I.J. Weinrot and Son, Inc. v. Jackson

• Decision Date: 19 November 1984
• Citation: 161 Cal.App.3d 1014,208 Cal.Rptr. 79
• Court: California Court of Appeals Court of Appeals
• Parties: I.J. WEINROT AND SON, INC., Plaintiff and Appellant, v. Mart Bailey JACKSON, and Benjamin M. Jackson, Defendants and Respondents. B003069.

Page 79

208 Cal.Rptr. 79

161 Cal.App.3d 1014

I.J. WEINROT AND SON, INC., Plaintiff and Appellant, v. Mart Bailey JACKSON, and Benjamin M. Jackson, Defendants and Respondents.

B003069.

Court of Appeal, Second District, Division 4, California.

Nov. 19, 1984.

Hearing Granted Jan. 17, 1985.

Bernard S. Shapiro, Los Angeles, Joseph W. Fairfield, and Robert A. Fairfield, Beverly Hills, for plaintiff and appellant.

Demler & Armstrong, Long Beach, and James P. Spaltro, San Diego, for defendants and respondents.

ARGUELLES, Associate Justice.

In this appeal we are asked to decide whether California Civil Code section 49, subdivision (c), gives an employer a cause of action for damages resulting from injuries to a key employee caused by a third party's negligence. We hold that it does.

Plaintiff, I.J. Weinrot and Son, Inc., a California corporation, appeals from a judgment entered on July 19, 1983, following an order sustaining without leave to amend a demurrer to a cause of action for damages under Civil Code section 49, subdivision (c). We reverse.

FACTS

On August 18, 1982, I.J. Weinrot and Son, Inc. (plaintiff), was a closely held California corporation with Edwin Weinrot as its president, employee, and majority shareholder. At 11 p.m. that evening, while walking his dog, Edwin Weinrot was struck and severely injured by an automobile driven by Mart Bailey Jackson and owned by Benjamin M. Jackson (defendants).

On December 22, 1982, a complaint for damages was filed on behalf of Edwin Weinrot, his wife Irene Weinrot, and I.J. Weinrot and Son, Inc. In addition to causes of action seeking damages for Mr. Weinrot's personal injuries and Mrs. Weinrot's loss of consortium, the complaint contained a "Fifth Cause of Action," seeking corporate recovery for salary paid to Mr. Weinrot while he was unable to perform his usual duties, lost business profits, and reimbursement for amounts paid for Mr. Weinrot's medical expenses. The relevant portions of the "Fifth Cause of Action" alleged as follows:

"29. That at all times herein mentioned plaintiff I.J. Weinrot & Son, Inc., was and now is a California corporation duly organized and existing by virtue of the laws of said State.

"30. That at all times herein mentioned and specifically on or about August 18, 1982, Edwin Y. Weinrot was the president and an employee of plaintiff corporation.

"31. That at all times herein mentioned there existed a contract of employment between Edwin Y. Weinrot as president of plaintiff corporation pursuant to which plaintiff corporation agreed to pay to Edwin Y. Weinrot a monthly salary. Pursuant to other written agreements between plaintiff corporation and Edwin Y. Weinrot, plaintiff corporation was obligated to continue paying Edwin Y. Weinrot's salary to him whether or not he was able to perform his usual duties on behalf of said corporation. Said corporation did in fact make payments to Edwin Y. Weinrot and will continue to make payments pursuant to said agreements all to its damage in a sum the exact amount of which is unknown at this time but plaintiff will seek to amend this complaint when the exact amount has been ascertained.

"32. As a further direct and proximate result of the negligence, carelessness and recklessness on the part of the defendants, and each of them, and the injuries sustained by Edwin Y. Weinrot, Edwin Y. Weinrot was unable to perform the usual duties and functions as the president of plaintiff corporation. As a direct and proximate result thereof plaintiff corporation lost profits all to its further damage in a sum the exact amount of which is unknown to plaintiff but leave will be sought to amend this complaint when the exact amount has been ascertained.

"33. Prior to August 18, 1982, plaintiff corporation had agreed with Edwin Y. Weinrot to pay certain medical expenses incurred by him. As a direct and proximate result of the negligence, carelessness, and recklessness on the part of the defendants, and each of them, and as set forth in paragraph 7 hereof and the injuries sustained by plaintiff, Edwin Y. Weinrot, plaintiff corporation has been obligated to pay, has paid and will pay certain medical expenses incurred by plaintiff, Edwin Y. Weinrot, all to this plaintiff's damage in a sum the exact amount of which is unknown but the plaintiff will seek leave of court to amend this complaint when the exact amount thereof is known."

Defendants filed a demurrer to the complaint on March 1, 1983, on the grounds that: (1) the complaint was uncertain, ambiguous and unintelligible; (2) I.J. Weinrot and Son, Inc., was not a proper party and had no legal capacity to sue for negligence and that, therefore, the court had no jurisdiction over the subject matter of plaintiff's fifth cause of action; and (3) plaintiff did not state in paragraph 31 of the fifth cause of action whether the employment contract referred to was oral or written.

