Judge: Elaine Lu, Case: 22STCV00606, Date: 2023-03-02 Tentative Ruling
Case Number: 22STCV00606 Hearing Date: March 2, 2023 Dept: 26
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EUGENE ROBIN, and GRACE ROBIN, Plaintiffs, v. dossier capital llc; dcla design build, inc.; et al., Defendants, |
Case No.: 22STCV00606 Hearing Date: March 2, 2023 [TENTATIVE] order RE: Plaintiffs motion to amend judgment |
Procedural Background
On January
6, 2022, Plaintiffs Eugene Robin and Grace Robin (jointly “Plaintiffs”) filed
the instant action against Dossier Capital LLC (“Dossier”) and DCLA Design
Build, Inc. (“DCLA”) (jointly “Defendants”) seeking to enforce a prior
settlement between the parties. The
complaint asserted a single cause of action for breach of contract. On September 29, 2022, pursuant to the
parties’ stipulation, judgment was entered in favor of Plaintiffs against
Defendants in the principal amount of $149,282.59, plus interest at a rate of
ten percent (10%) per year.
On
February 6, 2023, Plaintiffs filed the instant motion to amend judgment seeking
to add Meadowvale LLC, DCLA LLC, 222Eight LLC, KnEads LLC, and UnCoolidge LLC as
judgment debtors on the ground that they are the alter egos of Defendants. All parties, including the proposed alter ego
judgment debtors have been served. No
opposition has been filed. On February
23, 2023, Plaintiffs filed a notice of non-opposition.
Request for
Judicial Notice
Plaintiffs request that the Court
take judicial notice of:
1.
Dossier Capital LLC Statement of
Information, File No. 20-E32958, filed October 27, 2020 with the California
Secretary of State;
2.
Dossier Capital LLC Statement of
Information, File No. BA20220868360, filed September 20, 2022 with the
California Secretary of State;
3.
DCLA Design Build, Inc. Statement of
Information, File No. BA20220584797, filed July 28, 2022 with the California
Secretary of State;
4.
Meadowvale LLC Statement of Information,
File No. 21-B97851, filed April 12, 2021 with the California Secretary of
State;
5.
Deed of Trust and Assignment of Rents
concerning real property located at 2822 Rosanna Street, Document No.
20220047575, recorded January 1, 2022 with the Los Angeles County Recorder’s
Office;
6.
Complaint (with exhibits) filed July 16,
2018, in Dossier Capital LLC v. Walter Frias, Los Angeles Superior Court Case
No. BC713891;
7.
Grant Deed conveying title to real
property located at 2348 Eads Street, Document No. 20181321707, recorded
December 31, 2018 with the Los Angeles County Recorder’s Office;
8.
Grant Deed conveying title to real
property located at 2692 Fair Oaks Avenue, Document No. 20180938086, recorded
September 13, 2018 with the Los Angeles County Recorder’s Office;
9.
Grant Deed conveying title to real
property located at 2355 Meadowvale Avenue, Document No. 20190099394, recorded
February 1, 2019 with the Los Angeles County Recorder’s Office;
10.
DCLA LLC Statement of Information, File
No. 22-B10238, filed February 18, 2022 with the California Secretary of State;
11.
222Eight LLC Registration / Articles of
Organization, File No. 202126710790, filed September 22, 2021 with the
California Secretary of State;
12.
222Eight LLC Statement of Information,
File No. BA20220868115, filed September 20, 2022 with the California Secretary
of State;
13.
Grant Deed conveying title to real
property located at 2228 Meadowvale Avenue, Document No. 20211629750, recorded
October 29, 2021 with the Los Angeles County Recorder’s Office;
14.
KnEads LLC Registration / Articles of
Organization, File No. 202126710748, filed September 22, 2021 with the
California Secretary of State;
15.
KnEads LLC Statement of Information, File
No. BA20220868465, filed September 20, 2022 with the California Secretary of
State;
16.
Grant Deed conveying title to real
property located at 2348 Eads Street, Document No. 20211597194, recorded
October 25, 2021 with the Los Angeles County Recorder’s Office;
17.
Building Permit No. 21019-10000-00101,
paid for on October 28, 2021 and issued that date by the City of Los Angeles
Department of Building and Safety;
18.
UnCoolidge LLC Registration / Articles of
Organization, File No. 202126710785, filed September 22, 2021 with the
California Secretary of State;
19.
UnCoolidge LLC Statement of Information,
File No. BA20220868558, filed September 20, 2022 with the California Secretary
of State;
20.
Grant Deed conveying title to real
property located at 2909 N. Coolidge Avenue, Document No. 20211651667, recorded
November 4, 2021 with the Los Angeles County Recorder’s Office; and
21.
