Judge: John C. Gastelum, Case: 22-01272045, Date: 2023-05-17 Tentative Ruling
(1) Demurrer to Cross-Complaint (2) Motion – Other (3) Motion to Strike Answer (4) Application for RTAO/WOA (5) CMC
Tentative Ruling: (2) Plaintiffs LCAviation SA, CSAviation SARL, and Daniel Colin’s unopposed Motion for Service by Publication of Defendant Nicholas Leach is GRANTED pursuant to Code of Civil Procedure section 415.50 and Government Code section 6064.
Publication is to be made in the Los Angeles Times.
Plaintiffs to give notice.
(1, 3) Cross-Defendants LCAviation SA, CSAviation SARL, and Daniel Colin filed a (1) Demurrer to the Cross-Complaint and (3) Motion to Strike the Cross-Complaint. Both motions present one argument: that Cross-Complainant Skybus Jet Cargo, Inc. cannot maintain or defend a lawsuit in California because its corporate status has been suspended and/or forfeited and it therefore lacks the capacity to sue pursuant to Code of Civil Procedure section 430.10(b).
Code of Civil Procedure section 430.10(b) states:
“The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of the following grounds . . . (b) The person who filed the pleading does not have the legal capacity to sue.” (Code Civ. Proc., § 430.10, subd. (b).)
Revenue and Taxation Code section 23301 establishes that a corporation that has had its powers suspended lacks the legal capacity to prosecute or defendant a civil action during its suspension. (Rev. & Tax. Code, § 23301.)
“The purpose of Revenue and Taxation Code section 23301 is to prohibit the delinquent corporation from enjoying the ordinary privileges of a going concern [citation], and to pressure it to pay its taxes [citation].” (Casiopea Bovet, LLC v. Chiang (2017) 12 Cal.App.5th 656, 662 [citations omitted].)
Importantly, “the revival of corporate powers retroactively validates any procedural steps taken on behalf of the corporation in the prosecution or defense of a lawsuit while the corporation was under suspension.” (Tabarrejo v. Superior Court (2014) 232 Cal.App.4th 849, 862.)
Here, Cross-Defendants establish that as of the time the Demurrer and Motion to Strike were filed, Cross-Complainant did not have standing to maintain its Cross-Complaint. However, in opposition, Cross-Complainant establishes that this issue has been cured, i.e., Cross-Complainant Skybus Jet Cargo, Inc. is now in compliance with the requisite statutes, has revived its corporate powers, and therefore has standing to bring the Cross-Complaint.
The Demurrer to the Cross-Complaint is OVERRULED.
The Motion to Strike the Cross-Complaint is DENIED.
Cross-Defendants’ Request for Judicial Notice is GRANTED.
Cross-Complainant to give notice.
(4-5) (ROA 14) Plaintiffs seek a writ of attachment against Defendant Skybus Jet Cargo, Inc. in the amount of $200,000.00. Attachment law statutes are subject to strict construction, and where a court is required to exercise its jurisdiction in a particular manner or subject to certain limitations, an act beyond those limits is in excess of its jurisdiction and void. (Pacific Design Sciences Corp. v. Superior Court (2004) 121 Cal.App.4th 1100, 1106.)
Under Code of Civil Procedure section 483.010, attachment may be issued only if the claim sued upon is:
(1) a claim for money based on a contract (express or implied);
(2) the claim is for a fixed or readily ascertainable amount not less than $500, exclusive of costs, interest and attorney fees;
(3) the claim is not secured by real property (or was originally so secured, but due to no fault of plaintiff has become valueless, or inadequate to secure the amount owed on the claim, so as to allow attachment for the unsecured portion); and
(4) if the defendant is a natural person, that the claim arises out of the conduct by that defendant of a trade, business, or profession (i.e. not consumer transactions).
The burden is on the applicant to establish each element necessary for an attachment order by a preponderance of the evidence. (Loeb & Loeb v. Beverly Glen Music, Inc. (1985) 166 Cal.App.3d 1110, 1116.)
In addition, under Code of Civil Procedure section 484.090 an attachment order may be issued only if the court also finds all of the following:
(1) The claim is one upon which an attachment may be issued;
(2) The moving party has established the probable validity of the claim upon which the attachment is based (i.e. it is more likely than not that plaintiff will prevail on the claim);
(3) The attachment is not sought for a purpose other than the recovery on the claim; and
(4) The amount to be secured by the attachment is greater than zero.
