Choice Foods, Inc. v. Shoreline Foods, Inc. et al.

& Order For the foregoing reasons, Defendants Dignity Health dba St. Mary Medical Center and Carolyn Caldwell's Motion for New Trial is DENIED. Defendants Dignity Health dba St. Mary Medical Center and Carolyn Caldwell's Motion to Vacate Judgment is DENIED. Moving parties are ordered to give notice.

Case Number: 24STCV33191 Hearing Date: August 25, 2026 Dept: 512 HEARING DATE: Tues., August 25, 2026 JUDGE /DEPT: Mkrtchyan/512 CASE NAME: Choice Foods, Inc. v. Shoreline Foods, Inc. et al. COMP. FILED: 12-17-24 CASE NUMBER: 24STCV33191/25STCV24957 FAC FILED: 08-22-25 NOTICE: OK PROCEEDINGS: MOTION TO STRIKE MOVING PARTY: Plaintiff Choice Foods, Inc. RESP. PARTY: Defendants Herbort Hudson, Sam White, and La Breafo, Inc. MOTION TO STRIKE (CCP Sec.Sec. 435; 436) TENTATIVE RULING: Plaintiff Choice Foods, Inc.'s Motion to Strike Defendants/Cross-Complainants Shoreline Foods, Inc., Freeway Foods, Inc., and La Breafo, Inc.'s Answers, Affirmative Defenses, and Cross-Complaint is CONTINUED to October 29, 2026 at 9:00 a.m. in Department 512 of the Stanley Mosk Courthouse.

At least 16 court days prior to the continued hearing date, Plaintiff must file and serve supplemental briefing solely to address the issue of waiver discussed herein. At least 9 court days prior to the continued hearing date, any Opposition must be filed and served. At least 5 court days prior to the continued hearing date, any Reply must be filed and served. Also at least 9 court days prior to the next scheduled hearing, Shoreline Foods, Freeway Foods, and La Breafo must file and serve status updates as to revival/reinstatement. Order to Show Cause re: Status of Defendant Freeway Food, Inc.'s and Shoreline Food, Inc.'s is CONTINUED to October 29, 2026 at 9:00 a.m. in Department of the Stanley Mosk Courthouse. Moving party is ordered to give notice.

SERVICE: [X] Proof of Service Timely Filed (CRC, rule 3.1300) OK [X] Correct Address (CCP Sec.Sec. 1013, 1013a) OK [X] 16/21 Court Days Lapsed (CCP Sec.Sec. 12c, 1005(b)) OK OPPOSITION: Filed on July 13 & August 12, 2026 [] Late [] None REPLY: Filed on August 18, 2026 [] Late [] None ANALYSIS: I.

Background

On August 22, 2025, Plaintiff Choice Foods, Inc. filed a First Amended Complaint ("FAC") against Defendants Shoreline Foods Inc., Amusement Foods Inc., Freeway Foods, Inc., Duquesne Properties, LLC, 730 Broadway, Inc., Waffle Plaza Properties, Inc., Diego Plate Properties, LLC, Gower Properties, LLC, La Breafo, Inc., La Brea Food, Inc., Roscoe's Cool, Inc., Heirbel Management, Inc., Heirbella Drink Co, LLC, Roscoe's Intellectual Property, LLC, Herbert Hudson, and Sam White ("Defendants") and Does 1-30, alleging Breach of Contract, Open Book Account, Account Stated, Intentional Misrepresentation, Negligent Misrepresentation, Promissory Estoppel, Quantum Meruit, and Unjust Enrichment causes of action.

On September 22, 2025, Shoreline Foods, Amusement Foods, Freeway Foods, LA Breafo, Duquesne Properties, Waffle Plaza Properties, Diego Plate Properties, LA Brea Foods, Heirbel Management, Heirbella Drink, and Roscoe's Intellectual Properties LLC filed an Answer to the FAC. Also, Shoreline Foods, Amusement Foods, Freeway Foods, and La Breafo Foods previously filed a Cross-Complaint on February 5, 2025.

On July 1, 2026, Plaintiff filed the instant Motion to Strike Defendants/Cross-Complainants Shoreline Foods, Inc., Freeway Foods, Inc., and La Breafo, Inc.'s Answers, Affirmative Defenses, and Cross-Complaint (the "Motion") and request for judicial notice. On July 7, 2026, the Court granted Plaintiff's Ex Parte Application to advance the hearing on the Motion from September 11, 2026, to July 24, 2026. (7/7/26 Order.) That same day, Plaintiff filed and served Notice of Ruling.

On July 13, 2026, Hudson and White filed an Opposition to the Motion. On July 14, 2026, the Court, in pertinent part, continued the hearing on the Motion pursuant to the parties' stipulation. (See 7/14/26 Order, p. 15.)

