Filed 9/21/15 Eng v. B.L.E. Fish CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115. 

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

FRANKLIN ENG,

Plaintiff and Appellant,

v.

B.L.E. FISH, INC.,

Defendant and Respondent.

 D066054

 (Super. Ct. No.

 37-2011-00102213-CU-MC-CTL)

APPEAL from an order of the Superior Court of San Diego County, Katherine A. 

Bacal, Judge. Dismissed.

Fischbach & Fischbach and Zachariah E. Moura for Plaintiff and Appellant.

Blanchard, Krasner & French and Thomas L. Gotfredson for Defendant and 

Respondent.

Plaintiff Franklin Eng appeals an order granting his motion to strike the amended 

answer filed, purportedly by special appearance, by B.L.E. Fish, Inc. (Fish Corp.) in his 

action arising out of alleged misappropriation of funds and other wrongful conduct by the 

managers of the Tin Fish restaurant in San Diego. On appeal, Eng contends the trial 
2

court, in granting his motion, erred by also dismissing Fish Corp. with prejudice from the 

action. However, because we conclude the court's order did not take that purported 

action and its order granting the motion to strike is not an appealable order, we dismiss 

the appeal.

FACTUAL AND PROCEDURAL BACKGROUND

In 2011, Eng filed a complaint against Michael Patrick Brown, Jerry Levy, Fish 

Corp. (doing business as the Tin Fish Gas Lamp), and unnamed Doe defendants. The 

complaint alleged that in 2006 Eng, Brown, and Levy entered into an oral joint venture 

agreement to acquire and operate a restaurant and bar in San Diego known as the Tin Fish 

Gas Lamp. They allegedly agreed that Brown and Levy would be the day-to-day 

operators and managers of the restaurant and receive a management fee of three percent 

of gross sales. Brown would receive a 57 percent interest in the joint venture, Levy a 33 

percent interest, and Eng a 10 percent interest. They allegedly agreed the joint venture 

would own a corporation that would own the restaurant to limit their liability. They 

allegedly agreed not to receive salaries, but instead would take distributions on a 

quarterly basis, depending on cash flow. The complaint alleged that since late 2010 the 

defendants had refused to distribute any monies to Eng despite the restaurant's success. 

The first cause of action against all defendants sought the dissolution of the partnership, 

an accounting, and the appointment of a receiver. The second cause of action against all 

defendants sought damages for constructive fraud and/or breach of fiduciary duties. The 

third cause of action against all defendants sought damages for conversion.
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In 2012, Eng filed a first amended complaint against Brown, Levy, Fish Corp., and 

unnamed Doe defendants, alleging the original three causes of action described above 

and two additional causes of action. Its fourth cause of action alternatively sought the 

involuntary dissolution and liquidation of Fish Corp. if it was found the joint venture or 

partnership did not exist. Its fifth cause of action was an alternative shareholder 

derivative action for breach of fiduciary duty if it was found Fish Corp., and not the joint 

venture, had the right of action against Brown and Levy for their wrongful conduct.

After the filing of the first amended complaint, the trial court apparently sustained 

a demurrer to the third cause of action and Eng voluntarily dismissed his fourth cause of 

action.1 In April 2013, Eng filed a notice of errata purporting to remove Fish Corp. as a 

named defendant in the caption of the first amended complaint. In July 2013, Eng filed a 

request for dismissal, dismissing with prejudice Fish Corp., "as a DEFENDANT, only, in 

the caption of the First Amended Complaint." On July 18, the court clerk signed and 

entered that dismissal.

On August 23, the trial court (San Diego County Superior Court Judge William S. 

Dato) heard Eng's demurrers to cross-complaints filed by Brown, Levy, and Fish Corp.,

and his motion to disqualify counsel for Fish Corp. The court sustained the demurrers 

and denied the motion to disqualify counsel. In its minute order, the court stated:

 

1 Although the parties do not cite to documents in the record on appeal showing 

those actions, they represent to this court those actions were, in fact, taken. Accordingly, 

for purposes of this appeal, we presume those actions were taken.
4

"In light of the corrections to [Eng's] first amended complaint 

dismissing the corporation [i.e., Fish Corp.] as anything other than a 

nominal defendant, Fish Corp. is granted ten days leave to file an 

amended answer." (Italics added.)

Regarding the motion to disqualify Fish Corp.'s counsel, the court stated:

"[Eng] seeks to disqualify . . . counsel for Fish [Corp.] on grounds 

that by filing a demurrer, answer, and cross-complaint, [it] has 

improperly taken sides in the derivative action against the interests 

of the corporation, which is the real party plaintiff on whose behalf 

the derivative claim is brought. As the court explained in Patrick v. 