Building Permit No. 21010-10000-06185,
paid for on September 15, 2022 and issued that date by the City of Los Angeles
Department of Building and Safety.
As the Court may take judicial
notice of court records and actions of the State, (See Evid. Code, §
452(c)(d)), defendants’ unopposed requests for judicial notice are GRANTED as
to the facts and documents cited above.
However, the Court will not take judicial notice of the truth of
assertions within. (See Herrera v. Deutsche Bank National Trust Co.
(2011) 196 Cal.App.4th 1366, 1375.)
Legal Standard
Pursuant
to Code of Civil Procedure section 187, “[w]hen jurisdiction is, by the
Constitution or this Code, or by any other statute, conferred on a Court or
judicial officer, all the means necessary to carry it into effect are also
given; and in the exercise of this jurisdiction, if the course of proceeding be
not specifically pointed out by this Code or the statute, any suitable process
or mode of proceeding may be adopted which may appear most conformable to the
spirit of this Code.” (Id.) “Under Code of Civil Procedure section 187 …
the trial court is authorized to amend a judgment to add additional judgment
debtors.” (Carolina Casualty Ins. Co.
v. L.M. Ross Law Group, LLP (2012) 212 Cal.App.4th 1181, 1188.)
“
‘As a general rule, “a court may amend its judgment at any time so that the
judgment will properly designate the real defendants.” ... Judgments may be
amended to add additional judgment debtors on the ground that a person or
entity is the alter ego of the original judgment debtor.... “Amendment of a
judgment to add an alter ego ‘is an equitable procedure based on the theory
that the court is not amending the judgment to add a new defendant but is
merely inserting the correct name of the real defendant.’ ” ’ ” (Greenspan
v. LADT, LLC (2010) 191 Cal.App.4th 486, 508.) “ ‘The ability under
section 187 to amend a judgment to add a defendant, thereby imposing liability
on the new defendant without trial, requires both (1) that the
new party be the alter ego of the old party and (2) that the
new party had controlled the litigation, thereby having had the opportunity to
litigate, in order to satisfy due process concerns.’ [Citation.]” (Toho-Towa Co., Ltd. v. Morgan Creek
Productions, Inc. (2013) 217 Cal.App.4th 1096, 1106.)
Discussion
Plaintiffs seek to add Meadowvale LLC, DCLA LLC,
222Eight LLC, KnEads LLC, and UnCoolidge LLC as judgment debtors pursuant to
Code of Civil Procedure section 187.
Plaintiffs’ Counsel states that since entry of judgment, neither
Defendant has made any payments to satisfy the judgment. Nor has the judgment been otherwise
satisfied. (Bloom Decl. ¶ 13.) Plaintiffs’ Counsel conducted a search for
Defendants’ assets but was unable to find assets in their name because Defendants
had transferred their assets into the names of Meadowvale LLC, DCLA LLC,
222Eight LLC, KnEads LLC, and UnCoolidge LLC.
Alter Ego
“In California, two conditions must be met before
the alter ego doctrine will be invoked. First, there must be such a unity of interest
and ownership between the corporation and its equitable owner that the separate
personalities of the corporation and the shareholder do not in reality exist.
Second, there must be an inequitable result if the acts in question are treated
as those of the corporation alone.” (Sonora Diamond Corp. v. Superior
Court (2000) 83 Cal.App.4th 523, 538.)
In determining whether these two conditions are met
and whether alter ego liability exists, the Court must consider several factors,
including:
[1] [c]ommingling of
funds and other assets, failure to segregate funds of the separate entities,
and the unauthorized diversion of corporate funds or assets to other than
corporate uses ...; [2] the treatment by an individual of the assets of the
corporation as his own ...; [3] the failure to obtain authority to issue stock
or to subscribe to or issue the same ...; [4] the holding out by an individual
that he is personally liable for the debts of the corporation ...; the failure
to maintain minutes or adequate corporate records, and the confusion of the
records of the separate entities ...; [5] the identical equitable ownership in
the two entities; the identification of the equitable owners thereof with the
domination and control of the two entities; identification of the directors and
officers of the two entities in the responsible supervision and management;
sole ownership of all of the stock in a corporation by one individual or the
members of a family ...; [6] the use of the same office or business location;
the employment of the same employees and/or attorney ...; [7] the failure to
adequately capitalize a corporation; the total absence of corporate assets, and
undercapitalization ...; [8] the use of a corporation as a mere shell,
instrumentality or conduit for a single venture or the business of an
individual or another corporation ...; [9] the concealment and
misrepresentation of the identity of the responsible ownership, management and
financial interest, or concealment of personal business activities ...; [10]
the disregard of legal formalities and the failure to maintain arm's length
relationships among related entities ...; [11] the use of the corporate entity
to procure labor, services or merchandise for another person or entity ...;
[12] the diversion of assets from a corporation by or to a stockholder or other
person or entity, to the detriment of creditors, or the manipulation of assets
and liabilities between entities so as to concentrate the assets in one and the
liabilities in another ...; [13] the contracting with another with intent to
avoid performance by use of a corporate entity as a shield against personal
liability, or the use of a corporation as a subterfuge of illegal transactions
...; [14] and the formation and use of a corporation to transfer to it the existing
liability of another person or entity.
