Judge: Monica Bachner, Case: 21STCV29170, Date: 2022-12-12 Tentative Ruling

Case Number: 21STCV29170    Hearing Date: December 12, 2022    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Plaintiff Edward M. Lyman III’s motion to strike Defendant Kaufman Dolowich Voluck LLP’s verified answer to Plaintiff’s first amended complaint is denied. 

Plaintiff’s request for the Court to order the Clerk to enter default against Defendant Kaufman Dolowich Voluck LLP is denied.

Plaintiff’s request for terminating sanctions is denied.

Regarding defendants’ request for monetary sanctions, the Court sets a hearing for Order to Show Cause pursuant to C.C.P. §128.5(c) on January 27, 2023 at 8:30 a.m.

Plaintiff Edward M. Lyman III (“Lyman”) (“Plaintiff”) moves to strike Defendant Kaufman Dolowich Voluck LLP’s (“KDV’) verified answer (“Answer”) to Plaintiff’s first amended complaint (“FAC”) and requests the Court order the Clerk to enter default against Defendant KDV.  (Notice of Motion, pg. 2; C.C.P. §§435, 436, 437, 585, 586, 587, 1169, 2023.030(d)(1), (4).)  Plaintiff further requests monetary sanctions against Defendants KDV, Barry Z. Brodsky (“Brodsky”), and Defendants’ Counsel Brad Zurcher in the amount of no less than $10,000.00 each.  (Notice of Motion, pg. 3; C.C.P §128.5(a).)  Defendants KDV, Courtney E. Curtis’ (“Curtis”); Brodsky, and Andrew J. Waxler (“Waxler”) (collectively, “Defendants”) request the Court issue sanctions against Plaintiff in the amount of $30,000.00 for filing the instant motion.  (Opposition, pg. 2; C.C.P. §128.5.)  Plaintiff has not filed a reply.

C.C.R. Violation

CCR Rule 8.204(b)(7) provides briefs must be consecutively numbered. Plaintiff’s motion is not in compliance with Rule 8.204(b)(7) because it is not consecutively numbered.  The Court in its discretion will consider Plaintiff’s motion.  (CCR, Rule 8.204(e)(2)(C).)

Motion to Strike

Plaintiff moves to strike Defendant KDV’s Answer to the FAC on the basis Defendant KDV lacks capacity to defend itself and involuntary termination of KDV cannot be cured.  (Motion, pgs. 7-8.)

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 Lyman.)  Defendants submitted an affidavit indicating parties communicated via email on June 6, 2022, regarding the governing statute in Plaintiff’s motion.  (Decl. of Zurcher ¶2, Exh. A.)  Parties’ affidavits do 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).)

Legal Standard

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.) 

Corporate Code §15909.07 provides:

(b) A foreign limited partnership transacting business in this state may not maintain an action or proceeding in this state unless it has a certificate of registration to transact business in this state. 

. . .

(d) The failure of a foreign limited partnership to have a certificate of registration to transact business in this state does not impair the validity of a contract or act of the foreign limited partnership or prevent the foreign limited partnership from defending an action or proceeding in this state.

(Corp. Code §§15909.07(b), (d), emphasis added.)

California State Bar Rule 3.170 provides:

Under California law, a limited liability partnership that provides professional legal services is not entitled to limitation of liability for acts, errors, or omissions arising out of the rendering of such services unless the partnership has a currently effective certificate of registration issued by the State Bar. These rules apply to California limited liability partnerships issued a certificate of registration by the State Bar in accordance with these rules. These rules refer to such certified partnerships as “limited liability partnerships.”

(State Bar Rule 3.170, emphasis added.)

California State Bar Rule 3.179 provides: “A limited liability partnership that is suspended for more than one year for failure to submit a complete Annual Renewal and fee is terminated. Termination is effective the day after the one year anniversary of the suspension.”  (State Bar Rule 3.179(B).)

Discussion

Plaintiff argues Defendant KDV’s Answer to Plaintiff’s FAC must be stricken because according to the State Bar of California, Defendant KDV has been suspended for more than one year.  (Decl. of Lyman, Exh. 1.)  Plaintiff cites to Corporate Code §15909.07 for support that a foreign limited partnership cannot maintain an action of proceeding in California unless it has a certificate of registration to transact business in this state.  (Corp. Code §15909.07(b).)

Defendant KDV’s Answer to Plaintiff’s FAC should not be stricken for violation of Corporations Code §15909.07(b) for several reasons.  First, Corporations Code §15909.07 applies to foreign limited partnerships, not foreign limited liability partnerships. (Corp. Code § 16101(a)(6)(A) [“‘Foreign limited liability partnership’ means a partnership, other than a limited partnership, formed pursuant to an agreement governed by the laws of another jurisdiction…”] (emphasis added); Corp. Code § 16953(a) (“To become a registered limited liability partnership, a partnership, other than a limited partnership, shall file with the Secretary of State a registration…”] (emphasis added).) Defendant KDV is a limited liability parternership under the laws of New York. (Decl. of Zurcher ¶7, Exh. E.)  Second, even if Defendant KDV was a foreign limited partnership, Defendant KDV would not be prevented from defending itself in this action.  (Corp. Code §15909.07(d)[“The failure of a foreign limited partnership to have a certificate of registration to transact business in this state does not…prevent the foreign limited partnership from defending an action or proceeding in this state.”.)  Also, KDV has been registered during the duration of this action, (Decl. of Zurcher, ¶6, Exh. F), although was apparently suspended for a period of time.  (Zurcher Decl., ¶ 3-5, Exhs. B-D, F.)  Finally, Defendant KDV has retained counsel to represent it in this action and is not practicing law in defending itself and therefore does not violate California State Bar Rules in hiring attorneys to litigate its defense.

Accordingly, Plaintiff’s motion to strike Defendant KDV’s Answer to Plaintiff’s FAC is denied. 

Sanctions

Plaintiff’s request for sanctions against Defendant KDV is denied. Plaintiff’s request for an order rendering judgment by default pursuant to C.C.P. §2023.030(d) is denied.

Defendants’ requests sanctions in the amount of $30,000 against Plaintiff is denied. Section 128.5, authorizes the court to order a party “to pay the reasonable expenses, including attorney's fees, incurred by another party as a result of actions or tactics.” The Court sets a hearing for an order to show cause as to why the Court should not impose sanctions for Plaintiff to pay the reasonable expenses, incurred by Defendants, including attorney’s fees, in opposing the instant motion, pursuant to C.C.P. § 128.5(c), for January 27, 2023 at 8:30 a.m.  Defendants are ordered to serve and file a declaration setting forth their reasonable expenses incurred in opposing the instant motion by December 30. 2022. Plaintiff may file his response to the declaration and response by January 13, 2023.  Defendants to file any reply by January 20, 2023.

Dated:  December ____, 2022

Hon. Monica Bachner

Judge of the Superior Court