Judge: Jon R. Takasugi, Case: 22STCV17297, Date: 2023-05-05 Tentative Ruling

Case Number: 22STCV17297    Hearing Date: May 5, 2023    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

            Defendant’s demurrer is SUSTAINED, WITHOUT LEAVE TO AMEND as to RHC Automotive, Inc. Defendant’s demurrer is MOOT as to the other 10 since-dismissed Plaintiffs.

            Defendant’s motion to strike is DENIED.

            On 5/25/2022, 14 Plaintiffs filed suit against Glaser Weil Fink Howard Avchen & Shapiro, LLP (Defendant) , alleging: (1) legal malpractice; (2) breach of fiduciary duty; and (3) declaratory relief.

            Now, Defendant demurs to Plaintiffs’ Complaint, and moves to strike portions of the Complaint.

Discussion

            Defendant argues that certain Plaintiffs cannot state a claim against Defendant either because their claim is time-barred or because they lack the capacity to sue:

1)     RHN, Inc.: Statute of Limitations and Lack of Capacity

2)     RHC Automotive, Inc.: Statute of Limitations

3)     R&H Automotive Group, Inc.: Statute of Limitations and Lack of Capacity

4)     NBA Automotive, Inc.: Statute of Limitations and Lack of Capacity

5)     H.S.K Investments, LLC: Statute of Limitations and Lack of Capacity

6)     737 N. La Brea, LLC: Statute of Limitations and Lack of Capacity

7)     3170 Cherry Avenue Property, LLC: Statute of Limitations and Lack of Capacity

8)     Centinela Carwash Properties, LLC: Statute of Limitations and Lack of Capacity

9)     Hailey Reinsurance Company: Statute of Limitations and Lack of Capacity

10) Redondo Prop, LLC: Statute of Limitations

11) KIP Prop, LLC: Statute of Limitations

Under California law, a suspended corporation or foreign limited liability company do not have the legal capacity to sue. (Corp.Code, §§ 2205, subd. (c) & 5008.6, subd. (c), Rev. & Tax. Code §§ 23301, 23301.5.) Moreover, a foreign entity which lacks capacity to sue in its home forum, also lacks capacity to sue in California, because it has no greater capacity to sue in California than in its home forum. (See e.g., The Cap. Gold Grp., Inc. v. Nortier (2009) 176 Cal.App.4th 1119, 1127.) [a corporation that lacks the capacity to sue in its home state based on a lack of corporate status, also lacks capacity to sue in California, because it has no greater capacity to sue in California than in its home state].)

Here, Defendant submitted judicially noticed documents showing Plaintiffs 1-5 are either currently suspended by the California Franchise Tax Board (CFTB), are not registered with the California Secretary of State, or are unable to commence legal proceedings under home forum law. (Motion, 4: 5; RJN Exhs. 15, 16, 18, 19, 31, 21, 22, 32, 24,25,33, 27, 28, 29, 34.) As such, the Court agrees these Plaintiffs current lack the capacity to bring this suit.

As for Plaintiffs 7 and 8, Plaintiffs allege that Defendant’s representation ceased in May 2021. As such, they had one year from that date to file suit based for alleged malpractice in representation. (See CCP § 340.6.) While this Complaint was filed on 5/25/2022, Defendant submitted documentation to show that they were both suspended as of the 5/25/2022 filing of Complaint. As such, they lacked legal capacity at the time of filing to initiate this action.

In opposition, notices of dismissal were filed for 10 of the 11 challenged Plaintiffs here. In opposition, the remaining Plaintiffs contend they cannot dismiss RHC Automotive, Inc. because “is not listed as a plaintiff on the Los Angeles Superior Court website (likely because it was named as a plaintiff only on the first page of the Complaint, but not named in the body of the pleading), and thus no Request for Dismissal was filed for this entity.” (Opposition Declaration of Abigail Page, ¶ 3, p.1:16-17.) However, the Court agrees with Defendant that “the limitations of the Court’s website cannot limit the Court’s ability to resolve all issues raised by Glaser Weil’s demurrer. The Court must enter an order sustaining Glaser Weil’s demurrer to and dismissing the complaint by plaintiff RHC AUTOMOTIVE, INC., without leave to amend, because plaintiffs included it in the caption of their complaint as a party to the action.” (Reply, 2: 13-17.)

Based on the foregoing, Defendants’ demurrer is moot as to all dismissed Plaintiffs., and is sustained, without leave to amend, as to RHC Automotive, Inc.

Motion to Strike

            Defendant argues that the remaining Plaintiffs (i.e., RHH Automotive, Inc., Hooman Nissani, and Melody Nissani) have not alleged sufficient facts to sustain a prayer for punitive damages. However, Defendant did not demur to the substantive claims asserted by the remaining Plaintiffs. As such, Plaintiffs have active claims pending for legal malpractice and breach of fiduciary duty. As such, Plaintiffs have alleged sufficient facts at the pleading stage to show “despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Civ. Code, § 3294, subd. (c)(1).)  Whether or not Defendant’s conduct, in fact, rises to this level is a factual determination not properly decided at this stage.

            Based on the foregoing, Defendant’s motion to strike is denied.

It is so ordered.

Dated:  May    , 2023

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar. 

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