Alacer Corp. (2008) 167 Cal.App.4th 995, 'a nominal defendant 

corporation generally may not defend a derivative action filed on its 

behalf.' [Citation.] The question in this case is whether it has 

improperly done so.

"The fundamental problem with [Eng's] argument is [he was the] 

plaintiff [who] created the perceived necessity for Fish Corp. to 

respond to the FAC. While a nominal corporate defendant may not 

generally defend against the merits of a derivative claim filed on its 

behalf, the FAC in this case did much more than name Fish Corp. as 

a nominal defendant. In addition to a somewhat confused derivative 

claim pled in the alternative, the FAC alleges four other causes of 

action against 'all defendants' including Fish Corp. [Fish Corp.'s 

counsel] on behalf of the corporation was required to respond to 

these claims and did so appropriately.

"Even the fifth (derivative) cause of action is inexplicably against 'all 

defendants' and incorporates by reference many prior allegations 

from the first three causes of action, making [Eng's] intent far from 

crystal clear. [Citation.] Since the filing of these motions, [Eng] has 

attempted to correct some of the confusion by submitting a Notice of 

Errata Re Plaintiff's First Amended Complaint and a request to 

dismiss Fish Corp. as a defendant. But this correction and 

dismissal, which the Court hereby approves and orders, does not 

retroactively invalidate [Fish Corp.'s counsel's] prior actions on 

behalf of Fish Corp. that were, at the time, reasonable and 

appropriate. To the extent [Fish Corp.'s counsel] should have 

clarified that Fish Corp.'s demurrer and answer were not intended to 

substantively challenge the derivative claim, any deficiency in the 

pleadings is technical and not a sufficient basis to warrant 

disqualification. In light of the corrections and resulting 
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clarification, Fish Corp. may file an amended answer." (Italics 

added.)

On September 3, 2013, Fish Corp. filed, purportedly by special appearance, an 

amended answer to the first amended complaint. Fish Corp. later filed an objection to the 

proposed order submitted by Eng's counsel following the August 23 hearing. Eng then 

filed his instant motion to strike Fish Corp.'s amended answer filed purportedly by 

special appearance.

On November 1, 2013, the trial court issued a minute order to clarify its order 

issued following the August 23 hearing, stating:

"The Court has reviewed [Fish Corp.'s] objection to the proposed 

order regarding the 8/23/13 ruling on the demurrers to Michael 

Brown, Jerry Levy, and [Fish Corp.'s] cross-complaint. The order 

submitted by [Eng's] counsel and signed by the Court on 9/3 is 

proper. The Court's 8/23 minute order notes that [Fish Corp.] is 

only a nominal defendant in the First Amended Complaint. That 

finding remains in effect even though it is not included in the 

subsequent order submitted by counsel. Nor is it appropriate to 

state that [Fish Corp.] is dismissed from the action with prejudice. 

[Eng's] request for dismissal requested [Fish Corp.] be dismissed as 

a defendant in the caption of the FAC. Consequently, as noted in the 

8/23 minute order, [Fish Corp.] is only a nominal defendant." 

(Italics added.)

On April 18, 2014, the trial court (San Diego County Superior Court Judge 

Katherine Bacal) heard Eng's motion to strike Fish Corp.'s amended answer. At that 

hearing, the court noted it had reviewed Judge Dato's previous order that found Fish 

Corp. had been dismissed with prejudice, except to the extent it is a nominal defendant. 

The court stated it did not believe it was necessary for Fish Corp. to file an answer. The 

court stated: "I do have the prior rulings of Judge Dato indicating that [Fish Corp.] is at 
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best a nominal defendant. I would leave it at that." The court's minute order stated it 

granted Eng's motion to strike Fish Corp.'s amended answer. It explained: "Given [Eng's] 

dismissal of the corporate defendant, the Court finds the filing of an answer by [Fish 

Corp.] to be irrelevant and mere surplusage." After quoting an excerpt from Judge Dato's 

August 23, 2013, ruling, the court stated: "Thus, even though [Fish Corp.] was dismissed 

as a named defendant, it was expressly permitted leave to file an Amended Answer to the 

extent it may remain involved as a 'nominal defendant.' " Regarding Eng's instant motion 

to strike Fish Corp.'s amended answer, the court stated: "Given [Eng's] motion to strike 

this Answer and [Fish Corp.'s] objection to filing an answer, it appears the parties are in 

agreement that [Fish Corp.] is not required to file an answer. The Court agrees with both 

parties." The court granted Eng's motion to strike Fish Corp.'s amended answer.

