Wednesday, December 19, 2012

V & P Trading v. United Charter (Cal. Ct. App. - Dec. 19, 2012)

I love this strategy.

When you're sued by a corporation, find out if the corporation's charter has been suspended (for nonfiling, nonpayment of taxes, etc.).  If you find out they're indeed suspended, do not raise the corporation's lack of capacity as a defense in your answer.  Nor should you file a demurrer or motion for judgment on the pleadings.  That would only notify defendant of the problem, and they'll obtain a revivor by paying their taxes, filing the relevant documents, etc.  That'll let the lawsuit go forward.

Here's what you do instead:  assert only a statute of limitations defense in your answer.  Wait for the limitations period to expire.  THEN file a motion to dismiss (or summary judgment motion, etc.) on limitations grounds.  Because at that point, plaintiff's screwed.  They can still get a revivor, but the fact that they were suspended mean the filing of the lawsuit didn't toll the limitations period.  So they lose.  Even if, on the merits, they're right.

I'm not saying that defendant deliberately did this here.  Indeed, in light of the defendant's somewhat inexplicable discovery strategy, there's some reason to believe they didn't.

But they should have.  And so should you.

And when you do, cite this case as proof that the strategy works.  With a footnote citing this post as proof that your approach isn't sleazy, but rather a product of zealous advocacy that totally rocks.

Because -- as I half-jokingly tell my students -- a procedural victory is often even sweeter than a victory on the merits.  Because it proves you're the better lawyer.  Even if your case stinks.