By minute order entered April 8, 1983, the court ruled: "As to 5th cause of action the demurrer is sustained on grounds stated therein, without leave to amend."

On April 22, 1983, plaintiff filed a motion for reconsideration of the court's order sustaining the demurrer. The motion was denied on June 10, 1983, but the trial court took under submission defendants' request for sanctions. By minute order entered June 13, 1983, the court ruled as follows: "Sanctions are awarded to defendants against the plaintiff Weinrot and son Inc. [sic] in the sum of $250.00 payable forthwith."

On July 19, 1983, judgment was entered against the plaintiff corporation on the order sustaining the demurrer without leave to amend; on July 25, a judgment was entered against plaintiff corporation on the order denying the reconsideration motion. This appeal followed.

DISCUSSION

1. Timeliness of Appeal

Before reaching the merits of this appeal, we address defendants' preliminary contention that the notice of appeal was not timely filed and the appeal, therefore, should be dismissed. Specifically, defendants argue that: (1) the time for filing an appeal from the trial court's order sustaining defendants' demurrer began to run on April 8, 1983, when the court entered its minute order, but the notice of appeal was not filed until August 8, 1983, more than double the 60 days period permitted for the filing of a notice of appeal under rule 2 of the California Rules of Court; (2) while not conceding the timely filing of plaintiff's motion to reconsider the order sustaining the demurrer, plaintiff failed to file the notice of appeal within 30 days of the order denying its reconsideration motion, as prescribed by rule 3 of the California Rules of Court and Blue Mountain Development Co. v. Carville (1982) 132 Cal.App.3d 1005, 1009-1010, 183 Cal.Rptr. 594; and (3) the motion for reconsideration was not appealable because it was based on the same factual showing as was made in plaintiff's opposition to the demurrer. (Blue Mountain Development Co. v. Carville, supra, 132 Cal.App.3d at p. 1011, 183 Cal.Rptr. 594.) We reject all of these arguments.

An order sustaining a demurrer without leave to amend is not an appealable order; only a judgment entered on such an order can be appealed. (Jackson v. Teachers Ins. Co. (1973) 30 Cal.App.3d 341, 343, 106 Cal.Rptr. 208; see generally 6 Witkin, Cal.Procedure (2d ed. 1971) Appeal, § 64, p. 4078.) Such a judgment was entered here on July 19, 1983, and the time period for the filing of a notice of appeal commenced to run on that date. (Cal.Rules of Court, rule 2.) Therefore, the August 8, 1983, filing of the notice of appeal was timely.

The issues of whether plaintiff was required to, and did in fact, comply with the time requirements for filing a reconsideration motion under Code of Civil Procedure section 1008, and whether the same factual showing was made in that motion as had been made previously, need not be considered here because the order denying reconsideration is nonappealable for a more fundamental reason. "If the original ruling is not final and appealable in its own right, then it is not a judgment and an order denying reconsideration cannot be appealable. '[A]n appeal may not be taken from a nonappealable order by the device of moving to vacate the order and appealing from a ruling denying the motion.' (Litvinuk v. Litvinuk (1945) 27 Cal.2d 38, 43-44 .)" (Blue Mountain Development Co. v. Carville, supra, 132 Cal.App.3d at p. 1010, 183 Cal.Rptr. 594.) However, that portion of the June 13, 1983, order awarding sanctions of $250 to defendants is appealable "because it is a final order on a collateral matter directing the payment of money. (Citations.)" (O'Brien v. Cseh (1983) 148 Cal.App.3d 957, 960, 196 Cal.Rptr. 409.) Therefore, only the order awarding sanctions and the judgment of July 19, 1983, are properly before this court on appeal.

2. Order Sustaining Demurrer Without Leave to Amend

At the outset, we find that it was error to sustain the demurrer on the ground that plaintiff lacked legal capacity to sue; "since a corporation may sue (Corp.Code, § 801, subd. (a)), the complaint shows on its face that plaintiff does have legal 'capacity' to sue. (California Steam Navigation Co. v. Wright (1856) 6 Cal. 258, 261; 3 Witkin, Cal.Procedure (2d ed. 1971) Pleading, §§ 751, 752, pp. 2373, 2374.)" (Friendly Village Community Assn., Inc. v. Silva & Hill Constr. Co. (1973) 31 Cal.App.3d 220, 224, 107 Cal.Rptr. 123.)

Although the order sustaining the demurrer here was based on the grounds of the court's lack of subject matter jurisdiction, corporate plaintiff's lack of capacity to sue, and failure to state whether the employment contract was oral or written, the underlying issue addressed by the parties and the trial court is whether a corporate employer plaintiff can state a cause of action for damages under Civil Code section 49, subdivision (c). ¹

Section 49, subdivision (c), enacted in 1872 and last amended in 1939, provides:

"The rights of personal relations...