Judge: Theresa M. Traber, Case: 21STCV04763, Date: 2022-10-12 Tentative Ruling

Case Number: 21STCV04763    Hearing Date: October 12, 2022    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     October 12, 2022                   TRIAL DATE: February 21, 2023

CASE:                         Susan Primorac v. 901 South Broadway Limited Partnership, et al.

CASE NO.:                 21STCV04763           

MOTION TO SET ASIDE/VACATE DEFAULT

MOVING PARTY:               Defendant Royal Security Group, Inc.

RESPONDING PARTY(S): Plaintiff Susan Primorac.

CASE HISTORY:

·         02/08/21: Complaint filed

·         06/25/21: Cross-Complaint filed by 901 South Broadway, LP as to Susan Primorac and Royal Security Group, Inc.

·         01/13/22: Appeal filed by Defendant 901 South Broadway, LP. 

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff rented an apartment in Defendants’ building. She alleges that the building’s security guard physically attacked her, which caused her to suffer from PTSD, and that Defendants refused to rent her a parking space to accommodate her disability (the PTSD). 

In a cross-complaint, Defendant 901 South Broadway alleges that Plaintiff breached the written lease agreement and that Defendant Royal Security was negligent in performing its duties. 

Defendant Royal Security Group, Inc. moves to set aside a default entered against it.

TENTATIVE RULING:

Defendant Royal Security Group, Inc.’s motion to set aside the default is DENIED without prejudice.

DISCUSSION:

Request for Judicial Notice

            Plaintiff requests that the Court take judicial notice of two printouts from the California Secretary of State Website Business Search and History results for Defendant Royal Security Group, Inc., as of September 29, 2022. Plaintiff’s request is GRANTED pursuant to Evidence Code sections 452(c) (official acts) and (h) (facts not reasonably subject to dispute and capable of immediate and accurate determination by resort to sources of indisputable accuracy).

Procedural Defect

            Defendant has not included a proposed answer with its motion, as required by Code of Civil Procedure sections 473(b) and 473.5 under which Defendant seeks relief. For this reason alone, the Court would be empowered to deny the motion. However, there are other issues in this matter which the Court thinks it appropriate to address.

Suspended Status

            Plaintiff opposes this motion on the grounds that Defendant is a suspended corporation.

            A suspended corporation that has not been reinstated lacks the right or capacity to defend an action or appeal from an adverse decision. (See, e.g., Boyle v. Lakeview Creamery Co. (1937) 9 Cal.2d 16,20.) When a corporate defendant’s suspended status comes to light, the court must strike the party’s pleadings and refuse to consider its defenses. (Alhambra-Shumway Mines, Inc. v. Alhambra Gold Mine Corp. (1957) 155 Cal.App.2d 46, 51.)

            However, a suspended corporation may regain its corporate powers by filing all required tax returns, paying the necessary taxes, penalties or fees due, and applying to the Franchise Tax Board for a certificate of revivor. (Rev. & Tax. Code § 23305.) A reinstatement or revivor is “without prejudice to any action, defense, or right which has been accrued by reason of the original suspension or forfeiture.” (Rev. & Tax. Code § 23305a.) Further, a claim of lack of corporate capacity to defend a civil action because of its suspended status ‘is a plea in abatement which is not favored in law.’ (Traub Co. v. Coffee Break Service, Inc. (1967) 66 Cal.2d 368, 370.) “The primary purpose of statutes depriving suspended corporations of privileges enjoyed by a going concern, including the capacity to sue or defend litigation, is to motivate delinquent corporations to pay back taxes or file missing statements.” (Cadle Co. v. World Wide Hospitality Furniture, Inc. (2006) 144 Cal.App.4th 504, 512 [internal citations omitted].) “The suspension statutes are not intended to be punitive. Once the statutory goals underlying suspension are met, no purpose is served by imposing additional penalties.” (Id.) “When a corporation's suspended status “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 ... to defend itself in court. [Citation.]” (Timberline, Inc. v. Jaisinghani (1997) 54 Cal.App.4th 1361, 1366.)

            Here, according to the California Secretary of State, Defendant is a suspended corporation. (Plaintiff’s RJN Exhs. A-B.) Defendant is therefore not entitled to appear in this action. A short continuance would therefore be appropriate in this matter. However, in light of the above-described procedural defect, the Court instead will deny the motion without prejudice.

CONCLUSION:

Accordingly, Defendant Royal Security Group, Inc.’s motion to set aside the default is DENIED without prejudice.

Moving Party to give notice.

IT IS SO ORDERED.

Dated: October 12, 2022                                 ___________________________________

                                                                                    Theresa M. Traber

                                                                                    Judge of the Superior Court

            Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.