The Rossdale Group v. Walton
H043476
| Cal. Ct. App. | Jun 15, 2017Background
- Walton (a California attorney) sued an entity called "The Rossdale Group, LLC" in 2010; that suit was dismissed with prejudice in 2012.
- In May 2012 (same day as dismissal), Miami Legal Resources, LLC (doing business as The Rossdale Group, LLC) sued Walton for malicious prosecution.
- "The Rossdale Group, LLC" was a fictitious business name registered to Miami Legal; Miami Legal dissolved in September 2014.
- Walton moved to dismiss in January 2016, arguing lack of standing/jurisdiction because the named plaintiff was a fictitious name and the underlying Florida LLC had dissolved.
- Miami Legal (pleading as Rossdale) opposed, claiming its assets and causes of action were transferred to a Delaware successor; evidence of assignment was not in the record.
- Trial court granted dismissal for lack of standing/capacity; the Court of Appeal reversed, holding the motion did not raise standing or jurisdictional defects and that use of a fictitious name does not alone defeat a plaintiff's case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a plaintiff suing under a fictitious business name lacks standing or deprives the court of jurisdiction | Miami Legal argued use of fictitious name was permissible and it remained the real party in interest (or had a successor) | Walton argued the suit must be dismissed because the named plaintiff was a fictitious name and the underlying LLC had dissolved, eliminating capacity to sue | Reversed dismissal: fictitious name alone does not create standing or jurisdictional defects; dissolution/capacity issues are not federal-style standing questions |
| Whether Code Civ. Proc. § 367 supports dismissal for lack of standing/jurisdiction | Rossdale/Miami Legal: § 367 requires suit by real party in interest but does not import federal standing limits | Walton: § 367 means the court lacks jurisdiction if the named plaintiff is not a real party in interest | Court: § 367 is about real party in interest, not federal Article III standing; it does not strip state courts of subject matter jurisdiction here |
| Whether a party may be precluded for failure to timely raise capacity/plea in abatement | Miami Legal: Walton waived capacity challenge by not pleading it properly; dismissal was procedurally improper | Walton: capacity/abating defects can be raised at any time as jurisdictional | Court: Pleas in abatement must be timely; Walton filed a motion to dismiss rather than an amended answer, but because factual disputes were minimal the appellate standard is de novo; nevertheless the core contention was miscast as standing/jurisdictional rather than capacity |
| Whether dissolution of the underlying LLC automatically terminates the suit or deprives court of power | Miami Legal: assets and causes were transferred to successor so litigation could continue | Walton: dissolution meant the plaintiff entity "disappeared" and had no legal capacity to sue | Court: Suspension or dissolution affects capacity to sue (a litigable defect), not subject matter jurisdiction or standing; dissolution alone does not nullify the action as a jurisdictional bar in this context |
Key Cases Cited
- Traub Co. v. Coffee Break Service, Inc., 66 Cal.2d 368 (plea in abatement for corporate incapacity must be supported by facts)
- Common Cause v. Board of Supervisors, 49 Cal.3d 432 (standing in California distinguished from federal Article III standing)
- Jasmine Networks, Inc. v. Superior Court, 180 Cal.App.4th 980 (Code Civ. Proc. § 367 is not a federal-style standing test)
- Grosset v. Wenaas, 42 Cal.4th 1100 (no Article III–style standing requirement under California Constitution)
- Color-Vue, Inc. v. Abrams, 44 Cal.App.4th 1599 (distinguishing capacity to sue from standing; timing of pleas in abatement)
- Doe v. Lincoln Unified School Dist., 188 Cal.App.4th 758 (using a fictitious name does not implicate standing; use of fictitious name permissible)