California Supreme And Appellate Court
Case Summaries
Corporation and Enterprise Law
Table of Contents

CORPORATION & ENTERPRISE LAW
Corporation and Enterprise Law Case Summaries

■ Center for Self-Improvement and Cmty. Dev. v. Lennar Corp. , No. A121982

 Appellant, the Center for Self-Improvement and Community Development (Center), sued respondent developers[1] on allegations of generating asbestos dust during their construction activities in the Bayview Hunters Point community.  Although it complied with all the prerequisites for bringing a citizen suit to enforce Proposition 65,[2] at the time of giving the mandatory 60-day notice and thereafter filing its complaint, the Center’s corporate powers had been suspended.  Entering judgment for respondents following the granting of their motion for judgment on the pleadings, the trial court ruled that this suspension of corporate powers at the time of serving notice was a defense that could not be cured by the Center’s subsequent revivor.

            Resolution of this appeal involves the interplay of the 60-day notice statute governing Proposition 65 citizen enforcement, and the corporate suspension and revivor statutes.  We conclude that respondents’ challenge to the complaint did not raise a noncurable affirmative defense.  Rather, invocation of the Center’s lack of capacity was a mere plea in abatement.  Having attained reinstatement prior to judgment, the Center regained its capacity to proceed with prosecution of the pending litigation.  Accordingly, we reverse the judgment.

I.  BACKGROUND

            The Center is a nonprofit organization based in San Francisco.  It operates an education and training center for families and children in the Bayview Hunters Point neighborhood.  The Center is located adjacent to, and downwind of, the Hunters Point Shipyard Parcel “A” Redevelopment Project.  Respondent Lennar-BVHP, LLC is the master developer for this redevelopment project.  Its construction site preparation and development activities have been extensively regulated and monitored by all levels of government—local, state and federal.

            On May 23, 2007, the Center provided respondents with a 60-day notice of its intent to bring a private enforcement action for ongoing violations of Proposition 65.  The Center also sent this letter to all necessary public enforcers.  These public enforcers chose not to commence and prosecute a Proposition 65 action against the alleged violations and the Center went forward as a citizen enforcer, filing the complaint on August 2, 2007.

            The complaint alleged that during respondents’ construction activities on the Hunters Point project, they exposed community members and workers to asbestos without warning of that exposure, in violation of Proposition 65.  The Center prayed for (1) an injunction to prevent respondents from further engaging in construction activities that generate asbestos dust and expose community members and workers to the toxin, without providing Proposition 65 warnings; (2) an assessment of penalties in the amount of $2,500 per day for each violation; and (3) its attorney fees and costs.

            Respondents answered the complaint, and nearly two months later moved for judgment on the pleadings.  The motion asserted that the Center was a suspended corporation at the time it served the 60-day notice, the 60-day notice was thus “defective as a matter of law,” and therefore the court lacked subject matter jurisdiction.

            The Franchise Tax Board suspended the Center’s corporate status on May 1, 2007, for failure to file its tax returns.  Acting to resolve the issue, the Center regained active corporate status by at least December 21, 2007.

            Ruling for respondents, the trial court reasoned that compliance with the 60-day notice requirement was jurisdictional and strictly construed, and the Center’s suspended corporate status when serving the notice was a defense that could not be obviated by revival of that status.  This appeal, raising purely questions of law which we review de novo, followed.

■ Held:

In an action alleging exposure to asbestos without warning of that exposure in violation of Proposition 65, trial court judgment in favor of defendant is reversed where the invocation of plaintiff's lack of capacity after the suspension of its corporate power was a plea in abatement and not an incurable affirmative defense, and plaintiff cured the defect and regained its capacity to proceed with prosecution of the pending litigation when it attained reinstatement prior to judgment.
Ctr. for Self-Improvement, etc. v. Lennar Corp. -A121982-5/20/09 CA1/4
Ctr. for Self-Improvement, etc. v. Lennar Corp. -A121982-5/20/09 CA1/4-PDF

California Supreme And Appellate Court Opinions Directory       
Case Summaries Directory
Corporation Law Case Summaries Table of Contents