On April 28, 2014, the trial court issued its written order granting Eng's motion to 

strike Fish Corp.'s amended answer, purportedly filed by special appearance. In addition 

to granting Eng's motion to strike, the court further ordered that Fish Corp., "having been 

dismissed from this action with prejudice, need not file an Answer to [Eng's] First 

Amended Complaint nor take part in any further proceedings in this matter." Eng timely 

filed a notice of appeal challenging the court's April 28, 2014, order.

DISCUSSION

I

April 28, 2014, Order

Eng's appeal apparently challenges only language in the trial court's April 28, 

2014, order that purportedly dismissed Fish Corp. with prejudice from the action. He 
7

argues the court should have retained Fish Corp.'s involvement in the action as a nominal 

defendant to his derivative cause of action. However, as we discuss below, Eng 

misinterprets the language of the April 28, 2014, order, and his argument is based on a 

faulty premise.

A

In April 2013, Eng filed a notice of errata removing Fish Corp. as a named 

defendant in the caption of the first amended complaint. In July 2013, he filed a request 

for dismissal, dismissing with prejudice Fish Corp., "as a DEFENDANT, only, in the 

caption of the First Amended Complaint." In his August 28, 2013, minute order, Judge 

Dato recognized that those actions by Eng had the effect of removing Fish Corp. from the 

action "as anything other than a nominal defendant." (Italics added.) He then approved 

Eng's actions and ordered Fish Corp. be dismissed from the action, except to the extent it 

is a nominal defendant in his derivative cause of action. On November 1, Judge Dato 

issued a minute order clarifying his August 23 minute order, stating in part:

"The Court's 8/23 minute order notes that [Fish Corp.] is only a 

nominal defendant in the First Amended Complaint. That finding 

remains in effect even though it is not included in the subsequent 

order submitted by counsel. Nor is it appropriate to state that [Fish 

Corp.] is dismissed from the action with prejudice. [Eng's] request 

for dismissal requested [Fish Corp.] be dismissed as a defendant in 

the caption of the FAC. Consequently, as noted in the 8/23 minute 

order, [Fish Corp.] is only a nominal defendant." (Italics added.)

B

To the extent the parties to this appeal are confused regarding Fish Corp.'s status 

in this action as a nominal defendant to Eng's derivative cause of action, we briefly 
8

discuss shareholder derivative actions and a corporation's relationship to that action. 

When management of a corporation fails to properly enforce all claims a corporation may 

have, the corporation's shareholders have the right to enforce those claims on its behalf. 

(Jones v. H.F. Ahmanson & Co. (1969) 1 Cal.3d 93, 107.) "The shareholders may . . .

bring a derivative suit to enforce the corporation's rights and redress its injuries when the 

board of directors fails or refuses to do so." (Grosset v. Wenaas (2008) 42 Cal.4th 1100, 

1108 (Grosset).) A shareholder who files a derivative action on behalf of a corporation is 

merely a nominal party plaintiff because the corporation is the ultimate beneficiary of 

that action. (Klopstock v. Superior Court (1941) 17 Cal.2d 13, 21.) "The corporation . . .

[is] the real party plaintiff in the action." (Russell v. Weyand (1935) 5 Cal.App.2d 259, 

260.)

"Though the corporation is essentially the plaintiff in a derivative action, '[w]hen a 

derivative suit is brought to litigate the rights of the corporation, the corporation . . . must 

be joined as a nominal defendant.' [Citation.] The corporation must be joined because 

'its rights, not those of the nominal plaintiff, are to be litigated . . .' [citation], and to offer 

the real defendants res judicata protection from later suits. [Citation.] Naming the 

corporation a defendant, not a plaintiff, follows from the joinder rules: 'If the consent of 

any one who should have been joined as plaintiff cannot be obtained, he may be made a 

defendant . . . .' (Code Civ. Proc., § 382.) So 'although the corporation is made a 

defendant in a derivative suit, the corporation nevertheless is the real plaintiff . . . .' " 

(Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1004, fn. omitted (Patrick).)
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Because a derivative action is filed on behalf of a corporation and not against it, 

the corporation is only a "nominal defendant." (Patrick, supra, 167 Cal.App.4th at 

p. 1004; Grosset, supra, 42 Cal.4th at p. 1108.) "The only reason the corporation is 

named a nominal defendant is its refusal to join the action as a plaintiff." (Patrick, at 

p. 1004.) "In a real sense, the only claim a shareholder plaintiff asserts against the 

nominal defendant corporation in a derivative action is the claim the corporation has 

failed to pursue the litigation." (Ibid.) "The conclusion follows that a nominal defendant 

corporation generally may not defend a derivative action filed on its behalf. The 

corporation may assert defenses contesting the plaintiff's right or decision to bring suit, 

such as asserting the shareholder plaintiff's lack of standing or the SLC [special litigation 

committee] defense. [Citations.] . . . [T]he corporation has no ground to challenge the 

merits of a derivative claim filed on its behalf and from which it stands to benefit." (Id.

at p. 1005.)

