Judge: Gail Killefer, Case: 20STCP01839, Date: 2024-05-31 Tentative Ruling
Case Number: 20STCP01839 Hearing Date: May 31, 2024 Dept: 37
HEARING
DATE: Friday, March 31,
2024
CASE
NUMBER: 20STCP01839
CASE NAME: Marina
Letuchaya Darasalia v. IDD Inc.
MOVING PARTY: Plaintiff/Judgment Creditor Marina Letuchaya
Darasalia
OPPOSING PARTY: Lorenzo Cascino and Defendant IDD, Inc.
TRIAL DATE: N/A
PROOF OF SERVICE: OK
PROCEEDING: Motion to Amend Judgment
OPPOSITION: 17 May 2024
REPLY: 21
May 2024
TENTATIVE: Plaintiff’s
Motion to Amend the Judgment is denied. Plaintiff to give notice.
Background
On June 4, 2020, the California Labor
Commissioner requested the Clerk Enter Judgment pursuant to a Judgment on a
Final Order, Decision or Award of the Labor Commissioner.
On April 28, 2020, the Labor Commissioner entered
a Judgment against IDD, Inc., ("IDD") in favor of Mariana Letuchaya
Darsalia (“Plaintiff”) in the matter entitled Marina Letuchaya v. IDD, Inc.,
a California Corporation, 8 State Case No. WC-CM-457503.
Plaintiff now moves to amend the judgment to
add Lorenzo Cascino as a Judgment Debtor because he is the alter ego of IDD.
Cascino opposes the Motion and has filed a joiner to IDD’s opposition. The
matter is now before the court.
I. Legal
Standard
Under¿CCP § 187,
a trial court has jurisdiction to modify a judgment to add additional judgment
debtors. Section 187 grants every court the power to use all means to carry its
jurisdiction into effect, even if those processes are not set out in the code.
Section 187 states: “When 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.” (CCP §
187.)¿
Using section
187, judgments are typically “amended to add additional judgment debtors on the
grounds that a person or entity is the alter ego of the original judgment
debtor. This 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. ‘Such a procedure is an appropriate and complete
method by which to bind new individual defendants where it can be demonstrated
that in their capacity as alter ego of the corporation they in fact had control
of the previous litigation, and thus were virtually represented in the
lawsuit.’”¿(See¿NEC Electronics Inc. v. Hurt¿(1989) 208 Cal.App.3d 772,
778; see¿also¿Greenspan v.¿LADT, LLC¿(2010) 191 Cal.App.4th 486, 508.)¿
CCP § 187 contemplates amending a judgment pursuant to a
noticed motion. (Wells Fargo Bank, N.A. v. Weinberg
(2014) 227 Cal.App.4th 1, 9.) The court is not required to hold an evidentiary
hearing on a motion to amend a judgment but may rule on the motion based solely
on declarations and other written evidence. (Ibid.) No statute of
limitations applies to a motion to amend a judgment to add a judgment debtor.
To the contrary, the motion may be made at any time during the judgment’s
enforceable period. (Highland Springs, supra, 244 Cal. App.
4th at p. 287; Lopez v. Escamilla (2020) 48 Cal.App.5th 763,
766.)
II. Request
for Judicial Notice
The court may take judicial notice of
“official acts of the legislative, executive, and judicial departments of the
United States and of any state of the United States,” “[r]ecords of (1) any
court of this state or (2) any court of record of the United States or of any
state of the United States,” and “[f]acts and propositions that are not
reasonably subject to dispute and are capable of immediate and accurate
determination by resort to sources of reasonably indisputable accuracy.” (Evid.
Code, § 452(c), (d), and (h).) “Taking judicial notice of a document is not the same as accepting the
truth of its contents or accepting a particular interpretation of its meaning.”
(Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.)
Plaintiff requests judicial notice of the following:
1) The operative Order, Decision or Award of the
Labor Commissioner, issued by the California Labor Commissioner's Office in the
matter of Marina Letuchaya v. IDD, Inc., a California Corporation, State
Case No. WC-CM-457503, dated December 27, 2019 (“Order” ), and filed with the
Los Angeles County Superior Court, Case No. 20STCP01839, a true and correct
copy of which are attached as Exhibit 1.
1)
2) The Request That Clerk Enter Judgment and
Judgment on Final Order, Decision or Award of the Labor Commissioner, issued by
the California Labor Commissioner's Office in the matter of Marina Letuchaya
v. IDD, Inc., a California Corporation, State Case No. WC— 16 CM-457503,
dated April 28, 2020 (“Request”), filed with the Los Angeles County Superior
Court, Case No. 20STCP01839, and entered as a
judgment on June 4, 2020, a true and correct copy of which is attached
as Exhibit 2.
3) The court docket of Los Angeles Superior
Court, Dept. 37 in the matter of Marina Letuchaya Darsalia v. IDD, Inc.,
a California Corporation, Case No. 20STCP01839 (“Docket”), a true and correct
copy of which is attached as Exhibit 3.
4) The Statement of Information filed by IDD,
Inc., a California corporation with the California Secretary of State, dated
May 2, 2022 (“Statement”), a true and correct copy of which is attached as Exhibit
4. This record is readily available on the website http:
//businesssearch.sos.ca.gov, maintained by the California Secretary of State.
