Judge: Mark C. Kim, Case: 22LBCV00327, Date: 2023-03-21 Tentative Ruling

Case Number: 22LBCV00327    Hearing Date: March 21, 2023    Dept: S27

1.     Background Facts

Plaintiff, Redwood Mortgage Investors VII filed this action against Defendants, Long Beach Square Partners, LLC, LBB Housing Partners, LP, Andrew Hanna, Global Premier Development, Inc., Living Hope Housing Foundation, and PLM Lender Services, Inc. for judicial foreclosure of deed of trust, recovery of personal property collateral/claim and delivery, foreclosure of security interest and declaratory relief, specific performance of deed of trust and appointment of receiver, and damages for breach of contract.    

Defendants, Global Premier Development, Inc., LBB Housing Partners, LP, and Andrew Hanna field a demurrer to the complaint, which is on calendar today, on 9/12/22.  On 1/03/23, Hanna filed a substitution of attorney, pursuant to which he is now representing himself.  On 2/02/23, the Court granted Defense Counsel’s motion to be relieved from representing Global and LBB, both of which are currently unrepresented in this action. 

2.     Demurrer

a.     Global and LBB

As noted above, Global and LBB are currently unrepresented in this action.  Plaintiffs argue their demurrer should be overruled in light of their unrepresented status. 

Although a corporation has capacity to sue and defend, a corporation is not a natural person, and therefore cannot appear in an action in propria persona. It can appear only through counsel.  Merco Const. Engineers, Inc. v. Municipal Court (1978) 21 Cal.3d 724, 731.  This prohibition stems from the notion a corporate representative who would likely appear on behalf of the corporation would be engaged in the unlicensed practice of law.  Gamet v. Blanchard (2001) 91 Cal.App.4th 1276, 1284.

Early cases suggest papers filed by a corporation in propria persona are “void.”  Paradise v. Nowlin (1948) 86 Cal.App.2d 897, 898.  A more recent case, however, holds filing a complaint by an unrepresented corporation is a curable defect. Thus, the complaint may not be dismissed without giving the corporation a reasonable time to obtain counsel.  CLD Const., Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1149-1150.

Neither Paradise nor CLD is directly on point.  The Court is not inclined to overrule the demurrer in light of Defendants’ unrepresented status, but instead to take it off calendar.  Defendants are given thirty days to retain a new attorney and set a new hearing on the demurrer.  If Defendants fail to do so, the demurrer will be stricken as to the two entity defendants, and Plaintiff may proceed to have their defaults entered.

b.     Hanna

Hanna demurs to the second cause of which, which is entitled “Recovery of Personal Property Collateral/Claim and Delivery.”  Hanna’s points and authorities in support of his demurrer spend substantial time arguing about the merits or lack of merits of Plaintiffs’ cause of action seeking appointment of a receiver; the receivership cause of action, however, is the fourth cause of action, not the second.  Because there is no demurrer to the fourth cause of action, the Court has not considered arguments advanced in the demurrer that relate to appointment of a receiver.

The Court notes that the second cause of action does mention appointment of a receiver, but only as a potential remedy.  At ¶40, Plaintiffs seek an order that Defendants turn over possession of the subject property “to Plaintiff or to the receiver appointed herein.”  Thus, the cause of action itself does not seek appointment of a receiver, but rather seeks turn over of personal property. 

Hanna also argues the complaint is uncertain because it seeks relief as to Does 46-49, whose identity is not revealed in the complaint.  Pleading claims against doe defendants is, of course, common and accepted practice.  Including doe defendants in the cause of action does not render it uncertain, and the demurrer on this ground is overruled. 

Hanna’s final argument on demurrer is that he has already turned over all the subject personal property in his possession.  He supports this argument with his attorney’s declaration.  The Court cannot consider external evidence when ruling on a demurrer, which has the sole function of challenging the face of the pleading itself.  While the Court of course encourages any plaintiff to dismiss a claim if it is moot, this is not the inquiry on demurrer.  The demurrer on this ground is therefore also overruled. 

c.     Conclusion

The demurrer by the entity defendants is taken off calendar in light of their unrepresented status.  The demurrer by Hanna is overruled.  The entity defendants must retain an attorney within thirty days or their demurrer will be stricken.  Hanna must file an answer within ten days. 

3.     Case Management Conference

The parties are reminded that there is a CMC on calendar concurrently with the hearing on the above demurrer.  The Court asks Counsel to make arrangements to appear remotely at the hearing on the demurrer and the CMC.