Judge: Michael Shultz, Case: 21CMCV00342, Date: 2022-08-30 Tentative Ruling
Case Number: 21CMCV00342 Hearing Date: August 30, 2022 Dept: A
21CMCV00342
Pro-Engineering & Manufacturing, Inc. v. Savage Machines, Inc., et al.
[TENTATIVE] ORDER
I.
BACKGROUND
The complaint alleges that
Plaintiff leased commercial real property from Defendants. Although Plaintiff
was entitled to the protections against evictions for COVID-related inability
to pay rent, Defendants harassed Plaintiff and forced Plaintiff to sign a
repayment agreement. Defendants locked Plaintiff out of the property and turned
the power off on August 7, 2021. Defendants did not serve a three-day notice to
pay rent or quit or file an unlawful detainer action. Defendants did not obtain
a court order for the lockout. Plaintiff alleges claims for wrongful eviction,
forcible detainer, conversion, and for violation of the County of Los Angeles
COVID-19 Tenant Protections Resolution (“TPR”).
The court entered
default against both Defendants on April 27 and April 28, 2022.
II.
ARGUMENTS
On July 15, 2022, Defendants,
Savage Machine, Inc., and Robert White (“Defendants”) filed this motion to
vacate the court’s entry of default against them. Defendants contend they were
never properly served with the summons and complaint. Plaintiffs cannot
prosecute this case because Plaintiff is a suspended California corporation. Defendants have prepared a motion to strike
and cross-complaint which demonstrate that Defendants have meritorious
defenses.
Efrain Palomino
filed a declaration in opposition on August 16, 2022, stating that he is
attempting to revive his corporation, Pro-Engineering Manufacturing, Inc., with
the Secretary of State. He intends to have his tax obligations paid by August
31, 2022. Declaration of Palomino, ¶ 6.
Defendants object
to the Palomino declaration and asks that the court disregard it. Mr. Palomino
did not lay any foundation for the exhibits attached to the declaration.
Plaintiff is a suspended corporation which means Plaintiff cannot maintain this
suit.
III.
LEGAL STANDARDS
A corporation that has had its
powers suspended lacks legal capacity to defend a civil action during its
suspension. Tabarrejo v. Superior Court (2014) 232
Cal.App.4th 849, 861-862. The court takes judicial notice of records from the
Secretary of State showing that Plaintiff is a suspended corporation. Declaration
of Stephen Madoni Ex., A; Evidence Code § 452(c). Mr. Palomino does not dispute
this fact. Accordingly, Plaintiff cannot prosecute or defend an action while
its corporate rights are suspended for failure to pay taxes." Reed v. Norman (1957) 48 Cal.2d 338, 343.
Defendant filed a motion to strike
the complaint on these grounds previously set for hearing on August 2, 2022.
However, the court’s file reflects that Defendants took the motion off
calendar. Defendants have not reserved a new hearing for the motion; therefore,
the court does not consider the merits of Defendants’ Motion to Strike, or the
remedies sought therein. However, the court schedules an Order to Show cause
for Plaintiff to demonstrate that it has revived its corporate status with the
Secretary of State.
Where service of summons and
complaint has not resulted in actual notice to a party in time to defend and a
default has been entered, Defendants can move to vacate the default within a
reasonable time, no later than 180 days after service of the notice of default
entry. Code Civ. Proc., § 473.5 subd. (a). There is no indication that
Defendants received notice of default entry. Defendants contend they did not
become aware of this action until Defendants received an email with respect to
Plaintiff’s motion for injunctive relief in June of 2022. Robert White
declaration, ¶ 7. Therefore, there is no evidence that the motion is untimely
made.
The proof of service indicates
that Defendant White was served by substituted service on January 20, 2022, at
7325 Madison St., Paramount, California.
POS filed 4/21/22. Substituted
service may be accomplished by leaving the documents at the person’s home or
office or usual mailing address, in the presence of a member of person in
charge. Code Civ. Proc., § 425.20. Mr. White declares that the Madison St. address
is not his place of business. He subleases the property to several
corporations. White Declaration ¶ 5.
Service of summons on a
corporation is accomplished by serving the corporation’s agent for service of
process or an officer of the corporation. Code Civ. Proc., § 416.10. Plaintiff
served Defendant, Savage Machines, Inc., on January 20, 2022, by substituted
service at the Madison Avenue address on “Tom Weaver, Manager.” POS filed
3/9/22. Mr. White declares that Mr. Weaver is a subtenant, who is not his
employee, is not affiliated with Savage Machines, and is not authorized to
accept service of summons on behalf of Savage Machines, Inc. Accordingly,
Defendants have established that service of process on both Defendants did not
meet statutory requirements.
IV.
CONCLUSION