Judge: Maurice A. Leiter, Case: 24STCV15211, Date: 2024-09-19 Tentative Ruling

Case Number: 24STCV15211    Hearing Date: September 19, 2024    Dept: 54

Hearing Date: September 19, 2024

Department 54, Judge Maurice Leiter

(2) Demurrers to Complaint

Moving Party: Defendants Mellarius Medical LLC and Patrick J. Moraites

Responding Party: Success Import USA Inc.

T/R:     DEFENDANTS’ DEMURRERS ARE OVERRULED.

DEFENDANTS TO FILE AND SERVE ANSWERS TO THE COMPLAINT WITHIN 30 DAYS OF NOTICE OF RULING.

DEFENDANTS TO NOTICE

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, and reply.

BACKGROUND

On June 18, 2024, Plaintiff Success Import USA, Inc. sued Defendants Mellarius Medical LLC and Patrick J. Moraites, asserting causes of action for (1) breach of contract; (2) accounts stated; and (3) unjust enrichment. Plaintiff alleges Defendants failed to pay 11 invoices for medical devices sold, shipped, and delivered by Plaintiff.

REQUESTS FOR JUDICIAL NOTICE

Defendants’ requests for judicial notice are GRANTED.

ANALYSIS

A demurrer to a complaint may be taken to the whole complaint or to any of the causes of action in it.  (CCP § 430.50(a).)  A demurrer challenges only the legal sufficiency of the complaint, not the truth of its factual allegations or the plaintiff's ability to prove those allegations.  (Picton v. Anderson Union High Sch. Dist. (1996) 50 Cal. App. 4th 726, 732.)  The court must treat as true the complaint's material factual allegations, but not contentions, deductions or conclusions of fact or law.  (Id. at 732-33.)  The complaint is to be construed liberally to determine whether a cause of action has been stated.  (Id. at 733.)

Defendants demur to the complaint on the ground that Plaintiff, as a foreign corporation, cannot maintain an action in California under Corp. Code § 2203(c). This provision states,

A foreign corporation . . . which transacts intrastate business without complying with section 2105 shall not maintain any action or proceeding upon any intrastate business so transacted in any court of this state, commenced prior to compliance with section 2105, until it has complied with the provisions thereof and has paid to the Secretary of State a penalty of two hundred fifty dollars ($250) in addition to the fees due for filing the statement and designation required by section 2105 and has filed with the clerk of the court in which the action is pending receipts showing the payment of the fees and penalty and all franchise taxes and any other taxes on business or property in this state that should have been paid for the period during which it transacted intrastate business.

Defendants, who are Florida residents, assert that Plaintiff has conducted substantial business within California while failing to pay state taxes and comply with state law. According to Defendants, Plaintiff has its principal place of business in California, its CEO lives in California, and invoices reflect Plaintiff conducts business from California. According to judicially noticeable documents, Plaintiff registered with the California State Franchise Board after filing this action. The registration shows Plaintiff is in “good standing” with the board.

In opposition, Plaintiff argues that Defendant has not shown that Plaintiff needed to register in California and must pay back taxes.  Plaintiff asserts that the complaint and evidence presented by Defendant show only that Plaintiff conducted interstate business between Plaintiff and Defendants located in Florida. The Court agrees. Corporations Code § 191 defines "transacting intrastate business" as "entering into repeated and successive transactions of its business in this state, other than interstate or foreign commerce." Here, the complaint and invoices show Plaintiff sold goods to Defendants in Florida. Defendants have not shown Plaintiff engaged in transactions in this state that are not interstate commerce.

Defendants’ demurrers are OVERRULED.