City of San Diego v. San Diegans for Open Government (2016) 3 Cal.App.5th 568.
This is a confusing and contradictory opinion. The facts are simple: The City of San Diego wanted to assess a special tax for a stadium, and filed a “validation” action toward this end. There was a bright-line deadline to file an answer to the validation lawsuit. Defendant corporation, represented by a law firm (BLG) filed a timely answer, despite that the corporate officers and BLG knew the corporation had been suspended, and was thus disabled from making or defending any legal proceeding. The corporation was later reinstated during the pendency of the suit.
The case proceeded to a conclusion, the defendants, including the formerly suspended corporation, prevailed, and the corporation asked for attorney fees under the private attorney general doctrine of CCP 1021.5. The City opposed, and moved to strike the corporation’s answer.
The holding is confusing. The court correctly recites that a reinstated corporation can effectively legally ratify procedural actions taken while suspended. The court circumvents this rule by re-characterizing the “deadline” to file an answer to the validation action as a “statute of limitations”, which is a substantive right, not merely procedural. The court goes on to deny attorney fees based on the illegal and unethical conduct of the corporation and its attorney’s in filing the answer when they knew the corporation was suspended, yet the court fails, in a throw-away paragraph at the end, to strike the supposedly illegally-filed answer on the pretext that doing so wouldn’t change the ultimate result.
The Court of Appeal looks like it got this one wrong. But an accused lawyer in State Bar Court rarely wins against a published Court of Appeal opinion, regardless that the lawyer was not a party and despite that the opinion is just plain wrong.