C

In its April 28, 2014, order, the trial court granted Eng's motion to strike Fish 

Corp.'s amended answer. It also ordered that Fish Corp., "having been dismissed from 

this action with prejudice, need not file an Answer to [Eng's] First Amended Complaint 

nor take part in any further proceedings in this matter." In challenging that order, Eng 

misinterprets the meaning of the phrase italicized above. That phrase merely reflects the 

court's recognition of past actions in the lawsuit. The court was presumably referring to 

Eng's correction of his complaint and dismissal of Fish Corp. as a named defendant in the 

caption of his complaint, which actions were later approved and ordered by Judge Dato 
10

on August 23, 2013. Although the court's April 28, 2014, order did not fully and 

accurately describe the entirety of Judge Dato's prior ruling by omitting language 

referring to his finding that Fish Corp. remained a nominal defendant in Eng's derivative 

cause of action, that omission in the April 28, 2014, order did not, contrary to Eng's 

assertion, have the effect of dismissing with prejudice Fish Corp. from the action. 

Rather, consistent with Judge Dato's previous ruling, Fish Corp. remained a nominal 

defendant in Eng's derivative cause of action. Alternatively stated, Fish Corp. is 

necessarily a nominal defendant as long as Eng alleges a shareholder derivative cause of 

action. (Patrick, supra, 167 Cal.App.4th at p. 1004; Grosset, supra, 42 Cal.4th at 

p. 1108.) Furthermore, contrary to Eng's assertion, the April 28, 2014, order did not 

implicitly overrule Judge Dato's prior ruling. The April 28, 2014, order did not have the 

effect of dismissing Fish Corp. as a nominal defendant. Rather, it merely granted Eng's 

motion to strike Fish Corp.'s amended answer. At oral argument, Fish Corp. conceded it 

remains a nominal defendant in this action for purposes of the derivative cause of action.

II

April 28, 2014, Order Is Not Appealable

Eng asserts the April 28, 2014, order is appealable because it dismissed Fish Corp. 

as a defendant with prejudice even to the extent it is a nominal defendant to his 

shareholder derivative cause of action. However, as we concluded above, that order did 
11

not dismiss Fish Corp. as a nominal defendant to his derivative cause of action.2 Rather, 

it merely granted Eng's motion to strike Fish Corp.'s amended answer.

"A reviewing court has jurisdiction over a direct appeal only when there is (1) an 

appealable order or (2) an appealable judgment." (Griset v. Fair Political Practices Com.

(2001) 25 Cal.4th 688, 696.) An appeal may be taken from a final judgment or an interim 

order expressly designated appealable by statute. (Code Civ. Proc., § 904.1, subd. (a)(1)-

(13); In re Daniel K. (1998) 61 Cal.App.4th 661, 671 [final judgments]; In re Mario C.

(2004) 124 Cal.App.4th 1303, 1307 [appealable orders].) Code of Civil Procedure 

section 904.1, subdivision (a)(2) through (13), sets forth those orders that are appealable 

(e.g., postjudgment orders). However, that statute does not list an order granting a 

motion to strike an answer. (Code Civ. Proc., § 904.1, subd. (a)(2)-(13).) "Ordinarily an 

order striking an answer is not appealable, since appeal lies from the subsequent 

judgment against the party whose answer was stricken." (Administrative Management 

Services, Inc. v. Fidelity & Deposit Co. (1982) 129 Cal.App.3d 484, 489; see also Reese 

v. Administrative Committee (1963) 218 Cal.App.2d 646, 649 [no appeal lies from order 

granting motion to strike portions of defendant's answer]; cf. W.A. Rose Co. v. Municipal 

Court (1959) 176 Cal.App.2d 67, 74 ["An order granting or denying a motion to strike a 

pleading is not appealable."].)

 

2 Also, to the extent the order referred to past actions in the lawsuit that purportedly 

"dismissed with prejudice" Fish Corp. from the action, the order itself did not take any 

action dismissing Fish Corp. Rather, as discussed above, it incompletely and 

inaccurately described past actions in the lawsuit.
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Because the April 28, 2014, order granting Eng's motion to strike Fish Corp.'s 

amended answer is not a final judgment and is not an appealable order, we dismiss the 

appeal.

DISPOSITION

The appeal is dismissed. The parties shall bear their own costs on appeal.

McDONALD, J.

WE CONCUR:

McCONNELL, P. J.

AARON, J.