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Greb v. Diamond International Corp.

April 26, 2010

WALTER GREB ET AL., PLAINTIFFS AND APPELLANTS,
v.
DIAMOND INTERNATIONAL CORPORATION DEFENDANT AND RESPONDENT.



(Super. Ct. for the City & County of San Francisco No. CGC-08-274989), Honorable Peter J. Busch.

The opinion of the court was delivered by: Dondero, J.

CERTIFIED FOR PUBLICATION

Plaintiffs Walter Greb (now deceased) and his wife Karen Greb appeal from the order of the trial court sustaining, without leave to amend, defendant Diamond International Corporation's demurrer to the complaint. The court concluded defendant, a dissolved Delaware corporation, lacked the capacity to be sued because plaintiffs' lawsuit was filed more than three years after defendant's dissolution. We affirm.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

On December 22, 2008, plaintiffs filed a complaint for personal injury and loss of consortium against defendant and several other defendants. The complaint alleged Mr. Greb had suffered injury from exposure to asbestos and asbestos-containing products.

On February 13, 2009, defendant filed a demurrer to the complaint. In the demurrer, defendant alleged it had obtained a corporate dissolution in accordance with the laws of Delaware on July 1, 2005. It asserted it lacked the capacity to be sued when the present complaint was filed because Delaware General Corporation Law section 278 provides that a dissolved corporation shall continue to exist for purposes of winding up its affairs, including prosecuting and defending lawsuits, for a period of only three years from the date of dissolution. Because plaintiffs' complaint was filed more than three years after the dissolution, defendant claimed the lawsuit was barred.

On March 4, 2009, plaintiffs filed their opposition to defendant's demurrer. They argued the lawsuit was permitted under California Corporations Code section 2010 (section 2010), which they asserted took precedence over Delaware law. After the hearing on the demurrer, defendant was allowed to file a surreply brief, which it did on March 19, 2009.

On May 1, 2009, the trial court sustained defendant's demurrer to the complaint without leave to amend.

On June 2, 2009, the trial court filed its order dismissing the complaint with prejudice. This appeal followed.*fn1

DISCUSSION

I. Standard of Review

The resolution of the present case turns on whether California Corporations Code section 2010 applies to a dissolved Delaware corporation. Appellate courts may independently determine the proper interpretation of a statute, as it entails the resolution of a pure question of law. We therefore apply a de novo standard of review. (Farm Raised Salmon Cases (2008) 42 Cal.4th 1077, 1089, fn. 10 [72 Cal.Rptr.3d 112, 175 P.3d 1170].)

II. Alleged Conflict of Law

It is undisputed that the instant lawsuit was filed on December 22, 2008, more than three years after July 1, 2005, the date on which defendant formally dissolved. Relying on North American Asbestos Corp. v. Superior Court (1986) 180 Cal.App.3d 902 [225 Cal.Rptr. 877] (North American II), plaintiffs claim California Corporations Code section 2010 permits lawsuits to be filed against a dissolved foreign corporation irrespective of the date of dissolution. California Corporations Code section 2010 provides that "A corporation which is dissolved nevertheless continues to exist for the purpose of winding up its affairs, prosecuting and defending actions by or against it...." It further states that "No action or proceeding to which a corporation is a party abates by the dissolution of the corporation or by reason of proceedings for winding up and dissolution thereof."*f ...


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