Judge: Yolanda Orozco, Case: 20STCV48933, Date: 2022-10-26 Tentative Ruling
Case Number: 20STCV48933 Hearing Date: October 26, 2022 Dept: 31
MOTION FOR JUDGMENT ON THE PLEADINGS IS CONTINUED
Background
This action arises out of a landlord’s supposed failure to return a commercial tenant’s security deposit and a landlord’s wrongful disposal of tenant’s personal possessions without the tenant’s permission.
On December 22, 2020, Ariadna Jacob and Influences, Inc. (“Plaintiffs”) initiated the instant action against Levi Estates, LLC (“Defendant”).
The operative Second Amended Complaint (SAC) asserts causes of action for: (1) Conversion; (2) Breach of Contract; and (3) Violation of Civil code section 1950.5(1).
On October 25, 2022, Defendant Levi Estates, LLC filed a Cross-Complaint against Plaintiffs alleging: (1) Breach of Contract; (2) Waste; (3) Negligence; and (4) Conversion.
On September 14, 2022, Defendant Levi Estates moved to Judgment on the Pleadings on Plaintiff’s SAC and to Strike Influences, Inc’s answer to the Cross-Complaint.
Plaintiffs filed an opposition on October 17, 2022. Defendant Levi filed a reply on October 18, 2022.
Legal Standard
“A motion for judgment on the pleadings performs the same function as a general demurrer, and hence attacks only defects disclosed on the face of the pleadings or by matters that can be judicially noticed.” (Burnett v. Chimney Sweep (2004) 123 Cal.App.4th 1057, 1064.) “In deciding or reviewing a judgment on the pleadings, all properly pleaded material facts are deemed to be true, as well as all facts that may be implied or inferred from those expressly alleged.” (Fire Ins. Exchange v. Superior Court (2004) 116 Cal.App.4th 446, 452.) When considering demurrers and judgment on the pleadings, courts read the allegations liberally and in context. (Wilson v. Transit Authority of City of Sacramento (1962) 199 Cal.App.2d 716, 720-21.) A motion for judgment on the pleadings does not lie as to a portion of a cause of action. (Id.) “In the case of either a demurrer or a motion for judgment on the pleadings, leave to amend should be granted if there is any reasonable possibility that the plaintiff can state a good cause of action.” (Gami v. Mullikin Medical Ctr. (1993) 18 Cal.App.4th 870, 876.) A non-statutory motion for judgment on the pleadings may be made any time before or during trial. (Stoops v. Abbassi (2002) 100 Cal.App.4th 644, 650.)
EVIDENTIARY OBJECTIONS
Defendant filed Objections to the Declaration of David N. Lake and to the attached Exhibit.
1. Objection to Paragraph 1, lines 8-9: “a true and correct copy of a letter [f]rom Daniel Nunez, the CEO of Total Liability Consultants to Ariadna Jacob, CEO of Influences.”
2. Objection to Paragraph 1, lines 9-10: “the letter ha[s] been redacted to preserve privacy and confidentiality”
3. Objection to Exhibit A to Opposition.
Objections Nos. 1 to 2 are OVERRULED, and Objection No. 3 is SUSTAINED.
REQUEST FOR JUDICIAL NOTICE
Defendant requests Judicial Notice of the following:
1) State of Delaware, Secretary of State, entity details for Influences, Inc., a copy of which is attached as Exhibit 1.
2) State of California, Secretary of State, Statement and Designation by Foreign Corporation for Influences, Inc., a copy of which is attached as Exhibit 2.
3) State of California, Secretary of State, Statement of Information, a copy of which is attached as Exhibit 3.
4) State of California, Secretary of State, Certificate of Status, for Influences, a copy of which is attached as Exhibit 4.
5) State of California, Secretary of State, history for Influences, a copy of which is attached as Exhibit 5.
Discussion
Defendant’s motion is based on the allegation that Plaintiff Influences, Inc. has lost its standing with the California Secretary of State and thus cannot prosecute, defend, or maintain the current action. (Corp. Code, § 2105.)
Plaintiffs Ariadna Jacob and Influences, Inc. commenced this action on December 22, 2020, despite the fact that Influences’ corporate status in California was deemed forfeited by the Franchise Tax Board on October 1, 2020.
A corporation whose powers have been suspended for nonpayment of the corporate franchise tax lacks capacity to sue in California courts; and, if sued, it lacks capacity to defend. (Rev. & Tax. Code, § 23301; Reed v. Norman (1957) 48 Cal.2d 338, 342; see also Bourhis v. Lord (2013) 56 Cal.4th 320, 324.) It is an abuse of discretion to deny the corporation's request for a continuance in order to pay delinquent taxes and obtain a certificate of revivor. (See Color-Vue, Inc. v. Abrams (1996) 44 CA4th 1599, 1606.)
Plaintiffs assert Influences is in the process of reinstatement of its corporate status. (Lake Decl. ¶ 2, Ex. A.) Exhibit A attached to the opposition is alleged to be a true and correct copy of a letter from Daniel Nunez, the CEO of Total Liability Consultants who will be doing the corporate income tax returns for Influences. (Id.)
Defendant objects to Plaintiffs’ opposition on the basis that Influences has offered no evidence that it has paid any penalties, or fees or applied for a certificate of reinstatement to merit a continuance. Therefore, Defendant request the Court render Judgment on the pleading in its favor and strike Influences’ answer to Levi Estate’s Cross-Complaint and enter default as to Plaintiff Influences.
“[I]f 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, 1366.) The purpose of section 23301 of the Revenue and Taxation Code “is to put pressure on the delinquent corporation to pay its taxes, and that purpose is satisfied by a rule which views a corporation's tax delinquencies, after correction, as mere irregularities. . . There is little purpose in imposing additional penalties after the taxes have been paid.” (Id. at 1367 [italics original].)
The Court CONTINUES the hearing to give Influences, Inc. time to cure its suspension.
Conclusion
The hearing is CONTINUED to January 27, 2023, at 8:30 a.m. The Post Mediation Conference is advanced and continued to the same date and time.
Plaintiff to give notice.