Frank Jorgensen v. Hows Markets, LLC

Case 8:21-cv-00250-JLS-ADS Document 61 Filed 06/29/22 Page 1 of 2 Page ID #:478 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES – GENERAL Case No. 8:21-cv-00250-JLS-ADS Date: June 29, 2022 Title: Frank Jorgensen et al v. Hows Markets, LLC et al Present: Honorable JOSEPHINE L. STATON, UNITED STATES DISTRICT JUDGE D. Rojas N/A Deputy Clerk Court Reporter ATTORNEYS PRESENT FOR PLAINTIFFS: ATTORNEYS PRESENT FOR DEFENDANTS: Not Present Not Present PROCEEDINGS: (IN CHAMBERS) ORDER REQUIRING HOWS MARKETS LLC TO SHOW CAUSE, IN WRITING, WHY ITS PLEADINGS SHOULD NOT BE STRICKEN On June 22, 2022, Plaintiffs filed a Notice of HOWS Markets LLC’s Incapacity to Sue or Defend. (Notice, Doc. 58.) In the Notice, Plaintiffs note that HOWS “lacks the capacity to sue or be sued in this action because its corporate powers have been suspended by the State of California.” (Id. at 1.) As support, Plaintiffs have attached a “copy of a California Business Search status report from the California Secretary of State’s website showing that HOWS’s corporate powers have been suspended.” (Id.) Under California law, “[a] corporation that has had its powers suspended ‘lacks the legal capacity to prosecute or defend a civil action during its suspension.’” City of San Diego v. San Diegans for Open Gov’t, 3 Cal. App. 5th 568, 577 (2016), as modified on denial of reh’g (Oct. 17, 2016). A corporation that has had its powers suspended cannot, among on other things, have an answer filed on its behalf. Id. (“We do not understand why BLC would represent SDOG in the Validation Action and file a verified answer on behalf of SDOG when it knew, as did the corporation, that SDOG was suspended.”). In cases involving a suspended corporation, California courts have noted that an “appropriate remedy is to strike the corporation’s pleadings and refuse to consider its defenses.” Cadle Co. v. World Wide Hosp. Furniture, Inc., 144 Cal. App. 4th 504, 513 (2006). “Alternatively, the plaintiff may proceed with a default prove-up or, on the court’s own ______________________________________________________________________________ CIVIL MINUTES – GENERAL 1 Case 8:21-cv-00250-JLS-ADS Document 61 Filed 06/29/22 Page 2 of 2 Page ID #:479 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES – GENERAL Case No. 8:21-cv-00250-JLS-ADS Date: June 29, 2022 Title: Frank Jorgensen et al v. Hows Markets, LLC et al motion or at the corporation’s request, the proceedings may be briefly continued to permit the incapacitated entity to secure reinstatement.” Id. Accordingly, HOWS is ORDERED to show cause, in writing, why this Court should not strike the pleadings and not consider any defenses as to HOWS in this action. HOWS is ordered to file its response within seven (7) days of this Order’s issuance. Initials of Deputy Clerk: droj ______________________________________________________________________________ CIVIL MINUTES – GENERAL 2