On August 12, 2026, La Breafo filed an Opposition to the Motion. On August 18, 2026, Plaintiff filed a Reply. II. Request for Judicial Notice In conjunction with the Motion, Plaintiff requests the Court take judicial notice of screenshots from the California Secretary of State's "Bizfile Online portal as of June 27, 2026, reflecting the suspended status of" Shoreline Foods, Freeway Foods, and La Breafo. (RJN, pp. 2-3, Exhs. 1-3.) III.

Legal Standard

California law authorizes a party's motion to strike matter from an opposing party's pleading if it is irrelevant, false, or improper. (Code Civ. Proc. Sec.Sec. 435, 436.) Motions may also target pleadings or parts of pleadings that are not filed or drawn in conformity with applicable laws, rules, or orders. (Code Civ. Proc. Sec. 436, subd. (b).) The Code of Civil Procedure also authorizes the Court to act on its own initiative to strike matters, empowering the Court to enter orders striking matter "at any time in its discretion, and upon terms it deems proper." (Code Civ. Proc. Sec. 436.)

Finally, Code of Civil Procedure section 435.5 requires that "[b]efore filing a motion to strike pursuant to this chapter, the moving party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to the motion to strike for the purpose of determining whether an agreement can be reached that resolves the objections to be raised in the motion to strike." (Code Civ. Proc. Sec. 435.5, subd. (a), emphasis added.) IV.

Discussion

A. Meet and Confer In conjunction with the Motion, Plaintiff filed a meet and confer declaration, stating that Plaintiff's counsel met and conferred on the telephone with defense counsel regarding the suspended status of Shoreline, Freeway, and La Breafo. (Motion, Eubanks Decl., P. 16.) During that conversation, Hudson's and White's counsel "represented that they were negotiating a compromise with the FTB concerning back taxes owed by the Suspended Entities. Counsel further represented that the Suspended Entities would not pay the amounts necessary to lift their suspensions until a compromise with the FTB was reached. Counsel provided no timeline for that compromise or for any revival, and the Suspended Entities remain suspended as of the date of this declaration." (Motion, Eubanks Decl., P. 16.) The Court finds the meet and confer requirement is satisfied.

B. Motion to Strike

Parties' Arguments Plaintiff moves to strike Shoreline Foods, Freeway Foods, and La Breafo's Answer, Affirmative Defenses, and Cross-Complaint on the grounds that the entities are "suspended by the Franchise Tax Board and thus lack the capacity and right to defend and prosecute claims in this litigation. (Motion, pp. 2, 6-7.)

In Opposition, La Breafo concedes it is suspended; however, La Breafo represents that it is close to revival and requests the Court either deny the Motion without prejudice or continue the Motion "to give La Breafo time to complete its negotiations with the state taxing authorities and obtain its 'revivor.' " (La Breafo Opp., p. 3.) The Opposition filed by Hudson and White, who are not named in the instant Motion, make the same request as La Breafo and assert that Shoreline Foods, Freeway Foods, and La Breafo are actively pursuing revivor. (Hudson White Opp., pp. 2-3, 5, 7.)

In Reply, Plaintiff highlights that there has been no response from Shoreline Foods or Freeway Foods to the Motion. (Reply, p. 1.) Further, Hudson and White lack standing and their prejudice theory is moot given that the Court previously continued the trial. (Reply, p. 2.) Also, Plaintiff states that revivor of the subject entities has not occurred and an anticipated revivor is not a substitute for capacity. (Reply, pp. 4-5.) Additionally, Plaintiff states La Breafo's discovery compliance does not create capacity. (Reply, pp. 5-6.)

To the extent pleadings sought to be stricken are brought by parties who are not suspended, Plaintiff clarifies it "seeks an order striking the Answer, Affirmative Defenses and Cross-Complaint as to Shoreline, Freeway, and La Breafo only, leaving Amusement as the sole remaining cross-complainant to prosecute whatever claims it can prove on its own behalf. Amusement's presence is not a basis to permit three disqualified entities to continue prosecuting a multimillion-dollar cross-complaint." (Reply, p. 6.)

Finally, Plaintiff requests that should the Court grant a continuance, the continuance: "(1) be to a date certain no more than thirty days out; (2) place on the Suspended Defendants the burden of filing a certificate of revivor from the FTB before that date; (3) provide that the motion is granted if no certificate of revivor is filed; and (4) bar the Suspended Defendants from serving discovery, filing motions, or otherwise participating in the litigation unless and until revivor is documented." (Reply, p. 6.)

Legal Standard

A suspended corporation may not "prosecute or defend an action, seek a writ of mandate, appeal from an adverse judgment, or renew a judgment obtained before suspension." (Center for Self-Improvement & Community Development v. Lennar Corp. (2009) 173 Cal.App.4th 1543, 1552.) "A plea that a corporation lacks capacity to maintain an action because its corporate powers have been suspended for nonpayment of taxes ' "is a plea in abatement which is not favored in law, is to be strictly construed and must be supported by facts warranting the abatement" at the time of the plea. [Citations.]' [Citation.] Pleas in abatement do not challenge the justness or merits of a plaintiff's claim, but rather object to the place, mode, or time of asserting a claim." (Ibid.)

