Judge: Stephen P. Pfahler, Case: 21CHCV00339, Date: 2022-08-31 Tentative Ruling

Case Number: 21CHCV00339    Hearing Date: August 31, 2022    Dept: F49

Dept. F-49

Date: 8-31-22 c/f 6-8-22

Case #: 21CHCV00339

Trial Date: 2-6-23

QUASH

MOVING PARTY: Defendants, Guillermo Macias, et al.

RESPONDING PARTY: Plaintiff, Laysion, LLC

RELIEF REQUESTED

Motion to Quash Service of the Summons    

SUMMARY OF ACTION

Between March 2019 and April 2021, Plaintiff Laysion, LLC alleges Defendants Guillermo Macias and Colt International Clothing, Inc. ordered one million dollars ($1,000,000) in certain lighting equipment. Defendants paid $210,000, and presented another $800,000 in checks, which were rejected for insufficient funds. Plaintiff alleges an outstanding balance of $790,000.

On April 30, 2021, Plaintiff filed its complaint for Breach of Contract, Common Counts, and Fraud. On August 19, 2021, Plaintiff filed a first amended complaint for Fraud – Civil Code section 1719, Fraud Civil Code section 1572(3), Conversion – Civil Code section 3336, Breach of Written Contract, Breach of Oral Contract, Account Stated –Sale and Delivery, Quantum Meruit, and Declaratory Relief – Constructive Trust.

On December 1, 2021, the court sustained the demurrer to the second and third causes of action for Fraud Civil Code section 1572(3), Conversion, and overruled the demurrer to the seventh cause of action for Quantum Meruit. The court found the motion to strike moot in part, and denied the remainder. Defendants answered the complaint on January 18, 2022.

On February 4, 2022, the court denied Defendants’ motion to disqualify Plaintiff’s counsel. Defendants filed a notice of appeal on March 16, 2022.[1] On July 21, 2022, the court granted Defendants leave to file an amended answer to the complaint.

RULING: Denied.

Defendants Colt International Clothing, Inc. and Guillermo Macias move to quash service of the summons and complaint on the entity identified as “Colt LED.” Defendants seek relief on grounds that the court lacks jurisdiction over Colt LED, service was improper, and no such entity independently exists, as Colt LED operates as a dba for defendant Colt International Clothing, Inc. Plaintiff in opposition counters that Colt LED was property sued under statutory authority following identification of Colt LED by company principal Zhang. Defendants in reply reiterates improper service based on service of a “non-existent entity.” Defendants also contend that the motion is proper as a challenge to a “void judgment” is always allowed.

Defendants cite code sections regarding proper service of a business entity, but still ultimately rely on the conclusion that because Colt LED constitutes a dba of Colt International Clothing, Inc. any service should be quashed. Other than legal authority regarding the methods for proper service, and denial of mail service follow-up, the motion lacks any substantive support for the sought after relief and instead relies on the self-serving declaration of attorney Fisher.

Plaintiff correctly cites to the statutory authority for the proposition that the dba can effectively be joined as part of any judgment, and that the entity constitutes a potential unincorporated entity with a potential, separate and independent existence. Plaintiff apparently served the dba for purposes of supporting the alter ego allegation in paragraph nine of the operative complaint.

The motion requires consideration of at least two possible outcomes. If the court accepts the argument of Defendants that the dba entity merely constitutes a registered name as part of Colt International Clothing, Inc., then service on it with the intent of establish a basis of separate liability constitutes a null action. There is no separate entity to serve, and service was therefore futile. On the other hand, if the dba constitutes a valid, separate entity, Plaintiff will be required in trial to establish liability against the dba at the time of trial. The court declines to make a finding at this time regarding the validity of the alter ego allegations, or the fundamental existence of the dba as a separate business association, under the guise of a motion to quash for lack of jurisdiction simply based on a declaration and presentation of a fictitious business listing without further evidence and support.

To the extent the motion depends on defective service, from a technical service standpoint, the motion lacks support of improper service. If the entity in fact separately exists (only an assumption for purposes of the motion), the motion lacks support for a finding due to the timing of the motion. On January 5, 2022, “Defendants Guillermo Macias and Colt International Clothing, Inc. dba Colt LED (collectively ‘Defendants)” filed a motion for an order confirming attorney client privilege, etc. The motion in and of itself constituted a general appearance in the case by the dba entity, and therefore a waiver of any right to challenge service of process. (Code Civ. Proc., §§ 418.10, subd. (a), 1014; Sunrise Financial, LLC v. Superior Court (2019) 32 Cal.App.5th 114, 125; Ziller Electronics Lab GmbH v. Superior Court (1988) 206 Cal.App.3d 1222, 1229.)

The court therefore denies the motion.

Multiple motions, including three writs of attachment and a motion for summary adjudication beginning on October 5, 2022 appear on the calendar for the next set of hearings. Again, the court reserves the right to continue any and all dates, due to court congestion, caused in part by continuous requests for relief from the court due to the continuing economic attrition tactics undertaken by the parties. February 6, 2023 trial date to stand.

Moving parties to provide notice.