TENTATIVE RULING

Plaintiff and Cross-Defendant Robert Gordon’s Motion for Judgment on the Pleadings is GRANTED without leave to amend. 

Plaintiff and Cross-Defendant Robert Gordon to give notice.

REASONING

Legal Standard

Under Code Civ. Proc., § 438, subd. (c)(1)(B), a defendant may move for judgment on the pleadings if the complaint does not state facts sufficient to constitute a cause of action against that defendant.  (Code Civ. Proc., § 438, subd. (c)(1)(B).) A defendant includes a cross-defendant. (Code Civ. Proc., § 438, subd. (a)(3).) The standard for granting a motion for judgment on the pleadings is essentially the same as that applicable to a general demurrer.  (Burnett v. Chimney Sweep (2004) 123 Cal.App.4th 1057, 1064.) “The court must assume the truth of all factual allegations in the complaint, along with matters subject to judicial notice.” (Wise v. Pacific Gas & Electric Co. (2005) 132 Cal.App.4th. 725, 738.) The court must view the allegations in the light most favorable to the plaintiff. (Edwards v. Centex Real Estate Corp. (1997) 53 Cal.App.4th 15, 28.) “Whether a motion for judgment on the pleadings should be granted with or without leave to amend depends on whether there is a reasonable possibility that the defect can be cured by amendment . . . .” (Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th 1395, 1402.)   

Meet and Confer Requirement 

“Before filing a motion for judgment on the pleadings . . . the moving party shall meet and confer in person, by telephone, or by video conference with the party who filed the pleading that is subject to the motion for judgment on the pleadings for the purpose of determining if an agreement can be reached that resolves the claims raised in the motion for judgment on the pleadings.” (Code Civ. Proc., § 439, subd. (a).) 

The Court finds that the meet and confer requirement has been satisfied. (Boren Decl. ¶ 4.) 

Analysis 

The crux of the instant motion is that a corporation cannot directly sue a 50% shareholder in a company. (Memo of Ps and As at p. 2:2-21.) 

The Court finds that Robert’s reliance on Anmaco, Inc. v. Bohlken (1993) 13 Cal.App.4th 891, 899-900 (Anmaco) is persuasive. Anmaco stands for the rule that there is “no presumptive or implied authority in the president to institute litigation in the name of the corporation against a co-director and equal shareholder. Pressing the corporation into litigation as a plaintiff is inappropriate where the other shareholder-director could claim equal authority to bring suit in the corporate name . . . [t]he proper vehicle for such a suit, when the gravamen of the complaint is injury to the corporation, is a shareholder’s derivative action.” (Anmaco, supra, 13 Cal.App.4th 891, 899-900.) 

AVM’s reliance on Coldren v. Hart, King & Coldren, Inc. (2015) 239 Cal.App.4th 237, 240 (Coldren) is inapposite as such case concerned whether counsel should be disqualified from representing two equal shareholders of a corporation. (Coldren, supra, 239 Cal.App.4th 237, 240.) 

The Court acknowledges that “[a] party against whom a cause of action has been asserted in a complaint . . . may file a cross-complaint setting forth . . . [a]ny cause of action he has against any of the parties who filed the complaint . . . against him.” (Code Civ. Proc., § 428.10, subd. (a).) However, where a cross-defendant is an equal director and shareholder at the time an action is filed, a corporation cannot file a lawsuit against such cross-defendant. (Icon Internet Media, Inc. v. Johnson (C.D. Cal. 2021) 2021 WL 6104314 at *3.) 

Here, Robert is a 50 percent shareholder of AVM and is an equal director of AVM. (Cross-Compl. ¶ 4.) The crux of the cross-complaint is the alleged injury that Robert caused to AVM. As such, a shareholders’ derivative suit is the proper mechanism for any claims by AVM against Robert pursuant to Anmaco, supra, 13 Cal.App.4th 891, 899-900. 

Accordingly, Plaintiff and Cross-Defendant Robert Gordon’s Motion for Judgment on the Pleadings as to the Cross-Complaint filed by Defendant and Cross-Complainant American Voice Mail, Inc. is GRANTED without leave to amend.