Judge: Robert B. Broadbelt, Case: 23STCV25232, Date: 2024-08-08 Tentative Ruling

Case Number: 23STCV25232    Hearing Date: August 8, 2024    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                 Defendant Altimeter Growth Corporation    

RESPONDING PARTY:       Plaintiff Global Pond USA Corporation

Motion to Quash Service of Summons

The court considered the moving, opposition, and reply papers filed in connection with this motion.

REQUEST FOR JUDICIAL NOTICE

The court grants defendant Altimeter Growth Corporation’s request for judicial notice.  (Evid. Code, § 452, subd. (d).)  While the court notes that this request was filed in support of the reply papers, defendant Altimeter Growth Corporation incorporated the matter to be judicially noticed in support of its moving papers, such that it has not requested that the court take judicial notice of new evidence in reply.  (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537 [“The general rule of motion practice . . . is that new evidence is not permitted with reply papers”].)

EVIDENTIARY OBJECTIONS

The court overrules plaintiff Global Pond USA Corporation’s evidentiary objection to the entire declaration of Sriram Raghunath Iyer (Objection No. 1). 

The court acknowledges, as plaintiff Global Pond USA Corporation has pointed out, that the moving defendant did not file and serve this declaration in support of its pending motion.  But (1) plaintiff Global Pond USA Corporation does not dispute that it was served with this declaration by the nonmoving defendants on February 2, 2024, in support of their motion to quash, and (2) defendant Altimeter Growth Corporation expressly incorporated this declaration by reference in its notice of motion, including by setting forth the date of its filing, which is permitted by California Rules of Court, rule 3.1110.  (Mot. to Quash filed Feb. 2, 2023, p. 21 [proof of electronic service of, inter alia, “Declaration of Sriram Raghunath Iyer” on counsel for plaintiff Global Pond USA Corporation on February 2, 2024]; Not. of Mot., p. 1:11-15; Cal. Rules of Ct., rule 3.1110, subd. (d) [“Any paper previously filed must be referred to by date of execution and title”]; Roth v. Plikaytis (2017) 15 Cal.App.5th 238, 291 [“Consistent with [California Rules of Court, rules 3.1110 and 3.1113], a litigant may incorporate previously filed documents and, where practicable, should file them with the motion.  But a litigant is not required to do so absent a rule precluding incorporation by reference”] [internal footnote omitted] [emphasis in original].)

The court rules on the remainder of plaintiff Global Pond USA Corporation’s evidentiary objections as follows:

Objections Nos. 2-6 are overruled.

DISCUSSION

Specially appearing defendant Altimeter Growth Corporation (“Defendant”) moves the court for an order quashing service of the summons and complaint in this action, filed by plaintiff Global Pond USA Corporation (“Plaintiff”), on the ground that Defendant is a non-existent entity and therefore may not be subjected to the court’s jurisdiction. 

As a threshold matter, the court notes that Plaintiff has requested that the court continue the hearing on this motion so that it may take limited jurisdictional discovery. 

“‘A trial court has the discretion to continue the hearing on a motion to quash service of summons for lack of personal jurisdiction to allow the plaintiff to conduct discovery on jurisdictional issues.’  [Citation.]  ‘In order to prevail on a motion for a continuance for jurisdictional discovery, the plaintiff should demonstrate that discovery is likely to lead to the production of evidence of facts establishing jurisdiction.’”  (Preciado v. Freightliner Customer Chassis Corporation (2023) 87 Cal.App.5th 964, 972.)  Plaintiff did not present argument or evidence (1) identifying the jurisdictional discovery that it intends to take, and (2) showing that such discovery is likely to lead to the production of evidence of facts establishing jurisdiction. 

Thus, the court finds that Plaintiff has not supported its request for a continuance and exercises its discretion to deny Plaintiff’s request to continue this hearing to allow it to conduct additional discovery.  The court therefore rules on the merits of Defendant’s motion.

