Abrams

This is an appeal from the dismissal of an action on the date set for trial, granted on the basis of a claim that a corporation’s failure to pay its franchise taxes deprived the corporation of standing to sue or defend. The claim was first raised on that date. The corporation also appeals from a default judgment entered against it on the same ground in a consolidated action. Because a corporation’s failure to pay its franchise taxes results in a lack of capacity to sue or defend, not a lack of standing, and because respondents did not timely raise the plea in abatement of lack of capacity, we reverse the judgments and remand for further proceedings.

Facts

Respondents Michael Abrams and James Leonard are former attorneys for appellant Color-Vue, Inc. On July 11, 1991, Abrams sued Color-Vue and its directors, appellants Joan Webb, Keith Harrison, Douglas LaPlante, and James Burt, in municipal court for unpaid legal fees. On May 14, 1992, Color-Vue sued Abrams and Leonard in superior court for legal malpractice. Leonard cross-claimed for unpaid legal fees. The two cases were consolidated in superior court on November 2, 1992.

Trial of the consolidated actions was set for…