Judge: Theresa M. Traber, Case: 22VEC00109, Date: 2022-08-08 Tentative Ruling
Case Number: 22VEC00109 Hearing Date: August 8, 2022 Dept: 47
Tentative Ruling
Judge Theresa M. Traber, Department 47
HEARING DATE: August 8, 2022 TRIAL DATE:
NOT SET
CASE: Freddy Buraye v. Law Offices of William
J. Houser, APLC.
CASE NO.: 22VECV00109
MOTION
TO STRIKE ANSWER OF THE LAW OFFICES OF WILLIAM J. HOUSER
MOVING PARTY: Plaintiff Freddy Buraye
RESPONDING PARTY(S): Law Offices of
William J. Houser, APLC
STATEMENT
OF MATERIAL FACTS AND/OR PROCEEDINGS:
This is an
action, filed on January 25, 2022, for breach of contract against a dissolved
law corporation. The corporation was dissolved in 2014, and the sole
practitioner and shareholder died in 2016.
Plaintiff moves to strike the
answer of the Law Offices of William J. Houser in its entirety.
TENTATIVE RULING:
Plaintiff’s Motion to Strike the entirety of the answer filed by the Law
Offices of William J. Houser is CONTINUED to September 14, 2022 at 8:30 a.m.
for a non-appearance case review. At
that time, the Court will set the matter for a subsequent hearing or take the
matter under submission and issue a final ruling as the Court deems
appropriate.
Defendant is to serve and file a verified declaration under penalty of
perjury from Ms. Marla Lopez to address the Court’s questions as to her status,
authority, and actions regarding Defendant, the winding up of its affairs, its
dissolution, and the retention of Mr. Clough as counsel on or before September
5, 2022.
Plaintiff shall serve and file a response to this Declaration by
September 12, 2022.
No further briefing will be permitted unless ordered by the Court.
DISCUSSION
Plaintiff moves to strike the
answer of the Law Offices of William J. Houser in its entirety.
Meet and Confer
Before filing a motion to strike, the moving party shall meet and confer
in person or by telephone with the party who has filed the pleading subject to
the motion to strike and file a declaration detailing their meet and confer
efforts. Code Civ. Proc., § 435.5(a).
However, an
insufficient meet and confer process is not grounds to grant or deny a motion
to strike. Code Civ. Proc., §
435.5(a)(4). The Declaration of Plaintiff’s counsel Matthew C. Mickelson does
not show that Plaintiff engaged in any attempt to meet and confer before filing
this motion. (Mickelson Decl. ISO Mot.) Plaintiff has not satisfied this
requirement. Nevertheless, the Court will review the motion on its merits.
Timeliness
A party may bring a motion to strike
within the time allowed to respond to a pleading. Code Civ. Proc. § 435(b);
Cal. Rules of Court 3.1322(b). A motion to strike all or part of an answer to a
complaint must therefore be brought within 10 days. See Code Civ. Proc. §
430.40(b); Cal. Rules of Court 3.1322(b). However, the Court has the power to
strike out all or any part of a pleading not drawn or filed in conformity with
the laws of this state, a court rule, or an order of the court on its own
motion. Code Civ. Proc. § 436(b). The Court therefore has the authority to
consider the matter at any time, even after the statutory deadline has passed. CPF
Agency Corp v. R&S Towing (2005) 132 Cal.App.4th 1014, 1021 overruled
on other grounds in Dan’s City Used Cars Inc. v. Pelkey (2013) 569 U.S.
251.
The answer filed by the Law Offices
of William J. Houser was filed May 27, 2022. Plaintiff filed this motion to
strike on July 13, 2022. Plaintiff’s motion is therefore untimely under section
435. However, the Court will exercise its authority to consider the matter
despite the late filing of this motion.
Legal Standard
The court may, upon a motion, or at
any time in its discretion, and upon terms it deems proper, strike any irrelevant,
false, or improper matter inserted in any pleading. Code Civ. Proc., § 436(a).
The court may also strike all or any part of any pleading not drawn or filed in
conformity with the laws of this state, a court rule, or an order of the court.
