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Cal-Western Business Services, Inc. v. Corning Capital Group.

California Court of Appeals, Second District, Seventh Division

November 6, 2013

CAL-WESTERN BUSINESS SERVICES, INC., Plaintiff and Appellant,
v.
CORNING CAPITAL GROUP et al., Defendants and Respondents.

APPEAL from a judgment of the Superior Court of Los Angeles County No. BC331294, Rex Heeseman, Judge.

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[Copyrighted Material Omitted]

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COUNSEL

Roger A.S. Manlin for Plaintiff and Appellant.

Law Offices of Robert S. Altagen, Robert S. Altagen, and Jason J. Allison for Defendants and Respondents.

OPINION

ZELON, J.

Appellant Cal-Western Business Services, Inc. appeals from the trial court’s judgment dismissing its action against respondents Corning Capital Group, Kathryn Smitham, Thomas Smitham, and Elaine Smitham.[1] Following the entry of a judgment in its favor in an underlying lawsuit, Part Properties, Inc. assigned its rights and interest in the judgment to Pacific West One Corp. At a time when its corporate powers were suspended for the failure to pay taxes, Pacific West One assigned its rights and interest in the judgment to Cal-Western. Without Pacific West One’s corporate powers ever being revived, Cal-Western filed this action to enforce the judgment against

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Corning Capital. On its own motion, the trial court ordered that Cal-Western’s complaint be stricken and the action be dismissed in its entirety because Cal-Western lacked the capacity to sue to enforce the judgment as the assignee of a suspended corporation. We affirm.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

On January 31, 1995, a judgment in the amount of $317, 882 was entered in favor of Part Properties and against Corning Capital in an action filed in Los Angeles County Superior Court (the “Judgment”). On July 14, 1995, Part Properties assigned all of its rights, title, and interest in the Judgment to Pacific West One. On July 3, 2000, the Franchise Tax Board suspended Pacific West One’s corporate powers, rights, and privileges for the failure to pay taxes pursuant to Revenue and Taxation Code section 23301. On August 25, 2001, while still suspended, Pacific West One assigned all of its rights, title, and interest in the Judgment to Cal-Western.

Four years later, on April 4, 2005, Cal-Western filed the instant action against Corning Capital to enforce the Judgment. As of the date the action was filed, Pacific West One’s corporate status had not been reinstated and its suspension remained in effect. On February 11, 2008, following several rounds of pleadings, Cal-Western filed a fifth amended complaint alleging causes of action for fraud, deceit, fraudulent concealment, fraudulent conveyance, abuse of process, conspiracy, constructive trust, cancellation of instrument, and declaratory relief. The gravamen of Cal-Western’s complaint was that Corning Capital had not paid any portion of the Judgment, but nevertheless had caused to be filed a false and fraudulent full satisfaction of judgment for the purpose of avoiding collection of the Judgment. Cal-Western also alleged that Corning Capital had sought to conceal real property assets that could be used to satisfy the Judgment by engaging in a series of fraudulent conveyances. As the assignee of the Judgment, Cal-Western sought to recover the principal amount of $317, 882 and accrued interest of $327, 857.

In January 2011, the trial court held a bifurcated jury trial on whether any of the Smithams had caused, or was part of a conspiracy to cause, the full satisfaction of judgment to be filed with the court or recorded with the county recorder. The jury returned a special verdict finding that Kathryn Smitham was liable for causing the satisfaction of judgment to be both filed and recorded, but that Thomas and Elaine Smitham were not liable. Following the verdict, the trial court set a status conference and ordered further briefing to determine the ...


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