Additionally, the facts stated in each affidavit in support of an application for writ of attachment shall be set forth with particularity. (Code Civ. Proc., §482.040.)
The opposition may consist of challenges to the factual or legal basis of the claim upon which attachment is sought, or an asserted offset, or claim of exemption. (See Code Civ. Proc., § 484.060(a); Goldstein v. Barak Const. (2008) 164 Cal.App.4th 845, 852.)
Defendant may challenge the amount to be secured by WOA by showing that:
• A money judgment held by defendant against plaintiff remains unsatisfied;
• A cross-complaint based on an attachable claim has been filed against plaintiff;
• An attachable claim has been asserted as a defense in the answer pursuant to CCP § 431.70; or
• Plaintiff holds a nonattachable security interest in defendant's property, and/or the underlying security has been devalued through plaintiff's acts (or those of the security-holder if different from plaintiff). (Code Civ. Proc., § 483.015(b).)
In this instance, Plaintiff has submitted the Declaration of Daniel Colin who is the Administrateur Général of LCAviation SA (“LCA”) and the Chief Executive officer of CSAviation SARL (“CSA”). (Decl. of Coline¶1.) He declares that:
4. Pursuant to the Agreement, Defendants agreed to make payments of $50,000 to Plaintiffs on or before each of the following dates: November 15, 2021; December 15, 2021; January 1, 2022; February 1, 2022; March 1, 2022; and April 1, 2022. However, Defendants failed to make the initial payment of $50,000 due to Plaintiffs on or before November 15, 2021, and again failed to make the second payment of $50,000 due to Plaintiffs on or before December 15, 2021. Rather, Defendants made four payments of $25,000 each to Plaintiffs on or about November 16, 2021, December 13, 2021, February 1, 2022, and May 12, 2022. Ultimately, Defendants only paid Plaintiffs $100,000 of the $300,000 that Defendants owe to Plaintiffs under the Agreement. By contrast, Plaintiffs have performed or have been ready, willing, and able to perform all of their obligations under the Agreement.
Notably, the settlement agreement attached to the Complaint is between Skybus Jet Cargo, Inc. and Nicholas Leach on the one hand and LCAviation SA, SCAviation SARL, and Daniel Colin on the other hand. (Complaint Ex. 1).
As to Defendant Skybus Jet Cargo, Inc., the Declaration of Colin adequately sets for and supports the elements set forth above. Defendant Skybus Jet Cargo Inc. owed $200,000 as of 5-12-2022 based on a settlement agreement.
HOWEVER, Defendant Skybus has submitted a timely opposition arguing Plaintiff breached the at issue contract, and offset.
Indeed, on 12-23-2022 Skybus Jet Cargo, Inc. filed a Cross-Complaint against Plaintiffs for Breach of Contract, Fraud—Intentional Misrepresentation; and Fraud-Negligent Misrepresentation. The Cross-Complaint explains that pursuant to the Agreement, Cross-Defendants were to provide Skybus with certain records relating to the aircraft in exchange for the $300K. Although Skybus provided $100K, Cross-Defendants have not turned over the records as agreed. Cross-Complaint¶¶13, 14. The “agreement” to which the Cross-Complaint refers is attached to the Cross-Complaint as Ex. A , and is the same contract referred to in the Complaint. The Court notes Skybus also pleads “offset” as its 11th Affirmative Defense in its Answer to the Complaint.
Notably, in reviewing the contract, it states, “WHEREAS, upon receipt of the second payment from Skybus, CSA shall submit to Skybus the full, unedited Aircraft records;…” [Cross-Complaint, Ex. A.] The first payment was for $50,000 and the second payment was for $50,000. Therefore, pursuant to the terms of the agreement, after the $100,000 was paid (which all parties agree was in fact paid), CSA was supposed to turn over records.
However, the Declaration of Poindexter (Technical Manager of Skybus), confirms that although the $100K was paid, no records were provided. (Decl. of Poindexter¶7.)
As such, it does not appear that Plaintiffs can establish a probable validity of their breach of contract claim because it appears they may have breached the at issue contract first.
Therefore, the application directed to Skybus Jet Cargo, Inc. is DENIED.
Plaintiffs’ RFJN is denied as unnecessary to the Court’s ruling.
Plaintiffs’ Objections to Evidence filed under ROA 50 are overruled.
Defendant to give notice.