Id., § 436(b). The grounds for a motion to strike are that the
pleading has irrelevant, false or improper matter, or has not been drawn or
filed in conformity with laws. Id.§ 436. The grounds for moving to strike must
appear on the face of the pleading or by way of judicial notice. Id.§
437. “When the defect which justifies striking a complaint is capable of cure,
the court should allow leave to amend.” Vaccaro v. Kaiman (1998)
63 Cal.App.4th 761, 768. A motion to
strike can be used where the complaint or other pleading has not been drawn or
filed in conformity with applicable rules or court orders. Code Civ.
Proc., § 436(b). This provision is for "the striking of a pleading due to
improprieties in its form or in the procedures pursuant to which it
was filed." Ferraro v. Camarlinghi (2008) 161
Cal.App.4th 509, 528 (emphasis in original).
Analysis:
Plaintiff moves to strike the answer
of the Law Offices of William J. Houser, APLC on the grounds that Larry Clough,
the attorney who filed the answer, is not Defendant’s legal counsel.
“[A]n answer will be stricken on
motion if filed by an attorney without authority . . . . , or by a stranger to
the action. . . . .By the same standard an application to file a proposed
answer at the request of an unauthorized representative of a defendant or on
behalf of a stranger should be denied. . . ..” (Kellar v. Hendey (1961)189
Cal. App. 2d 86, 87–88.) “It is enough to say that if he were possessed of a
most meritorious case against the plaintiff he was not entitled to inject that
case into a case instituted by the plaintiff . . . against [the actual
defendant] by the simple device of filing an answer in it.” (Milstein v.
Turner (1951) 107 Cal. App. 2d 184, 185.)
It is well settled that the
attorney-client relationship is generally created by an express or implied
contract. (See, e.g., Koo v. Rubio’s Restaurants, Inc. (2003) 109
Cal.App.4th 729.) However, an attorney who purports to represent a party “may .
. .be compelled by the Court to show his authority to appear for such party;
and this may be required of him at the instance of the opposite party as well
as of the party for whom he appears.” (People v. Mariposa Co., (1870) 39
Cal. 683, 685; see also McGee v. Superior Ct., (1985) 176 Cal. App. 3d
221, 225 [party may provide evidence rebutting any inference that attorney
actually represents other party].) “[T]he Court may require an attorney to show
special authority, upon the application of the opposite party, when justice
requires it.” (Clark v. Willett (1868) 35 Cal. 534, 540.) The mechanism
by which an opposing party may point out such a lack of authority is a
nonstatutory motion to dismiss, when sought by a defendant against a plaintiff,
or by a motion to strike the answer, when sought by a plaintiff against a
defendant. (See Baker v. Boxx, (1991) 226 Cal.App.3d 1303, 1311-12.)
Plaintiff contends that Mr. Clough
is not the attorney for Defendant, because the only remaining officer of the
corporation is Marla Lopez, the Secretary of the Corporation. (Mickelson Decl.
Exh. 1.) Corporate officers are regarded by law as agents of the corporate
entity in their dealings with third persons. The corporation is bound by such
dealings, so long as they were “within the scope of the authority, actual or
apparent, conferred by the board or within the agency power of the officer
executing it …” (Corps. Code § 208(b); GAB Business Services, Inc. v.
Lindsey & Newsom Claim Services, Inc. (2000) 83 Cal.App.4th 409, 421
[disapproved on other grounds in Reeves v. Hanlon (2004) 33 Cal.4th
1140].) Plaintiff contends that Mr. Clough indicated in email correspondence
that he believes that Ms. Lopez is no longer an officer of Defendant.
In opposition, Defendant has
provided two declarations in support of the motion, one from the executrix of
the Houser estate, which Plaintiff correctly observes in reply has no bearing
on this action, and one from Mr. Clough. Attached to Mr. Clough’s declaration
is an email purportedly from Marla Lopez authorizing him to represent
Defendant. (Clough Decl. Exh. A.) However, Plaintiff objects to this evidence
as unauthenticated hearsay and, therefore, inadmissible. The Court agrees that
the document is not authenticated and is inadmissible hearsay on its face.
(Evid. Code §§ 1200, 1401.) Defendant does not provide a verified declaration
from Ms. Lopez under penalty of perjury which would suffice to show the Court
that Defendant had retained Mr. Clough as counsel.
