Ressler v. Piontak CA2/8 ( 2022 )

Filed 5/31/22 Ressler v. Piontak CA2/8
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
JAMES RESSLER et al., B312694
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. 21STCV04261)
v.
LENNY PIONTAK et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los
Angeles County, William F. Fahey, Judge. Affirmed.
Benice Law and Jeffrey S. Benice for Plaintiffs and
Appellants.
Buchalter, Robert M. Dato and Russell L. Allyn for
Defendants and Respondents.
_____________________________
This appeal is from the judgment entered after the
sustaining of an unopposed demurrer to the complaint. Plaintiffs
James Ressler and Lauren Karp, and defendant Lenny Piontak
were shareholders of a corporation, Luxe West, Inc. Defendant
Michelle Sivertsen is Mr. Piontak’s daughter and was employed
by the business. Plaintiffs sued defendants, alleging they
plundered business assets and failed to pay taxes. Defendants
demurred, arguing plaintiffs lacked standing to make derivative
claims belonging to the corporation, among other arguments.
Plaintiffs did not oppose the demurrer, but filed a first amended
complaint after the deadline to file their opposition to the
demurrer. The trial court rejected the untimely first amended
complaint for filing and sustained the unopposed demurrer
without leave to amend. We affirm.
FACTS
On June 2, 2020, plaintiffs filed their complaint against
defendants, alleging causes of action for breach of fiduciary duty,
accounting, declaratory relief, and indemnity. Plaintiffs alleged
Mr. Piontak invested in Luxe West, Inc., in exchange for a 33 1/3
percent share of the business. Mr. Piontak hired his daughter,
Ms. Sivertsen, to work as the corporation’s controller and director
of operations. Defendants allegedly plundered the business, sold
all of its inventory, and failed to pay more than $400,000 in
payroll taxes, for which plaintiffs allege they are liable as
shareholders of the business. Plaintiffs did not allege they had
caused the taxes to be paid, or that any enforcement action had
been taken against them.
On March 8, 2021, defendants demurred, arguing plaintiffs
lacked standing to make derivative claims belonging to the
corporation. Defendants also argued plaintiffs were judicially
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estopped from asserting their claims because plaintiffs did not
disclose the claims in their bankruptcy. Defendants further
argued they could not be liable for breach of fiduciary duty
because they were not corporate officers, and any claim regarding
taxes was not ripe, because the taxes had not been paid. The
demurrer was calendared for hearing on April 9, 2021.
Plaintiffs did not oppose the demurrer. Instead, they tried
to file a first amended complaint on March 29, 2021, eight court
days before the hearing on the demurrer. The first amended
complaint included new allegations that Mr. Piontak was an
officer of the corporation, and signed documents as its chief
financial officer.
On March 30, 2021, the trial court entered a minute order
rejecting the first amended complaint for filing, finding it was
untimely. At the hearing on the demurrer, the trial court
sustained the demurrer without leave to amend, finding the
demurrer was “well taken” and “unopposed” and that the court
had rejected the first amended complaint for filing because it was
untimely. The court entered a judgment of dismissal that same
day. Plaintiffs timely appealed.
DISCUSSION
Plaintiffs acknowledge their first amended complaint was
filed late. (Code Civ. Proc., §§ 472 [“A party may amend its
pleading once without leave of the court . . . after a demurrer . . .
is filed but before the demurrer . . . is heard if the amended
pleading is filed and served no later than the date for filing an
opposition to the demurrer . . . ”]; 1005 [motion opposition papers
are due nine court days before the hearing].) However, they argue
the trial court erred when it rejected the first amended complaint
for filing, based on their faulty reasoning that California Rules of
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Court, rule 3.1300, which relates to the filing and service of
motion papers, provides that “[n]o paper may be rejected for filing
on the ground that it was untimely submitted for filing. If the
court, in its discretion, refuses to consider a late filed paper, the
minutes or order must so indicate.” (Rule 3.1300(d).) Plaintiffs
also argue the court prejudicially erred by failing to state in its
minute order that it was exercising its discretion to not consider
the late-filed amended complaint. We are not persuaded.
Rule 3.1300 is in title 3, division 11 of the California Rules
of Court, which relates to law and motion matters in civil
proceedings. This rule clearly does not divest a court of its
inherent authority to reject a late-filed amended pleading. (Loser
v. E. R. Bacon Co. (1962) 201 Cal.App.2d 387, 390 [“[a] court may,
by virtue of its inherent power to prevent abuse of its processes,
strike an amended complaint which is filed in disregard of
established procedural processes”].)
Plaintiffs also argue the court abused its discretion by not
granting leave to amend, claiming the amended pleading
corrected the deficiencies in the original complaint.
“Where the appellant offers no allegations to support the
possibility of amendment and no legal authority showing the
viability of new causes of action, there is no basis for finding the
trial court abused its discretion when it sustained the demurrer
without leave to amend.” (Rakestraw v. California Physicians’
Service (2000) 81 Cal.App.4th 39, 43–44, citations omitted.)
The demurrer correctly asserted plaintiffs’ claims belonged
to the corporation and not to plaintiffs. (Grosset v. Wenaas (2008)
42 Cal.4th 1100, 1108 [“Because a corporation exists as a separate
legal entity, the shareholders have no direct cause of action or
right of recovery against those who have harmed it.”]; Oakland
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Raiders v. National Football League (2005) 131 Cal.App.4th 621,
651 [breach of fiduciary duty claim for corporate mismanagement
and diverting corporate assets was derivative].) Plaintiffs’
appellate brief does not discuss any facts to support the possibility
of amendment or legal theories supporting the viability of new
causes of action.
Defendants point out that, when the court rejected for filing
the first amended complaint, there were still several days before
the hearing on the demurrer during which plaintiffs could have
asked the court for permission to file a late opposition to the
demurrer or an amended complaint, or asked defendants to
stipulate to more time. Having failed to comply with available
procedures, plaintiffs have not demonstrated the court abused its
discretion.
DISPOSITION
The judgment is affirmed. Respondents may recover their
costs on appeal.
GRIMES, J.
WE CONCUR:
STRATTON, P. J.
WILEY, J.
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