“A defendant, on or before the last day of his or her time to plead or within any further time that the court may for good cause allow, may serve and file a notice of motion for one or more of the following purposes: [¶] (1) To quash service of summons on the ground of lack of jurisdiction of the court over him or her.”  (Code Civ. Proc., §¿418.10, subd. (a)(1).)  “When a defendant argues that service of summons did not bring him or her within the trial court’s jurisdiction, the plaintiff has ‘the burden of proving the facts that did give the court jurisdiction, that is the facts requisite to an effective service.’”  (American Express Centurion Bank v. Zara (2011) 199 Cal.App.4th 383, 387.)

The court finds that Plaintiff has not met its burden to show that the court has jurisdiction over Defendant.  (American Express Centurion Bank, supra, 199 Cal.App.4th at p. 387.)

In support of its motion, Defendant has presented the following evidence showing that it ceased to exist as a separate corporate entity as of December 2021, following a business combination and merger in November 2021. 

Defendant was formed as a special purpose acquisition company and was incorporated in the Cayman Islands in August 2020 for the sole purpose of effecting a combination with other businesses or entities.  (Decl. of Sriram Raghunath Iyer filed Feb. 2, 2024 (the “Iyer Decl.”), ¶¶ 16, 45.)  As a special purpose acquisition company, Defendant had no business operations and had no corporate affiliation with any entity in Grab Holdings Limited’s corporate structure prior to November 2021.  (Iyer Decl., ¶¶ 46-47.)  In November 2021, a business combination took place, which involved “(a) a merger of [Defendant] and a direct wholly-owned subsidiary of [nonmoving defendant Grab Holdings Limited] incorporated in the Cayman Islands (J2 Holdings Inc.), with the [nonmoving defendant Grab Holdings Limited] subsidiary surviving and remaining as a wholly-owned subsidiary of [nonmoving defendant Grab Holdings Limited]; and (b) a subsequent merger of another direct wholly-owned Cayman Islands subsidiary of [nonmoving defendant Grab Holdings Limited] (J3 Holdings Inc.) and [nonmoving defendant Grab Holdings Inc.], with [nonmoving defendant Grab Holdings Inc.] surviving and becoming a wholly-owned subsidiary of [nonmoving defendant Grab Holdings Limited].”  (Iyer Decl., ¶ 48.)  

Thus, following the November 2021 merger, Defendant “ceased to exist as a separate corporate entity, having been merged into the surviving Cayman Islands subsidiary holding company wholly owned by [Grab Holdings Limited][.]”  (Iyer Decl., ¶ 49; Iyer Decl., Ex. 4, SEC file No. 333-261949, p. 245 [stating, at the time of the merger, all the property, rights, and liabilities of Defendant became a wholly-owned subsidiary of Grab Holdings Limited “and the separate corporate existence of AGC [(i.e., defined to be Defendant on page vii)] ceased to exist”] [emphasis added].)

The court therefore finds that, based on this evidence, Defendant has met its burden to challenge the court’s jurisdiction over it because (1) “[a] cause of action is viable ‘only against a legal person’” and “no cause of action can be maintained ‘against an entity which is legally nonexistent[,]’” and (2) Defendant has shown that its separate corporate existence has ceased to exist, such that it “may not be effectively served with summons as a named defendant and may not be subjected to jurisdiction of a court by an entity of a general appearance on its behalf.”  (Barajas v. Sativa LA County Water Dist. (2023) 91 Cal.App.5th 1213, 1225; Omega Video Inc. v. Superior Court (1983) 146 Cal.App.3d 470, 477;  Iyer Decl., ¶¶ 48-49 and Ex. 4, p. 245.)

Plaintiff contends that the court has jurisdiction over Defendant because (1) at the time this action was filed, Defendant was still listed as a corporation registered with the California Secretary of State; (2) Defendant consented to jurisdiction and to service on the California Secretary of State; and (3) the authority relied on by Defendant in its papers is distinguishable.  The court disagrees.

