Legal Question in Business Law in California

Re: suspended corporation filed a lawsuit against me

no they cannot.

Joel

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Re: suspended corporation filed a lawsuit against me

A suspended corporation cannot sue or defend itself in court. There are exceptions. For example, if the corporotion is getting sued and its insurance policy covers the claim, the courts allow the insurance company to supply a defense for the corporation.

Re: suspended corporation filed a lawsuit against me

A suspended corporation lacks legal capacity to maintain a lawsuit in California state court.

If you have been served with the suspended corporation's summons and complaint, you need to attack them; just ignoring them on the ground that the suit cannot be maintained is insufficient to protect you.

There seem to be three possibilities: filing an answer, a motion to strike, or a demurrer. The choice may depend upon how the complaint is worded (i.e., does it incorrectly allege that the plaintiff is a corporation in good standing) or upon whether this is a limited jurisdiction case (amount in controversy under $25,000) or not.

I would not fail to retain a lawyer to defend the suit just because the plaintiff is suspended. Among other things, the plaintiff can correct its suspension problem if pursuing the suit looks worthwhile to it, then re-file once it is reinstated (by "revivor").

Re: suspended corporation filed a lawsuit against me

This question has been adequately answered below. Be advised if the contract contains an attorney fees clause then the court can order them to pay your attorney fees if you prevail. You need to defend yourself. Seek assistance from an attorney.

Re: suspended corporation filed a lawsuit against me

You've got an interesting question. "Technically" they cannot file and maintain a lawsuit against you. The reality, however, is that they can get revived so that they are no longer suspended and continue the lawsuit against you.

This MAY be costly to them as they have to get up to date on all delinquent taxes. It may just be an oversight for them and not costly or it may be something which they simply cannot afford.

I would probably raise it as an issue at the initial pleading stage of the case, i.e., now. However, you CANNOT simply ignore the lawsuit. Ignoring the lawsuit means that they will automatically win as the issue of the suspension will never be raised.

I would be happy to consult with you regarding this matter.

J. Caleb Donner

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