"Corporate incapacity is nothing more than a legal disability, depriving the party of the right to come into court and represent its own interests. As such, lack of capacity is not a jurisdictional defect and is waived if not properly raised. [Citation.] Not surprisingly, unless mandated by governing statute, the capacity of the plaintiff to sue is not an element of a cause of action and the plaintiff corporation need not allege it is qualified to do business in this state or that it has paid all state taxes." (Id., at pp. 1552-1553.) "Thus, the suspended status of corporate powers at the time of filing suit does not impede the trial court's jurisdiction to proceed, nor does a suspension after suit commences but before rendition of judgment deprive the court of jurisdiction or render the judgment void." (Id., at p. 1553.)

"A suspended corporation can regain its corporate powers by filing all required tax returns, paying the necessary taxes, penalties or fees due, and applying to the Franchise Tax Board for a certificate of revivor. (Rev. & Tax. Code, Sec. 23305.) This reinstatement or revivor generally is 'without prejudice to any action, defense or right which has accrued by reason of the original suspension or forfeiture ... .' (Id., Sec. 23305a.) Our Supreme Court has held that the revival of corporate powers during the course of litigation validates earlier acts occurring prior to judgment, as well as matters occurring postjudgment." (Ibid.)

"In sum, the revival of corporate powers enables the previously suspended party to proceed with the prosecution or defense of the action and validates a judgment obtained during suspension.... plaintiff may not take the defendant's default by virtue of the defendant's inability to defend due to suspension of corporate powers, where the defendant consummated revival proceedings upon the grant of a continuance." (Ibid.)

Analysis

Here, the Court finds Plaintiff has failed to provide any argument or legal authority demonstrating Plaintiff has not waived its challenge to Shoreline Foods, Freeway Foods, and La Breafo's lack of legal capacity. (See Motion; Lennar Corp., supra, 173 Cal.App.4th at pp. 1552-1553.) Further, while the Oppositions do not deny Shoreline Foods, Freeway Foods, and La Breafo are suspended, the Oppositions state that Shoreline Foods, Freeway Foods, and La Breafo are close to reinstatement or revival. (See Opps.; Mertens Decl.; Lennar Corp., supra, 173 Cal.App.4th at p. 1553.)

Based on the foregoing, the Court CONTINUES the Motion to allow the parties to file supplemental papers addressing the issues noted herein. V. Conclusion & Order Based on the foregoing, Plaintiff Choice Foods, Inc.'s Motion to Strike Defendants/Cross-Complainants Shoreline Foods, Inc., Freeway Foods, Inc., and La Breafo, Inc.'s Answers, Affirmative Defenses, and Cross-Complaint is CONTINUED to October 29, 2026 at 9:00 a.m. in Department 512 of the Stanley Mosk Courthouse.

At least 16 court days prior to the continued hearing date, Plaintiff must file and serve supplemental briefing solely to address the issue of waiver discussed herein. At least 9 court days prior to the continued hearing date, any Opposition must be filed and served. At least 5 court days prior to the continued hearing date, any Reply must be filed and served. Also at least 9 court days prior to the next scheduled hearing, Shoreline Foods, Freeway Foods, and La Breafo must file and serve status updates as to revival/reinstatement. Order to Show Cause re: Status of Defendant Freeway Food, Inc.'s and Shoreline Food, Inc.'s is CONTINUED to October 29, 2026 at 9:00 a.m. in Department of the Stanley Mosk Courthouse. Moving party is ordered to give notice.

Case Number: 25STCV10080 Hearing Date: August 25, 2026 Dept: 512 HEARING DATE: Tues., August 25, 2026 JUDGE /DEPT: Mkrtchyan/512 CASE NAME: SMS Generators, LLC v. Perry, et al. COMP. FILED: 04-03-25 CASE NUMBER: 25STCV10080 NOTICE: OK PROCEEDINGS: MOTION TO BE RELIEVED AS COUNSEL MOVING PARTY: Counsel Brian D. Seibel of Seibel & Finta, representing Defendants Nickolas Perry and Founderz, LLC RESP. PARTY: None MOTION TO BE RELIEVED AS COUNSEL (CCP Sec. 284, CRC, rule 3.162) TENTATIVE RULING: Counsel Brian D. Seibel of Seibel & Finta's unopposed Motion to be Relieved as Counsel for Defendants Nickolas Perry and Founderz, LLC is GRANTED.

However, the corrected MC-053 form entitled "Order Granting Attorney's Motion to Be Relieved as Counsel-Civil" must be resubmitted with the Court within the next 5 days of this ruling providing all the accurate dates and future dates. The Court's Ruling and Attorney's relief as Counsel of record for client is not effective until Proof of Service of the Order signed by the Court upon the client is served and filed in this action. Until then, counsel continues to be counsel of record. (Cal. Rules of Court 3.1362(e).) Defense