First, the court notes that Plaintiff has submitted copies of (1) the Statements of Information that Defendant filed with the California Secretary of State on October 27, 2020 and October 29, 2021, and (2) the Certificate of Surrender that Defendant filed with the California Secretary of State on October 18, 2023.  (Mazda Decl., Ex. A [Oct. 18, 2023 Certificate of Surrender], Ex. C [Oct. 27, 2020 Statement of Information], Ex. D [Oct. 29, 2021 “Corporation – Statement of Information No Change”].)  Thus, Plaintiff has shown that, as of the date that this action was filed (on October 16, 2023), Defendant was still registered with the California Secretary of State.  However, Plaintiff did not present argument or evidence showing that, solely because Defendant had not filed the Certificate of Surrender as of the time of its filing of this action, the court has jurisdiction over Defendant irrespective of the fact that it ceased to exist following the November 2021 merger.  Moreover, Plaintiff did not file evidence showing that Defendant was not involved in the merger or that it did not cease to exist after the date thereof.

Second, the court acknowledges that the Certificate of Surrender states that Defendant “consents to process against it in any action upon any liability or obligation incurred within the State of California prior to the Filing of this Certificate of Surrender may be served upon the California Secretary of State.”  (Mazda Decl., Ex. A, Cert. of Surrender, p. 1, ¶ 3.)  However, Plaintiff has not presented argument or authority establishing that this assertion replaces the rule that a nonexistent entity cannot be sued in this state.  (Barajas, supra, 91 Cal.App.5th at p. 1224 [an action cannot be maintained against an entity that is legally nonexistent].)  Moreover, Plaintiff did not serve Defendant in accordance with this assertion (i.e., Plaintiff did not serve the California Secretary of State).  (Proof of Service filed Mar. 27, 2024, POS-010, ¶¶ 2-3, 5, subd. (b) [stating that Defendant was served with the summons and complaint in this action by substituted service on March 20, 2024, by leaving the papers with “Brad Gerstner – Authorized Agent/CEO and President”].)  The court denies Plaintiff’s request that the court issue an order allowing Plaintiff to serve Defendant by serving the summons and complaint on the Secretary of State, because it is improper to request such relief in opposition papers.  (Opp., p. 1:17-18.)

Third, Plaintiff contends that the authority relied on by Defendant “only stands for the proposition that you cannot sue a purported entity that did not exist when liability arose or when sued, even if an attorney makes a general appearance for that entity that had never existed.”  (Opp., pp. 1:27-2:3.)  However, the Omega Video Inc. Court, in stating that “[a] non-existent entity may not be effectively served with summons as a named defendant and may not be subjected to jurisdiction of a court by an entry of a general appearance on its behalf[,]” did not limit the application of that rule as Plaintiff suggests.  (Omega Video Inc., supra, 146 Cal.App.3d at p. 477.)  Moreover, Plaintiff has not cited authority establishing that a nonexistent entity may be served and sued.  Instead, the weight of authority holds that nonexistent entities may not be sued.  (Barajas, supra, 91 Cal.App.5th at p. 1224; Oliver v. Swiss Club Tell (1963) 222 Cal.App.2d 528, 537 [“A civil action can be maintained only against a legal person, i.e., a natural person or an artificial or quasi-artificial person; a nonentity is incapable of suing or being sued”].)

The court therefore finds, for the reasons set forth above, that Plaintiff has not met its burden to establish facts that give the court jurisdiction over Defendant because (1) Defendant has shown, and Plaintiff has not meaningfully disputed, that Defendant has ceased to exist as a separate corporate entity, and (2) “[a] non-existent entity may not be effectively served with summons as a named defendant[,]” such that the court must “quash service of summons on the ground of lack of jurisdiction of the court over” Defendant.  (Omega Video Inc., supra, 146 Cal.App.3d at p. 477; Code Civ. Proc., § 418.10, subd. (a)(1); Iyer Decl., ¶¶ 48-49 and Ex. 4, p. 245.)

ORDER

            The court grants specially appearing defendant Altimeter Growth Corporation’s motion to quash service of summons.

            The court orders that service of the summons and complaint in this action, filed by plaintiff Global Pond USA Corporation, is quashed.  (Code Civ. Proc., § 418.10, subd. (a)(1).)

The court orders specially appearing defendant Altimeter Growth Corporation to prepare, serve, and lodge a proposed judgment of dismissal within 10 days of the date of this order.   

            The court orders specially appearing defendant Altimeter Growth Corporation to give notice of this ruling.

IT IS SO ORDERED.

DATED:  August 8, 2024

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court