A Corporation’s Revival Validated Its Appeal

Bourhis v. Lord
(Cal. Sup. Ct.), filed March 4, 2013

If a corporation fails to pay its taxes, the state may suspend its corporate powers.  When its corporate powers are suspended, a corporation cannot prosecute a lawsuit or defend itself against one.

The state may later revive those powers if the corporation pays its taxes.

The California Supreme Court held that a corporation that files notices of appeal while its corporate powers are suspended may proceed with the appeals after those powers have been revived, even if the revival occurs after the time to appeal has expired.

The Court based its decision on two decisions it rendered in the 1970’s:  Rooney v. Vermont Investment Corp., 10 Cal.3d 351 (1973) and Peacock Hill Assn. v. Peacock Lagoon Constr. Co., 8 Cal.3d 369 (1972).  The Court opted to adhere to those decisions due to principles of stare decisis.