V & P Trading Co. v. United Charter, LLC
151 Cal. Rptr. 3d 146
Cal. Ct. App.2012Background
- V & P’s corporate powers were suspended by the Franchise Tax Board on December 3, 2007 for nonpayment of taxes.
- On March 5, 2008, goods stored in United Charter’s warehouse were damaged when the roof was removed.
- V & P filed suit against United Charter on August 3, 2010 seeking damages for loss of goods.
- United Charter answered in September 2010 and did not plead lack of capacity to sue due to suspension.
- In December 2010, V & P served special interrogatories; United Charter opposed, seeking discovery sanctions based on suspension.
- After proceedings, the suspension was lifted June 21, 2011; United Charter moved for summary judgment in July 2011 on statute of limitations grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver of lack of capacity to sue versus statute of limitations | Lack of capacity defense not pleaded, so waived; thus timely suit survives. | Statute of limitations defense can stand without pleading lack of capacity. | Waiver not required; statute of limitations defense valid without lack of capacity pleading. |
| Distinction between lack of capacity to sue and statute of limitations | Lack of capacity is separate from limitations; must be pleaded to oppose. | Defense to limitations grounded in suspension is sufficient without pleading lack of capacity. | They are distinct defenses; no need to plead lack of capacity to rely on the statute of limitations. |
| Discovery sanctions as to motion to compel | Sanctions improper because United Charter waited to raise lack of capacity; motion to compel should prevail. | Opposition based on lack of capacity justifies sanctions. | Sanctions reversed; motion to compel should have been granted, so no basis for sanctions. |
Key Cases Cited
- Welco Construction, Inc. v. Modulux, Inc., 47 Cal.App.3d 69 (Cal. Ct. App. 1975) (suspension destroys capacity to sue; revival does not toll statute of limitations)
- Center for Self-Improvement & Community Development v. Lennar Corp., 173 Cal.App.4th 1543 (Cal. Ct. App. 2009) (revival does not retroactively validate filing when statute has run)
- Color-Vue, Inc. v. Abrams, 44 Cal.App.4th 1599 (Cal. Ct. App. 1996) (plea in abatement must be raised early; lack of diligence by party asserting it)
- Traub Co. v. Coffee Break Service, Inc., 66 Cal.2d 368 (Cal. 1967) (plea in abatement must be raised at the outset or waived)
- Nevills v. Shortridge, 146 Cal. 277 (Cal. 1905) (plea in abatement objects to capacity to sue; renewals possible after revival)
- Tingley v. Times Mirror, 151 Cal. 1 (Cal. 1907) (timeliness of defenses; waivers if not raised in answer)
- Vitug v. Griffin, 214 Cal.App.3d 488 (Cal. Ct. App. 1989) (late raising of plea in abatement rarely justified)