(Greenspan
v. LADT, LLC (2010) 191 Cal.App.4th 486, 512–13; see also Associated
Vendors, Inc. v. Oakland Meat Co. (1962) 210 Cal.App.2d 825 [naming 28
factors supporting a finding of alter ego liability.].) This list is not
exhaustive. Hence, these factors may be considered among others.
However, no single factor is determinative. (Greenspan v. LADT, LLC
(2010) 191 Cal.App.4th 486, 512–13.) Whether an alter ego relationship
exists is generally an issue of fact. (VirtualMagic Asia, Inc. v.
Fil-Cartoons, Inc. (2002) 99 Cal.App.4th 228, 245.)
Here, Defendant Dossier is a limited
liability company that has three principal members – Michael Randall, Michael
De La Cruz, and Dennis Battung – with Randall as the managing member. (RJN Exh 1.)
Dossier has two address 3579 E. Foothill Blvd. #102, Pasadena, CA 91107
and 2241 Fernleaf Street, Los Angeles, CA 90031. (RJN Exh. 2.)
Dossier’s agent for service of process is Courtney Nakamura. (RJN Exh. 1.)
Defendant DCLA is a corporation that
has three principal members – Michael Randall, Michael De La Cruz, and Dennis
Battung – with Randall as the Director.
(RJN Exh. 3.) DCLA uses 3579 E.
Foothill Blvd. #102, Pasadena, CA 91107 as its business address. (RJN Exh. 3.) DCLA’s agent for service of
process is also Courtney Nakamura. (RJN
Exh. 3.)
Meadowvale LLC is a limited liability company
with the same three managers as Defendants – Randall, De La Cruz, and Battung. (RJN Exh. 4.)
Meadowvale LLC uses the same 3579 E. Foothill Blvd. #102,
Pasadena, CA 91107 address. (RJN Exh.
4.) Meadowvale LLC has the same agent for service
of process, Courtney Nakamura. (RJN Exh.
4.) Moreover, Defendant Dossier twice transferred
real property to Meadowvale LLC acknowledging that no documentary transfer tax
was paid in connection with each alleged transaction since “[t]he grantors and
the grantees in this conveyance are comprised of the same parties who continue
to hold the same proportionate interest in the property.” (RJN Exhs. 8-9.)
DCLA LLC is also a limited liability with the same three
managers as Defendants – Randall, De La Cruz, and Battung. (RJN Exh. 10.) DCLA LLC has the same mailing address as
Defendants, 3579
E. Foothill Blvd. #102, Pasadena, CA 91107 and the same office address 2241
Fernleaf Street, Los Angeles, CA 90031. (RJN
Exh. 10.) DCLA LLC has the same agent
for service of process as Defendants, Courtney Nakamura. (RJN Exh. 10.) Moreover, DCLA LLC and Defendants have
commingled funds as DCLA LLC made some of the original settlement payments on
behalf of Defendants. (Robin Decl. ¶ 8, Exh. D.)
222Eight LLC is a limited liability company with the same
three managers as Defendants – Randall, De La Cruz, and Battung. (RJN Exh. 12.) 222Eight LLC has the same mailing address as Defendants,
3579
E. Foothill Blvd. #102, Pasadena, CA 91107 and the same office address 2241
Fernleaf Street, Los Angeles, CA 90031. (RJN
Exh. 12.) 222Eight LLC has the same agent for service of process as Defendants,
Courtney Nakamura. (RJN Exh. 13.) Moreover, when Defendant Dossier transferred
title to its last piece of real property to 222Eight, it acknowledged that no
documentary transfer tax was paid (in connection with each alleged transaction
since “[t]he grantors and the grantees in this conveyance are comprised of the
same parties who continue to hold the same proportionate interest in the
property.” (RJN Exs. 13.)
KnEads LLC is a limited liability with the same three
managers as Defendants – Randall, De La Cruz, and Battung. (RJN Exh.15.)
