Legal Memorandum: Lack of Capacity Defense in CA

Issue: Under California law, if a defendant fails to plead the defense of lack of capacity will he or she be deemed to have waived it?

California courts have carefully explained that the lack of capacity to sue differs from lack of standing in that incapacity is a technical legal disability that "deprives a party of the right to come into court," while standing "goes to the existence of a cause of action."  Color-Vue, Inc. v. Abrams, 44 Cal. App. 4th 1599, 1604, 52 Cal. Rptr. 2d 443, 446 (1996).  Lack of capacity defenses arise, then, as a challenge to the plaintiff’s authority to assert a claim, not whether a claim exists.  Typical legal disabilities causing incapacity are infancy, insanity or a lack of good standing by a corporation.  See Color-Vue, 44 Cal. App. 4th at 1604, 52 Cal. Rptr. 2d at 446.  A trustee’s authority to sue on behalf of a corporation also is an issue of legal capacity.  Roadman v. Traeger, 5 Cal. App. 2d 749, 43 P.2d 564, 564 (1935).  As one early court explained, a demurrer for lack of capacity to sue raises the issue of whether a plaintiff who sues in a representative capacity "actually possesses the character in which he sues."  Klopstock v. Superior Court, 17 Cal. 2d 13, 18, 108 P.2d 906, 909 (1941).

The Klopstock decision illustrates the distinction between the two defenses.  In that case, the legatee of a stockholder who had died initiated a derivative claim on behalf of the estate.  Id. at 17, 108 P.2d at 908.  The defendants demurred, alleging that the legatee […]