

 

            The complaint in this case was filed on June 2, 2023, a full month before the operative answer was filed in Case No. 19 STCV 26678. Therefore, Plaintiffs Drobot and Healthsmart had discovered their claims when they filed their operative answer. Their claims in this case are therefore subject to the compulsory cross-complaint bar.

 

            In their opposition, Plaintiffs ask this court to permit them to file their claims as a cross-complaint in Case No. 19 STCV 26678. To obtain such relief, Plaintiffs will need to file a motion in that case. No such motion has ever been filed there.

 

Plaintiff International

 

            In Case No. 19 STCV 26678, the only answer filed by Plaintiff International, on September 27, 2019, was made in response to an earlier version of the complaint. In the intervening time, that answer was stricken, and default entered against International, based on its suspended status.

 

            It is not clear whether Plaintiff International had discovered its claims by September 27, 2019. The date on which a party actually discovers (or should have discovered) a legal claim represents a classic factual question, not amenable to resolution at the pleadings stage. And while International’s answer in the earlier case did assert that the Firm hadn’t performed the services for which they sought payment, such a pleading is not conclusive as a matter of law.

 

            It is common practice, when filing an Answer, to plead large numbers of affirmative defenses in a conclusory fashion, so as to avoid any subsequent waiver argument. The related case is a breach of contract action. Pleading the opponent’s lack of performance is an entirely reflexive response to such an action.

 

            What remains true of Defendant International, however, is its suspended status. So long as it remains suspended, it cannot prosecute this case. Tabarrejo v. Superior Court (2014) 232 Cal.App.4th 849, 861-862. Counsel have known of Defendant International’s suspended status, since its default was entered in Case No. 19 STCV 26678 on January 4 of this year. They will be given one chance to revive it.

 

Conclusion

 

            As to Plaintiffs Drobot and Healthsmart, this is a compulsory cross-complaint which ought to have been filed in the earlier action. Therefore, the motion to strike their claims is GRANTED, without leave to amend.

 

            As to Plaintiff International, they are currently suspended and therefore legally barred from prosecuting this case. Therefore, the motion to strike their claims is GRANTED, with 30 days leave to amend.

 

(2)       Demurrer

 

Defendants Firm, Bowers, Abeles, and Bayles now demur to the Complaint on the grounds that it is barred by the statute of limitations and fails to state facts sufficient to constitute a claim for violation of Penal Code § 496(c).

 

Decision

 

            The demurrer is TAKEN OFF-CALENDAR as MOOT.