Judge: Stephen P. Pfahler, Case: 19CHCV00848, Date: 2023-01-10 Tentative Ruling

Case Number: 19CHCV00848    Hearing Date: January 10, 2023    Dept: F49

Dept. F-49

Date: 1-10-23

Case # 19CHCV00848

Trial Date: 3-20-23 c/f 7-11-22

SUMMARY JUDGMENT/SUMMARY ADJUDICATION

MOVING PARTY: Cross-Defendant, ADP Payroll Services, Inc.

RESPONDING PARTY: Unopposed/Judgment Debtor/Cross-Complainant, Osmin’s Iron Inc.

RELIEF REQUESTED

Motion for Summary Judgment/Summary Adjudication as to the Cross-Complaint

SUMMARY OF ACTION & PROCEDURAL HISTORY

Assignor State Compensation Insurance Fund provided workers compensation insurance to defendant Osmin’s Iron Inc. for the period October 4, 2017 to October 4, 2018, and October 4, 2018 through November 13, 2018. The policy premiums totaled $41,543.75. No portion of the policies were paid. State Compensation Insurance Fund assigned the debt to plaintiff Creditors Adjustment Bureau for collection.

On October 22, 2019, plaintiff filed a complaint for breach of contract, open book account, account stated, and reasonable value. Defendant answered on January 11, 2019. On January 10, 2020, Defendant answered. On January 14, 2020, Defendant filed a cross-complaint against ADP Payroll Services, Inc. for breach of contract, equitable indemnity, and contribution.

On October 7, 2020, the court entered a stipulated judgment on the complaint in favor of Creditor’s Adjustment Bureau, Inc. and against Osmin’s Iron Inc. AKA Osmin’s Iron Work for $49,911.19. On April 12, 2021, the clerk entered a default on the cross-complaint in favor of ADP Payroll Services, Inc. On September 20, 2021, the parties stipulated to set aside the default on the cross-complaint. ADP Payroll Services, Inc. answered the cross-complaint on September 24, 2021.

On August 19, 2022, the court granted ADP Payroll Services, Inc. leave to file a first amended answer to the cross-complaint adding a defense of lack of legal capacity, due to the suspended corporate status of Osmin’s Iron Inc. AKA Osmin’s Iron Work. The answer was separately filed on August 26, 2022.

RULING: Granted

Request for Judicial Notice: Granted.

Cross-Defendant, ADP Payroll Services, Inc. (ADP) moves for summary judgment/summary adjudication on the cross-complaint of Osmin’s Iron Inc. AKA Osmin’s Iron Work. ADP moves on grounds of lack of legal capacity as to Osmin’s Iron Inc. AKA Osmin’s Iron Work. ADP alternatively challenges the individual causes of action based on a lack of facts and ability to meet the elements of the individual causes of action. ADP in reply reiterates the basis of the motion.

The pleadings frame the issues for motions, “since it is those allegations to which the motion must respond. (Citation.)” (Scolinos v. Kolts (1995) 37 Cal. App. 4th 635, 640-641; FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 382-383; Jordan-Lyon Prods., LTD. v. Cineplex Odeon Corp. (1994) 29 Cal.App.4th 1459, 1472.) “On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.” (Scalf v. D.B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.) A defendant moving for summary judgment “has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established.”  (Code Civ. Proc., § 437c, subd. (p)(2).) “Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (Ibid.)

“When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inference that may be drawn form that evidence, in the light most favorable to the party opposing summary judgment.” (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467; see also Code Civ. Proc., § 437c, subd. (c).) “An issue of fact can only be created by a conflict in the evidence.  It is not created by speculation, conjecture, imagination or guesswork.” (Lyons v. Security Pacific National Bank (1995) 40 Cal.App.4th 1001, 1041 (citation omitted).)

The first amended answer to the cross-complaint alleges Osmin’s Iron Inc. AKA Osmin’s Iron Work proceeds in the action as a suspended business entity. ADP submits proof of the suspension via the California Secretary of State website. [Declaration of Valerie Rojas, Ex. L.]

“[A] suspended corporation may not prosecute or defend an action in a California court. (Citations.) Nor may a suspended corporation appeal from an adverse judgment (Citations), or seek a writ of mandate (Citation). However, if the corporation's status only comes to light during litigation, the normal practice is for the trial court to permit a short continuance to enable the suspended corporation to effect reinstatement (by paying back taxes, interest and penalties) to defend itself in court. (Citation.)” (Timberline, Inc. v. Jaisinghani (1997) 54 Cal.App.4th 1361, 1365–1366.)

Because the corporate cross-complainant remains suspended even after an opportunity to reinstate, the court finds Osmin’s Iron Inc. AKA Osmin’s Iron Work lacks capacity to proceed with the cross-complaint. The court therefore grants the unopposed motion for summary judgment. The court declines to consider the additional arguments given Osmin’s Iron Inc. AKA Osmin’s Iron Work cannot submit any opposition to the motion barring proof of revival both prior to the hearing and opposition due date.

March 20, 2023 trial date to stand.

ADP to give notice to all parties.