Two recent appeals were dismissed because the entity defendants were not in good legal standing. One was crosswise with the taxing authorities. Another never formally organized. As a result, both their appeals were dismissed. (But the nonexistent entity gets the judgment against it vacated as part of the dismissal. How's that for failing upward?)
Appellants Not in Good Standing with the Taxing Authorities Will Have Their Appeals Dismissed:
An auto dealer sued to use a large electronic billboard in Long Beach in H.T.L. Properties, LLC v. Speck (D2d2 May 4, 2021) no. B299160 (non-pub.), but the dealer's claims were dismissed on summary judgment. The dealer appealed, but unfortunately for the dealer, it had some unpaid taxes and was not in good standing with the Franchise Tax Board. Appeal dismissed. (Grell v. Laci Le Beau Corp. (1999) 73 Cal.App.4th 1300, 1306.)
Nonexistent Entities Cannot Appeal, But Also Cannot Have Judgments Against Them:
An oil man named Dennis Mitchell opened a bank account under the name Dennis Mitchell Oil, even though no such entity existed. Some time later Dennis Mitchell Oil was sued (for unrelated reasons) and a judgment was entered against the nonexistent entity. The nonexistent entity appealed, and in Dennis Mitchell Oil v. Buehler Family Bakersfield, LLC (D5 Jun. 1, 2021) no. F074897 (non-pub.), the court dismissed the appeal.
"[A] judgment against a non-existent entity is a nullity." (Oliver v. Swiss Club Tell (1963) 222 Cal.App.2d 528, 537–538.) That defect is not subject to waiver because it is jurisdictional. (Id.) So the respondent was correct that the appeal must be dismissed.
But: the upshot is that dismissal here does not merely involve ceasing the appellate proceedings – it requires vacating the underlying trial court judgment for lack of jurisdiction. “ ‘When, as here, there is an appeal from a void judgment, the reviewing court's jurisdiction is limited to reversing the trial court's void acts.’ ” (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 200.)
Held: the nonexistent entity's appeal was dismissed, but the judgment against it was also ordered vacated in the process.
So who is the prevailing party in that appeal, I would like to know? (The opinion is silent on the award of costs.)
Tim Kowal helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes a newsletter of appellate tips for trial attorneys at www.tvalaw.com/articles. His appellate practice covers all of California's appellate districts and throughout the Ninth Circuit, with appellate attorneys in offices in Orange County and Monterey County. Contact Tim at [email protected] or (714) 641-1232.
