Judge: Monica Bachner, Case: 20STCV47514, Date: 2023-02-16 Tentative Ruling

Department 71: Attorneys who elect to submit on these published tentative rulings, without making an appearance at the hearing, may so notify the Court by communicating this to the Department's staff at (213) 830-0771 before the set hearing time.  See, e.g., CRC Rule 324(b).   All parties are otherwise encouraged to appear by Court Call for all matters.

Case Number: 20STCV47514    Hearing Date: February 16, 2023    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Plaintiff Gasper Petrosyan’s unopposed motion to strike Defendant BCA Holdings, LLC’s answer to Plaintiff’s second amended complaint is [granted/denied]. 

Plaintiff Gasper Petrosyan (“Petrosyan”) (“Plaintiff”) moves unopposed to strike Defendant BCA Holdings, LLC’s (“BCA”) answer (“Answer”) to Plaintiff’s second amended complaint (“SAC”).  (Notice of Motion, pg. 2; C.C.P. §436(b).)

Plaintiff filed the instant motion on June 30, 2022.  Plaintiff filed its notice of Non-opposition on February 8, 2023.

Request for Judicial Notice

Plaintiff’s 6/30/22 request for judicial notice is granted as to the California Secretary of State Certificate of Status for BCA Holdings, LLC, dated January 13, 2022, and the California Secretary of State Certificate of Status for BCA Holdings, LLC dated June 29, 2022.  (P-RJN, Exhs. A, B.)

Meet and Confer

Before filing a motion to strike, the moving party shall meet and confer in person or by telephone with the party who has filed the pleading subject to the motion to strike and file a declaration detailing their meet and confer efforts.  (C.C.P. §435.5(a).)

Plaintiff submitted an affidavit that does not include the requisite details indicating parties met and conferred pursuant to C.C.P. §435.5.  (See Decl. of Levine.)  Plaintiff submitted an affidavit indicating parties communicated on the phone on May 25, 2022, in which Defendant BCA’s former counsel asked Plaintiff’s counsel whether Plaintiff would be willing to stipulate to set aside the default entered against Defendant BCA, and Plaintiff’s counsel asked whether Defendant BCA’s status was reinstated, to which Defendant’s counsel responded that Defendant BCA was still suspended.  (Decl. of Levine ¶3.)  Plaintiff’s affidavit does not satisfy the requirements of a meet and confer declaration.  (C.C.P. §435.5(a)(3).)  However, an insufficient meet and confer process is not grounds to deny a motion to strike.  (C.C.P. §435.5(a)(4).)

Motion to Strike

C.C.P. §436 provides that the Court may, upon a motion made pursuant to C.C.P. §435, or at any time within its discretion and upon terms it deems proper, “strike out any irrelevant, false, or improper matter inserted in any pleading” and/or “strike out all or part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.”  A motion to strike should be applied cautiously and sparingly because it is used to strike substantive defects.  (PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1683.)  The grounds for a motion to strike must appear on the face of the pleading under attack, or from matter which the court may judicially notice.  (C.C.P. §437.) 

Pursuant to Revenue and Taxation Code §23301, the exercise of corporate powers, rights and privileges may be suspended for the failure to pay taxes.  (See Rev. & Tax. Code §23301.)  A suspended corporation is a corporation that has failed to pay its state taxes and, as a result, can no longer exercise corporate powers, rights and privileges, including the right to defend against legal claims.  (Kaufman & Broad Communities, Inc. v. Performance Plastering (2006) 136 Cal.App.4th 212, 217-218.)  “[D]uring the period a corporation is suspended . . . , it may not prosecute or defend an action.”  (Corp. Code §§2205(c); Rev. & Tax. Code §23301; Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2018) 4 Cal.5th 637, 641; Grell v. Laci Le Beau Corp. (1999) 73 Cal.App.4th 1300, 1306; Kalfountzos v. Hartford Fire Insurance Co. (1995) 37 Cal.App.4th 1655, 1658-1659.)  Further, an attorney representing a corporation that is suspended has an affirmative duty to report its status to the Court.  (Palm Valley Homeowners Association, Inc. v. Design MTC (2000) 85 Cal.App.4th 553, 562.)

Defendant BCA’s Answer to Plaintiff’s SAC must be stricken for violation of Corporations Code §2205(c) and Revenue & Taxation Code §23301 because BCA is a suspended corporate entity and its powers, rights, and privileges were suspended by the California Franchise Tax Board on November 1, 2018, and according to Plaintiff’s counsel’s call with Defense counsel on May 25, 2022, counsel for BCA Holdings, LLC knew this at the time its Answer to the SAC was filed.  (Motion, pg. 4-5; Decl. of Levine ¶3; P-RJN Exhs. A, B.)

Accordingly, Plaintiff’s unopposed motion to strike Defendant BCA’s Answer to Plaintiff’s SAC is granted. 

Dated:  February ____, 2023

Hon. Monica Bachner

Judge of the Superior Court