In so holding, the California Supreme Court affirmed the California Court of Appeal for the First District’s dismissal of a personal injury claim against a dissolved Delaware corporation, holding that the claim was filed more than three years after dissolution of the corporation in violation of Delaware General Corporation Law Section 278 [blog article here]. In deciding that the California survival statute did not apply to foreign corporations, the Supreme Court resolved a split among California appellate courts on the interpretation of California Corporations Code Section 2010 (“Section 2010”), which governs the winding-up and survival of dissolved corporations. In December 2008, plaintiffs Walter Greb (now deceased) and his wife Karen Greb filed a complaint for personal injuries and loss of consortium against defendant Diamond International Corporation (“Diamond”) and several other entities.

The California Supreme Court recently resolved conflicting opinions from state appellate intermediary courts on the subject of whether, or under what circumstances, a plaintiff may sue a dissolved out of State corporation in California. In Greb v. Diamond International Company, 56 Cal. 4th 243 (2013) the Court held that dissolved foreign corporations are not subject to suit in California where a direct conflict exists between California Corporations Code Section 2010 (which permits Plaintiffs to sue dissolved corporations for an indefinite period of time), and the corporate survival laws of the dissolved company’s state of incorporation. See, Greb v. Diamond International Company, 56 Cal. 4th 243 (2013).

The California General Corporation Law provides that a California corporation that is dissolved continues to exist for the purpose of, among other things, defending actions against it. Cal. Corp. Code § 2010(a). This, of course, begs the question of how a plaintiff might serve process against a dissolved corporation. Fortunately, the GCL provides an answer.As an initial matter, summons or other process may be served by delivering a copy to an officer, director, or person who has charge of the corporation's assets. Cal. Corp. Code § 2011(b). What if that person cannot be found? In that case, service may be effected by delivery to "any agent upon who process might be served at the time of dissolution. Id.What if the corporate agent is no longer serving as such at the time of service? InHernandez v. Specialized Loan Servicing, LLC, 2023 WL 8461172 (N.D. Cal. Dec. 6, 2023), the defendants argued that service was not properly effected because the agent was not the corporation's agent at the time of service. Judge William H. Orrick, however, ruled that all that was required for proper service was that the person served was the corporation's agent at the time of dissolution.What if the registered a

Further, no action to which a dissolved corporation is a party abates by reason of the corporation's dissolution. Cal. Corp. Code § 2010(b). Matters are quite different when a corporation is suspended rather than dissolved.

Indeed, under the statutory scheme that replaced the common law rule in California, “a corporation’s dissolution is best understood not as its death, but merely as its retirement from active business.” Id. at 160; see also Cal. Corp. Code § 2010 (“A corporation which is dissolved nevertheless continues to exist for the purpose of winding up its affairs, prosecuting and defending actions by or against it and enabling it to collect and discharge obligations, dispose of and convey its property and collect and divide its assets, but not for the purpose of continuing business except so far as necessary for the winding up thereof.”). Thus, because dissolved California corporations continue to exist as legal entities, Xtreme’s argument is without merit.“Just when I thought I was out… they pull me back in“But how does one know who are the directors and officers of a dissolved corporation?

In contrast with other states, California’s survival statute allows a dissolved corporation to be sued indefinitely. Cal. Corp. Code §2010, subd. (a) (“A corporation which is dissolved nevertheless continues to exist for the purpose of . . . defending actions by or against it and enabling it to. . . discharge obligations ...”) Earlier California decisions had held that foreign corporations, which once transacted business in California, are subject to California’s survival statute to the same extent as domestic corporations. North American Asbestos Corp. v. Superior Court, 180 Cal. App. 3d 902 (1986); see also Penasquitos, Inc. v. Superior Court, 53 Cal. 3d 1180, 1188 (1991).

Because plaintiffs’ complaint was filed more than three years after the dissolution, defendant claimed the lawsuit was barred. Plaintiff argued the lawsuit was permitted under California Corporations Code § 2010, which they asserted took precedence over Delaware law. The trial court sustained the defendant’s demurrer, without leave to amend, and dismissed the suit.

The Supreme Court will also contribute to the body of choice of law opinions in Greb v. Diamond International (S183365) in the context of whether a California plaintiff alleging personal injuries from asbestos can pursue a claim against a dissolved Delaware corporation when the complaint was filed more than three years after the dissolution of the corporation. Does California Corporations Code § 2010 or Delaware General Corporation Law § 278 control? For more details, see the Civil Procedure/Evidence/Discovery update page.Is an Employer Entitled to a Jury Instruction on Mixed Motives for Firing an At-Will Employee?

In Nebraska, the corporate survival statute of limitations is five years. However, corporations organized under California law do not enjoy the advantage of a corporate survival statute of limitations – in fact, California law includes a statute to the opposite effect: California Corporations Code section 2010(a) states, “[a] corporation which is dissolved nevertheless continues to exist for the purpose of winding up its affairs, prosecuting and defending actions by or against it …,” and section 2010(b) states even more directly, “No action or proceeding to which a corporation is a party abates by the dissolution of the corporation or by reason of proceedings for winding up and dissolution thereof.” Thus, a California corporation can be sued any number of years after it has dissolved, and if it has insurance applicable to the claimed loss, the insurer will probably have to defend the company and pay any loss covered by the policy.

53 Cal. 3d 1180, 1183 (1991). The Penasquitos court allowed the action to move forward, concluding that California Corporations Code § 2010 permits parties to sue such dissolved corporations. Id. at 1190.