Judge: Robert B. Broadbelt, Case: 21STCV06913, Date: 2023-04-28 Tentative Ruling

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Case Number: 21STCV06913    Hearing Date: April 28, 2023    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                 Specially appearing defendant Lehigh Hanson, Inc. 

RESPONDING PARTY:       Unopposed

Motion to Dismiss or Abate Action

The court considered the moving papers filed in connection with this motion.  No opposition papers were filed.

DISCUSSION

Specially appearing defendant Lehigh Hanson, Inc. (“Defendant”) moves the court for an order dismissing this action filed by plaintiff Virina Steel, LLC (“Plaintiff”).  Alternatively, Defendant requests that the court abate or stay this action.  Defendant moves for this relief on the grounds that (1) Plaintiff is not lawfully authorized to maintain and further prosecute this action because its status as a Delaware limited liability company has been cancelled, and Plaintiff is not properly qualified and registered to do business in the State of California, and (2) there is a pending case in Pennsylvania that involves the same facts, dispute, and parties involved in this action.

The court finds that Defendant has met its burden to show that Plaintiff’s status as a “Cancelled” limited liability company in Delaware has deprived Plaintiff of its legal capacity to sue in California and therefore grants Defendant’s motion to dismiss this action.

“‘[T]he continuing legal existence of a corporation depends on the law of the state of incorporation.’  [Citation.]  A corporation that lacks the capacity to sue in its home state based on a lack of corporate status, also lacks capacity to sue in California, because ‘it has no greater capacity to sue in California than its home state.’”  (The Capital Gold Group, Inc. v. Nortier (2009) 176 Cal.App.4th 1119, 1127 [internal citation omitted]; CM Record Corp. v. MCA Records, Inc. (1985) 168 Cal.App.3d 965, 968-969 [because appellant lacked capacity to sue in Missouri due to lack of corporate status, “[i]t likewise lacked the capacity to sue in California].)

Plaintiff has alleged in its Complaint that it is a limited liability company organized under the laws of Delaware with its principal place of business in the County of Los Angeles, California.  (Compl., ¶ 1.)  In support of its motion, Defendant has submitted a copy of the results from its online search of the Delaware corporate records for Plaintiff, which states that (1) Plaintiff was formed on May 20, 2013, in the State of Delaware, and (2) its status is “Cancelled, [for] Failure to Pay Tax.”  (Lorch Decl., Ex. A, p. 1.)

In Delaware, “[a] domestic limited liability company that has ceased to be in good standing . . . by reason of the domestic limited liability company’s . . . refusal or failure to pay an annual tax may not maintain any action, suit or proceeding in any court of the State of Delaware until such domestic limited liability company . . . has been restored to and has the status of a domestic limited liability company . . . in good standing or duly registered in the State of Delaware.”  (6 Del.C., § 18-1107, subd. (l).)  A domestic limited liability company’s failure to pay the annual tax due under Delaware law for a period of three years from the date that it is due results in the cancellation of the certificate of formation of a domestic limited liability company.  (6 Del.C., § 18-1108, subd. (a).)

The court therefore finds that Defendant has presented evidence showing that, under Delaware law, Plaintiff does not have the legal capacity to maintain this action based on its cancellation status for failure to pay taxes.  (Lorch Decl., Ex. A, p. 1; 6 Del.C., §§ 18-1107, subd. (l), 18-1008, subd. (a).) 

Plaintiff has not shown that it has the legal capacity to maintain this action by failing to submit opposition papers or other evidence with the court regarding its corporate status in Delaware.  For example, Plaintiff has not presented evidence or argument establishing that it has since taken steps to revive its corporate status or otherwise remedied the issue regarding its good standing.  (6 Del.C., § 18-1009, subd. (a) [setting forth revival steps for a domestic limited liability company whose certificate of formation has been cancelled].)

Thus, the court finds that, because Plaintiff lacks the legal capacity to maintain this action in Delaware, Plaintiff “likewise lack[s] the capacity to sue in California.”  (CM Record Corp., supra, 168 Cal.App.3d at pp. 969-970; The Capital Gold Group, Inc., supra, 176 Cal.App.4th at p. 1127.)

The court therefore grants Defendant’s motion to dismiss this action.

ORDER

The court grants specially appearing defendant Lehigh Hanson, Inc.’s motion to dismiss or, in the alternative, abate action as follows.

The court orders that this action, filed by plaintiff Virina Steel, LLC on February 22, 2021, is dismissed.

The court orders specially appearing defendant Lehigh Hanson, Inc. to give notice of this ruling.

IT IS SO ORDERED.

DATED:  April 28, 2023

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court