Further, as Plaintiff observes in
reply, if the Court were to consider the email as admissible evidence, Ms.
Lopez stated that she was Defendant’s former Secretary. (Clough Decl.
Exh. A.) Thus, Plaintiff argues, as she was the last remaining officer of the
Corporation with the authority, actual or apparent, to enlist Mr. Clough as
counsel, her having apparently relinquished her status with the Corporation
divested her of that authority. (See Corps. Code § 208(b).) Therefore,
Plaintiff contends, there is no person remaining with the authority to hire Mr.
Clough as Defendant’s attorney, as Defendant is now a defunct corporation.
Dissolution of a corporation, by
affirmative conduct or by operation of law, is not a change in the
corporation’s status but rather a change in its permitted scope of activity. (Penasquitos,
Inc. v. Superior Court (1991) 53 Cal.3d 1180, 1190.) A corporation’s
dissolution should not be construed as its death, “but merely as its retirement
form active business. (Id.) Dissolved corporations necessarily retain
the ability to defend against claims based on their pre-dissolution affairs. (Id.
[“a claim for damages based on the corporation’s predissolution activities is
an affair of the corporation needing to be wound up after the corporation’s
normal business activities have ceased”].) Plaintiff does not dispute that an
authorized agent of a dissolved corporation retains the authority to act on the
corporation’s behalf for the purpose of winding up the corporation’s affairs.
(See Corps. Code § 2001(a) [providing that officers after commencement of a
dissolution proceeding may employ agents and attorneys on behalf of the
corporation to liquidate and wind up its affairs].)
Here, Plaintiff’s central
contention is that Ms. Lopez is no longer an officer of the corporation, and thus
no longer has the authority to hire legal counsel on behalf of the corporation
under Corporations Code section 2001(a). It is not clear, from the evidence
proffered by Defendant whether or not this is the case. Although Ms. Lopez
states that she is the “former” secretary of the corporation, she also appears
to have exercised authority as the secretary of the corporation to retain Mr.
Clough as Defendant’s legal counsel. As stated, an email purportedly from the
remaining officer of the corporation is not sufficient to establish authority
to hire legal counsel. However, a statement by that officer referring to
herself as the “former” secretary is also not sufficient to establish that she
has, in fact, divested herself of the authority and obligations of that office.
It is certainly conceivable that a lay person might refer to themselves as the
“former” secretary of a defunct law firm after the sole practitioner is
deceased, without intending to divest themselves of the authority and
obligations of that position while the corporation is winding up its affairs.
The Court does not think it
appropriate to strike the answer based on the admissible evidence presented
alone. The defect in Defendant’s evidence may be readily curable by a verified
declaration from Ms. Lopez, under penalty of perjury, stating whether she has
taken any affirmative steps to resign as Secretary of the Corporation, or has
retained her position, and whether she, as Secretary of the Corporation,
retained Mr. Clough as counsel for Defendant. The Court will therefore exercise
its discretion and inherent authority to permit Defendant to obtain, serve, and
file a verified declaration from Ms. Lopez to address the Court’s questions as
to her status, authority, and actions regarding Defendant, the winding up of
its affairs, its dissolution, and the retention of Mr. Clough as counsel.
CONCLUSION:
Accordingly, Plaintiff’s Motion to Strike the entirety of the answer
filed by the Law Offices of William J. Houser is CONTINUED to September 14, 2022
at 8:30 am for a non-appearance case review. At that time, the Court will set
the matter for a subsequent hearing or take the matter under submission and
issue a final ruling as the Court deems appropriate.
Defendant is to serve and file a verified declaration under penalty of
perjury from Ms. Marla Lopez to address the Court’s questions as to her status,
authority, and actions regarding Defendant, the winding up of its affairs, its
dissolution, and the retention of Mr. Clough as counsel on or before September
5, 2022.
Plaintiff shall serve and file a response to this Declaration on or
before September 12, 2022.
No further briefing will be permitted unless ordered by the Court.
Moving party to give notice, unless
waived.
IT IS SO ORDERED.
Dated: August 8, 2022 ___________________________________
Theresa
M. Traber
Judge
of the Superior Court