Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_08-cv-01522/USCOURTS-cand-5_08-cv-01522-0/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 29:201 Denial of Overtime Compensation

---

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

 Leonardo Espinoza and Sergio Roque (“Plaintiffs”) did not file an opposition to this

motion.

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

Leonardo Espinoza, et al.,

Plaintiff,

 v.

C & C Security Patrol, Inc., et al.,

Defendants. /

NO. C 08-01522 JW 

ORDER GRANTING DEFENDANT C&C

SECURITY PATROL, INC.’S MOTION

FOR LEAVE TO FILE ANSWER

Presently before the Court is Defendant C&C Security Patrol, Inc.’s (“C&C”) Motion for

Leave to File Answer. (Docket Item No. 16.) C&C moves for leave to file an Answer after it has

revived its corporate status.1

Under Cal. Rev. & Tax. Code § 23301, 

the corporate powers, rights and privileges of a domestic tax payer, may be

suspended, and the exercise of the corporate powers, rights and privileges of a

foreign taxpayer in this state may be forfeited if any of the following conditions

occur: (a) If any tax, penalty or interest, or any portion thereof, which is due and

payable . . . is not paid . . . or (b) If any tax, penalty or interest, or any portion

thereof, due and payable upon notice and demand from the Franchise Tax Board,

or due and payable under Section 25936 is not paid . . . .

“It is well-settled that a delinquent corporation may not bring suit and may not defend a legal

action.” United States v. 2.61 Acres of Land, 791 F.2d 666, 668 (9th Cir. 1985) (citing Reed v.

Norman, 48 Cal. 2d 338, 343 (1957)). “However, once the corporate powers are reinstated, the

Case 5:08-cv-01522-JW Document 21 Filed 10/02/08 Page 1 of 3
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 2

corporation may defend an action.” Id. (citing Traub Co. v. Coffee Break Service, Inc., 66 Cal. 2d

368, 371 (1967). 

Until a suspended corporation has been revived, it may appear before a court for the limited

purpose of requesting a continuance to enable its revival. Schwartz v. Magyar House, Inc., 168 Cal.

App. 2d 182, 188 (1959). In deciding whether to grant such a continuance a court may consider (1)

the moving party’s diligence; (2) the usefulness of the continuance in allowing the moving party to

revive itself; (3) the inconvenience of a continuance to the court and the parties; and (4) the

prejudice to either party of granting a continuance. See 2.61 Acres, 791 F.2d at 671-72.

C&C’s corporate status was suspended under Cal. Rev. & Tax. Code § 23301 because it

failed to provide a current Statement of Information and has a “tax issue” with California’s

Franchise Tax Board. (Declaration of Frank Russow in Support of Defendant C&C Security Patrol,

Inc’s Motion for Order for Leave to File Answer ¶ 2, Docket Item No. 16-2.) Accordingly, C&C is

unable to file an Answer to Plaintiff’s First Amended Complaint.

The Court finds the potential prejudice to C&C to be the critical factor. If leave for C&C to

file its Answer at a later date is not granted, C&C will be unable to take action to prevent default

proceedings in this matter. In light of the fact that C&C filed its intended Answer with the Court

along with this motion, the Court finds that Plaintiffs will not be substantially prejudiced by further

delay in receiving C&C’s pleading.

Accordingly, the Court GRANTS C&C’s Motion for Leave to File Answer. C&C shall file

its Answer on the earlier of (10) ten days following revival of its corporate status; or (2) November

25, 2008.

Dated: October 2, 2008 

JAMES WARE

United States District Judge

Case 5:08-cv-01522-JW Document 21 Filed 10/02/08 Page 2 of 3
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

THIS IS TO CERTIFY THAT COPIES OF THIS ORDER HAVE BEEN DELIVERED TO:

Adam Wang waqw@sbcglobal.net

Mark A. Hagopian mhagopian@sh-law.net

Sejal Ojha sxo@mmker.com

Dated: October 2, 2008 Richard W. Wieking, Clerk

By: /s/ JW Chambers 

Elizabeth Garcia

Courtroom Deputy

Case 5:08-cv-01522-JW Document 21 Filed 10/02/08 Page 3 of 3