Judge: Frank M. Tavelman, Case: 24BBCV00045, Date: 2025-05-30 Tentative Ruling

Case Number: 24BBCV00045    Hearing Date: May 30, 2025    Dept: A

MOTION FOR JUDGMENT ON THE PLEADINGS

 NOTICE:

The Court is not requesting oral argument on this matter.  The Court is guided by California Rules of Court, Rule 3.1308(a)(1) whereby notice of intent to appear is requested.  Unless the Court directs argument in the Tentative Ruling, no argument is required and any party seeking argument should notify all other parties and the court by 4:00 p.m. on the court day before the hearing of the party’s intention to appear and argue.  The tentative ruling will become the ruling of the court if no argument is received.  

Notice may be given either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412.

ALLEGATIONS: 

Coaction Specialty Insurance Group, Inc. f/k/a/ ProSight Specialty Insurance Solutions, LLC (Coaction) brings this action against Sol Reliable, Inc. (Defendant). Coaction claims that it is the owner of various worker’s compensation policies issued to Defendant. Coaction states that its audit of these policies revealed that Defendant had underreported its coverage resulting in an outstanding balance of $304,625.15.

Before the Court is Defendant’s Motion for Judgment on the Pleadings as to the entire Complaint and each cause of action therein. Defendant argues that the motion should be granted as to the entire complaint, as Coaction has failed to allege sufficient facts to establish their standing to bring this action. Defendant further argues that the motion should be granted as to each cause of action for failure to allege sufficient facts in support. Coaction opposes the motion and Defendant replies.

ANALYSIS: 

I.                    LEGAL STANDARD 

A defendant may bring a statutory motion for judgment on the pleadings where the court has no jurisdiction over the subject of the cause of action alleged in the complaint or the complaint does not state facts sufficient to constitute a cause of action against that defendant. (C.C.P. § 438(c)(1)(B).) A non-statutory motion for judgment on the pleadings may be made any time before or during trial. (Stoops v. Abbassi (2002) 100 Cal.App.4th 644, 650.) “Such motion may be made on the same ground as those supporting a general demurrer, i.e., that the pleading at issue fails to state facts sufficient to constitute a legally cognizable claim or defense.” (Id.)

“In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (C.C.P. § 452; see also Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601.) “When a court evaluates a complaint, the plaintiff is entitled to reasonable inferences from the facts pled.” (Duval v. Board of Tr. (2001) 93 Cal.App.4th 902, 906.) “In deciding or reviewing a judgment on the pleadings, all properly pleaded material facts are deemed to be true, as well as all facts that may be implied or inferred from those expressly alleged.” (Fire Ins. Exch. v. Superior Court (2004) 116 Cal.App.4th 446, 452.)

“In the case of either a demurrer or a motion for judgment on the pleadings, leave to amend should be granted if there is any reasonable possibility that the plaintiff can state a good cause of action.” (Gami v. Mullikin Medical Ctr. (1993) 18 Cal.App.4th 870, 876.)

II.                 MERITS

Meet and Confer

C.C.P. § 439(a) requires that the moving party meet and confer with the party who filed the pleading that is subject to the motion for judgment on the pleadings. Upon review, the Court finds the requirements were met here. (Lopez Decl. ¶ 3.)

MJOP to Entire Complaint for Lack of Standing – Granted with Leave to Amend

“Standing is the threshold element required to state a cause of action and, thus, lack of standing may be raised by demurrer.” (Martin v. Bridgeport Community Assn., Inc. (2009) 173 Cal.App.4th 1024, 1031.) “To have standing to sue, a person, or those whom he properly represents, must have a real interest in the ultimate adjudication because he has either suffered or is about to suffer any injury of sufficient magnitude reasonably to assure that all of the relevant facts and issues will be adequately presented.” (Id. at 1031 [citations and internal quotation marks omitted].) C.C.P. § 367 requires that every action must be prosecuted in the name of the real party in interest, that is one who has “an actual and substantial interest in the subject matter of the action and who would be benefited or injured by the judgment in the action.” (Id. at 1031-1032.)

