Opposite Side Did Not Raise Lack of Capacity by Answer or Demurrer, So No Dice On Sanctions.
In V & P Trading Co., Inc. v. United Charter, LLC, Case No. C070571 (3d Dist. Dec. 19, 2012) (published), the trial court denied a motion to compel by a suspended corporation and awarded monetary sanctions to opponent/its attorneys based on the lack of capacity. Eventually, a summary judgment was granted against suspended corporation on theory that the statute of limitations ran against its claims while the corporation was suspended.
The appellate court reversed the sanctions award.
Although the summary judgment merits ruling was upheld, the sanctions award was overturned because the motion to compel was erroneously granted. After all, lack of capacity for a suspended corporation needs to be raised by answer and demurrer such that it should not have been a basis to deny the motion to compel under the circumstances.