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Lack of capacity to sue as grounds for a special demurrer in California

by Stan Burman

Lack of capacity to sue as grounds for a special demurrer in California is the topic of this blog post.

Specially demurring in California for lack of capacity to sue is different from filing a general demurrer for lack of standing in that capacity is the right to come into Court, and standing is the right to relief in Court.

California law is settled that capacity to sue is a technical objection that is strictly construed and which must be properly raised in a timely manner or the objection of lack of capacity may be waived.

A California Court of Appeal has stated in a published decision that the reasoning behind the rule that a party must have the capacity to sue is so that whatever judgment is rendered in a case should be binding on the parties involved, and thus will effectively resolve the litigation.

The Court of Appeal also stated that lack of capacity is not a jurisdictional defect, and must be properly raised or the objection may be waived.

Lack of capacity to sue as grounds for a special demurrer in California is used in situations where:

(1) Plaintiff is a California Corporation or Limited Liability Company that has been suspended for nonpayment of the franchise tax and lacks the capacity to sue or defend pursuant to Revenue & Taxation Code § 23301;

(2) Plaintiff is a California Corporation that has been suspended for failure to file the biennial statement required by Corporations Code § 1502;

(3) Plaintiff is a foreign corporation or limited liability company that has failed to obtain a “certificate of qualification” from the California Secretary of State as required by Corporations Code § 2105 and therefore may not “maintain any action or proceeding commenced prior to compliance with Section 2105” upon intrastate business as specified in Corporations Code § 2203(c), and

(4) Plaintiff is a foreign corporation or limited liability company that has been suspended in its home state for nonpayment of franchise taxes.

Law authorizing lack of capacity to sue as grounds for a special demurrer in California.

Specially demurring for lack of capacity to sue in California is authorized by Code of Civil Procedure section 430.10 which states, in pertinent part: “The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in section 430.30, to the pleading on any one or more of the following grounds... (b) The person who filed the pleading does not have the legal capacity to sue.”

In order to properly raise lack of capacity to sue as grounds for a special demurrer in California the lack of capacity must appear on the face of the complaint or from matters subject to judicial notice such as corporate or limited liability records from the California Secretary of State.

The objection of lack of capacity to sue can be raised as an affirmative defense in the answer if the lack of capacity does not appear on the face of the complaint or from matters subject to judicial notice.

The California Supreme Court has stated that a demurrer may challenge the legal sufficiency of an opponent's pleading based on defects that appear on the face of the pleading under attack and/or from matters outside the pleading that are judicially noticeable.

Meet and confer requirement before raising lack of capacity to sue as grounds for a special demurer in California.

Before filing any demurer to a complaint or cross-complaint in California the moving party must comply with the requirements of Code of Civil Procedure section 430.41.

Code of Civil Procedure § 430.41 states in pertinent part that,

“(a) Before filing a demurrer pursuant to this chapter, the demurring party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer. If an amended complaint, cross-complaint, or answer is filed, the responding party shall meet and confer again with the party who filed the amended pleading before filing a demurrer to the amended pleading.

(1) As part of the meet and confer process, the demurring party shall identify all of the specific causes of action that it believes are subject to demurrer and identify with legal support the basis of the deficiencies. The party who filed the complaint, cross-complaint, or answer shall provide legal support for its position that the pleading is legally sufficient or, in the alternative, how the complaint, cross-complaint, or answer could be amended to cure any legal insufficiency.

(2)  The parties shall meet and confer at least five days before the date the responsive pleading is due. If the parties are not able to meet and confer at least five days prior to the date the responsive pleading is due, the demurring party shall be granted an automatic 30-day extension of time within which to file a responsive pleading, by filing and serving, on or before the date on which a demurrer would be due, a declaration stating under penalty of perjury that a good faith attempt to meet and confer was made and explaining the reasons why the parties could not meet and confer. The 30-day extension shall commence from the date the responsive pleading was previously due, and the demurring party shall not be subject to default during the period of the extension. Any further extensions shall be obtained by court order upon a showing of good cause.

(3) The demurring party shall file and serve with the demurrer a declaration stating either of the following:

(A) The means by which the demurring party met and conferred with the party who filed the pleading subject to demurrer, and that the parties did not reach an agreement resolving the objections raised in the demurrer.

(B) That the party who filed the pleading subject to demurrer failed to respond to the meet and confer request of the demurring party or otherwise failed to meet and confer in good faith.

(d) This section does not apply to the following civil actions:

(1) An action in which a party not represented by counsel is incarcerated in a local, state, or federal correctional institution.

(2) A proceeding in forcible entry, forcible detainer, or unlawful detainer..” (Emphasis added).

Sample special demurrer for lack of capacity in California for sale.

Attorneys or parties in California that would like to view a portion of a 20 page sample special demurrer for lack of capacity in California containing brief instructions, a memorandum of points and authorities with citations to case law and statutory authority, sample request for judicial notice, sample declaration regarding compliance with Code of Civil Procedure section 430.41 and proof of service sold by the author can see below.

Sample Special Demurrer for Lack of Capacity in California by Stan Burman on Scribd

Over 300 sample legal documents for California and Federal litigation for sale.

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The author of this blog post, Stan Burman, is a retired litigation paralegal that worked in California and Federal litigation from January 1995 through September 2017 and has created over 300 sample legal documents for sale.

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DISCLAIMER:

Please note that the author of this blog post, Stan Burman is NOT an attorney and as such is unable to provide any specific legal advice. The author is NOT engaged in providing any legal, financial, or other professional services, and any information contained in this blog post is NOT intended to constitute legal advice.

The materials and information contained in this blog post have been prepared by Stan Burman for informational purposes only and are not legal advice. Transmission of the information contained in this blog post is not intended to create, and receipt does not constitute, any business relationship between the author and any readers. Readers should not act upon this information without seeking professional counsel.

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