KnEads LLC has the same mailing address as Defendants, 3579 E. Foothill
Blvd. #102, Pasadena, CA 91107 and the same office address 2241 Fernleaf
Street, Los Angeles, CA 90031. (RJN
Exh. 15.) KnEads LLC has the same agent
for service of process as Defendants, Courtney Nakamura. (RJN Exh. 15.) Moreover, when the principals of Defendants had
Meadowvale LLC transfer title to real property to KnEads LLC, they acknowledged
that no documentary transfer tax was paid in the alleged transaction since
“[t]he grantors and the grantees in this conveyance are comprised of the same
parties who continue to hold the same proportionate interest in the property.”
(RJN, Exs. 16.)
UnCoolidge LLC is a limited liability with the same three
managers as Defendants – Randall, De La Cruz, and Battung. (RJN Exhs. 18-19.) UnCoolidge LLC has the same mailing address
as Defendants, 3579
E. Foothill Blvd. #102, Pasadena, CA 91107 and the same office address 2241
Fernleaf Street, Los Angeles, CA 90031. (RJN
Exh. 19.) UnCoolidge LLC has the same
agent for service of process as Defendants, Courtney Nakamura. (RJN Exh. 19.) Moreover, when the principals of Defendants had
DCLA LLC transfered title to real property to UnCoolidge LLC, they acknowledged
that no documentary transfer tax was paid in the alleged transaction since
“[t]he grantors and the grantees in this conveyance are comprised of the same
parties who continue to hold the same proportionate interest in the property.”
(RJN, Exs. 20.)
Based on the above evidence it is clear that there is
identical ownership in Defendants, Meadowvale LLC, DCLA LLC, 222Eight LLC,
KnEads LLC, and UnCoolidge LLC, that they all have the same address, the same
officers, and that they comingle assets.
Defendants have transferred their assets to Meadowvale LLC, DCLA LLC,
222Eight LLC, KnEads LLC, and UnCoolidge LLC. Not recognizing Meadowvale LLC, DCLA LLC,
222Eight LLC, KnEads LLC, and UnCoolidge LLC as alter egos of Defendants under
these circumstances would promote an unjust and inequitable result. Accordingly, Plaintiffs sufficiently show
that Meadowvale LLC, DCLA LLC, 222Eight LLC, KnEads LLC, and UnCoolidge LLC are
alter egos of Defendants.
Control of Litigation
Due process “guarantees that any person against whom a
claim is asserted in a judicial proceeding shall have the opportunity to be
heard and to present his defenses.” (Motores De Mexicali v. Superior Court (1958)
51 Cal.2d 172, 176.) “Control of the
litigation sufficient to overcome due process objections may consist of a
combination of factors, usually including the financing of the litigation, the
hiring of attorneys, and control over the course of the litigation.” (NEC Electronics Inc. v. Hurt (1989)
208 Cal.App.3d 772, 781.)
Here, the Alter Ego Entities, Meadowvale LLC, DCLA LLC,
222Eight LLC, KnEads LLC, and UnCoolidge LLC, were clearly in control of the
litigation as their principals Randall and De La Cruz were involved and
controlled the litigation. For example,
in June, 2022, on behalf of Defendant Dossier, Randall signed an omnibus
verification for Dossier’s responses to all written discovery – Form
Interrogatories, Special Interrogatories, Requests for Admission and Requests
for Production of Documents. (Bloom Decl. ¶ 9(a), Exh. A). Similarly, in June,
2022, on behalf of Defendant DCLA, De La Cruz signed an omnibus verification
for DCLA’s responses to all written discovery – Form Interrogatories, Special
Interrogatories, Requests for Admission and Requests for Production of Documents.
(Bloom Decl. ¶ 9(b), Exh. B). Finally, in August, 2022, Randall and De La Cruz
both signed the Stipulation for Entry of Judgment that was filed with the Court
on September 6, 2022.
Thus, based on this evidence it is clear that Alter Ego
Entities, Meadowvale LLC, DCLA LLC, 222Eight LLC, KnEads LLC, and UnCoolidge
LLC had control of the litigation such as to overcome due process concerns.
CONCLUSION
AND ORDER
Based on the foregoing, Plaintiff Eugene
Robin and Grace Robin’s motion to amend judgment is GRANTED.
//
//
//
The Judgment is Amended to include Meadowvale
LLC, DCLA LLC, 222Eight LLC, KnEads LLC, and UnCoolidge LLC as alter egos of Dossier
Capital LLC and DCLA Design
Build, Inc.
Moving Parties are to provide notice of
this order and file proof of service of such.
DATED: March 2, 2023 ___________________________
Elaine
Lu
Judge
of the Superior Court