Here, Defendant argues that Coaction’s Complaint should be subject to a judgment on the pleading because Coaction lacks capacity to bring these claims. More specifically, Defendant argues that Coaction is not the proper entity in possession of the accounts sued upon. Defendant argues that Exhibit A to the Complaint “…identifies only two entities, neither of which are Plaintiff.” (Mot. p. 3.) For reasons set forth below, the Court finds this argument to be persuasive.

Exhibit A to the Complaint appears to be two separate documents. The first document appears to be an endorsement to a “Deductible Liability Insurance” agreement. (Compl. p. 7.) Upon review there appears to be no identifying information for the issuer of this endorsement or the holder of the policy. The only identifying information present on this page is the policy number PK201800011475. The second document attached as Exhibit A is labeled “Final Audit Statement” and does identify the “producer” of the policy as “ProSight Specialty Insurance Solutions, LLC”. (Compl. p. 8.) The document also identifies the named insured as “Sol Reliable, Inc.”. The policy number listed on this document is WC201800014902, a different number than that on the prior page.

The above two documents are the only attachments to Coaction’s complaint. In the Court’s view, it does not appear from these documents that Coaction has sufficiently alleged its standing to bring the claims set forth in its Complaint. The Court explains further below.

Each of the claims set forth by Coaction are identical in the amount they claim is owed, $304,625.15. (See Compl. ¶¶ 6,12, 14, 17.) Coaction alleges that this is an amount due and owing from a “written agreement between Plaintiff and Defendants” entered into August 1, 2018. (Compl. ¶ 5.) This amount does not match any of the amounts listed in the “Final Audit Statement” attached as Exhibit A. It is entirely unclear where the $304,625.15 came from, and whether it is based on contract between Coaction and Defendant.

It is true that Coaction has sued as the entity formerly known as Prosight Specialty Insurance, the entity appearing on the “Final Audit Statement”. At the same time, the discrepancy between the balance claimed in the Complaint and the balance of the “Final Audit Statement” creates uncertainty that Coaction is the proper entity to bring an action for the amount claimed in the Complaint.

For their part, Coaction argues that they are but one company in a conglomerate of insurance companies. Coaction argues that they own and operate many insurance companies such as, “…New York Marine and General Insurance Company and Gotham Insurance Company, which wrote some of the multiple policies in this matter for the benefit of the Defendant.” (Opp. p. 4.)

The Court finds this argument to be more obscuring than clarifying. Whether Coaction owns subsidiaries who issued insurance policies to Defendant upon which Coaction seeks to collect would necessarily require the presentation of evidence beyond that available upon MJOP. Coaction’s ownership and the various policies issued are not matters present on the face of the pleadings or judicially noticed. Coactions argument that they have “…the right to collect on all accounts receivables of its subsidiaries” is simply not verifiable from the information properly considered upon MJOP.

In short, the Court finds Coaction has failed to sufficiently allege they are the appropriate entity to bring this action. At present the pleadings are uncertain as which accounts are at issue and who owns them. This ruling is not meant to cast doubt on Coaction’s ownership of the underlying accounts, it is only a finding that Coaction has yet to sufficiently set forth its ownership. If Coaction is correct that its subsidiaries issued the accounts, it would appear that rectifying the present defects would simply require Coaction to procure those policy documents.

Accordingly, the MJOP to the entire Complaint for lack of standing is GRANTED with 20 days’ leave to amend. As the Court has granted the MJOP with leave to amend to the entire Complaint on grounds of standing, the MJOP to each individual cause of action for failure to allege sufficient facts is MOOT. 

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RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records. 

ORDER 

Sol reliable, Inc.’s Motion for Judgment on the Pleadings came on regularly for hearing on May 30, 2025, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows: 

THE MOTION FOR JUDGMENT ON THE PLEADINGS IS GRANTED WITH 20 DAYS’ LEAVE TO AMEND.

TRIAL SETTING CONFERENCE SET FOR TODAY’S DATE IS VACATED.

CASE MANAGEMENT CONFERENCE IS SET FOR SEPTEMBER 8, 2025 AT 9:00 AM.

SOL RELIABLE, INC. TO GIVE NOTICE.  

IT IS SO ORDERED.