4DCA Division 3 Oral Argument - 2026/06/16 - Jun 16, 2026

argument

4DCA Division 3 Oral Argument - 2026/06/16

California Fourth District Court of Appeal, Division Three 2h 1m 8 chapters transcribed 1 month ago official recording ↗

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Does a sole shareholder have standing to sue on behalf of the corporation?

Unknown 37:48

All of that evidence supports the trial court's finding that Ms. Napier did not have standing to bring the claims because it's well established under California law that shareholders, even sole shareholders, cannot bring claims in their individual names on behalf of a corporation. And the cases that we cite in our brief, including Bong, Fitzgerald, and Vinci, all of these cases deal with very similar facts, and the court found that the shareholder, and at least two of those, they were the sole shareholder, did not have standing to bring the claims on behalf of the corporation. And none of Ms. Napier's arguments to the contrary require a different outcome. For example, Mr. Napier referenced that Ms.

Unknown 38:37

Napier testified that she submitted a declaration that she purchased the computer and services on behalf in her individual name on behalf of the corporation. That testimony is directly contradicted by all of the deposition testimony that I just went through with you. And in that scenario, the D'Amico versus Board of Medical Examiners case says that when a party has made admissions and concessions in discovery, contradictory declarations can't be used to create an issue of fact. She also said that she allegedly transferred the rights of the corporation to herself individually. But that assignment wasn't pled. And it is clear under California law that to create a triable issue of material fact, the opposition evidence must be directed to issues raised by the pleading.

Unknown 39:33

And this isn't a mere technicality because the pleadings established the scope of an action. And even in the cases that she cites, allegedly to support the proposition that her declaration testimony was sufficient to establish this assignment, in each of those cases, the assignment was expressly pled and that did not happen here. For all these reasons, the court should affirm the trial court's order granting summary judgment on the ground that she lacks standing. But even if the court has any questions about that, the fact that she has no damages in her individual capacity, that she testified that all of the out-of-pocket costs were paid by the corporation, that the lost data belonged to the corporation, that the time she spent

Unknown 40:16

restoring the data was spent on behalf of the corporation and that she didn't have any damages in her individual capacity. All of that, I mean, shows that she has no individual damages, which is an essential element of every single one of her claims. And so that's a further ground on which the trial court's summary judgment order could be affirmed. Even if the court, dismissal of each of her claims can also be affirmed on our separate motion for summary adjudication. The evidence I've already talked about establishes that her breach of contract and negligence claims fail because there was no contract between Ms. Napier and Dell, and also because Dell owed her no duty in her individual capacity, both of which are essential elements for those claims.

Unknown 41:07

turning really briefly to fraudulent inducement. An element of the fraud claim is that Dell knew that its representations about the service agreement were false when made. Ms. Napier testified that with the exception of the service she received on May 10th, she had no complaints about any service the corporation received through its service agreements with Dell, undercutting her argument that Dell did not intend to pursue sorry, to perform the service agreement when it was entered into. She also testified she was not aware of any facts showing that Dell did not intend to comply with the terms of the service agreement when it was purchased. Another element of her fraud claim is that she acted in reliance on the misrepresentations.

Unknown 41:50

Again, she took no actions here in her individual capacity. So in her individual capacity, she didn't rely on anything. She also testified that she did not see the alleged fraudulent misrepresentations on Dell's website and couldn't recall seeing them anywhere before purchasing the computer and services so that she couldn't have relied on the alleged misrepresentations at all.