The facts contained in Exhibit 4 are therefore "not reasonably subject to
dispute and are capable of immediate and accurate determination by resort to
sources of reasonably indisputable accuracy." (Evid. Code § 452(h).)
5) The Certificate of Dissolution filed by IDD,
Inc., a California corporation with the California Secretary of State, dated
May 20, 2022 (“Certificate”), a true and correct copy of which is attached as Exhibit
5. These records are readily available on a website http:
//businessseazch.sos.ca.gov, maintained by the California Secretary of State.
The facts contained in Exhibit 5 are therefore "not reasonably
subject to dispute and are capable of immediate and accurate determination by
resort to sources of reasonably
indisputable accuracy." (Evid. Code § 452(h).)
Plaintiff’s
request for judicial notice is granted.
III. Discussion
On December 27, 2019, the Labor Commissioner ordered that
Defendant IDD pay Plaintiff a total of $39,009.98 as follows:
(RJN Ex. 1.)
Plaintiff now moves to amend the judgment pursuant to CCP
§ 187 and Lab. Code § 558.1 and add Lorenzo Cascino (“Cascino”) as a Judgment
Debtor.
A. The
Court’s Authority to Amend the Judgment
Cascino disputes the court’s authority to
amend the judgment of the Labor Commissioner, pursuant to CCP § 187 on the
basis that it is not the judgment of this court. “Pursuant to its authority
under section 187, the trial court may amend a judgment to add a judgment
debtor.” (Favila v. Pasquarella (2021) 65 Cal.App.5th 934, 942 (Favila).)
Lab. Code § 98.2(e) states as follows:
The Labor Commissioner shall file, within 10 days of the
order becoming final pursuant to subdivision (d), a certified copy of the final
order with the clerk of the superior court of the appropriate county unless a
settlement has been reached by the parties and approved by the Labor
Commissioner. Judgment shall be entered immediately by the court clerk in
conformity therewith. The judgment so entered has the same force and effect as,
and is subject to all of the provisions of law relating to, a judgment in a
civil action, and may be enforced in the same manner as any other judgment of
the court in which it is entered. Enforcement of the judgment shall receive
court priority.
As the Judgment of the Labor Commissioner is
to be treated the same as a judgment in a civil action, this court has the
authority to amend the Judgment.
B. Plaintiff
Has Not Produced Substantial Evidence that Cascino is the Alter-Ego of IDD
Pursuant to CCP § 187, Plaintiff seeks to amend the
judgment and add Cascino as a Judgment Debtor. “To prevail on a motion to add a
judgment debtor, the judgment creditor generally must show, by a preponderance
of the evidence, that ‘(1) the parties to be added as judgment debtors had
control of the underlying litigation and were virtually represented in that
proceeding; (2) there is such a unity of interest and ownership that the
separate personalities of the entity and the owners no longer exist; and (3) an
inequitable result will follow if the acts are treated as those of the entity
alone.’ ” (Favila, supra, 65
Cal.App.5th at p. 947 citing Relentless Air Racing, LLC v.
Airborne Turbine Ltd. Partnership (2013) 222 Cal.App.4th 811, 815.)
In deciding to amend the judgment, the “[f]actual findings necessary to the
court's decision are reviewed to determine whether they are supported by
substantial evidence.” (Favila, at p. 943.)
i. Control of the Underlying Litigation
and Virtually Represented
In support of the first prong, Plaintiff offers evidence
that Cascino appeared on behalf of Defendant IDD in the action before the Labor
Commissioner (the “Underlying Action”). IDD was represented by counsel and
Cascino appeared as its President. (RJN Ex. 1 at p. 2:1-3.)
However, Plaintiff fails to cite case law to show that
Casino’s appearance in the Underlying Action as the President of IDD is
sufficient to support the finding that Casino virtually controlled the
underlying litigation or funded the defense of IDD. The Statement of
Information filed by IDD on May 2, 2022, shows that Casino was the sole
Director and Chief Executive Officer, Secretary, and Chief Financial Officer at
that time, but fails to show that at the time of the Underlying Action and the
date the Labor Commissioner entered a Judgment on April 28, 2020, Cascino was
the sole director of IDD. (RJN Ex. 4.)
The first prong of Section 198 may be satisfied by a
finding that Casino was the sole director of IDD and no other persons exercised
control over IDD:
Yet
throughout the litigation Pasquarella was one of
the two owners of Get Flipped and its secretary and chief financial officer.
Absent contrary evidence, it was not unreasonable for the trial court to find
this aspect of the general test for adding a judgment debtor had been
satisfied.
(Favila, supra, 65 Cal.App.5th at p. 948.)
Here, however, Plaintiff presents no evidence
that Casino hired or funded counsel to represent IDD in the Underlying Action.
ii. Unity of Interest
“In determining whether
there is a sufficient unity of interest and ownership, the court considers many
factors, including “the commingling of funds and assets of the two
entities, identical equitable ownership in the two entities, use of the same
offices and employees, disregard of corporate formalities, identical directors
and officers, and use of one as a mere shell or conduit for the affairs of the
other. [Citation.]” (Highland Springs Conference & Training Center
v. City of Banning (2016) 244 Cal.App.4th 267, 280-281.)
Plaintiff fails to produce evidence that
Casino failed to maintain minutes or adequate corporate records or that Casino
controlled the bank account of IDD. The only evidence before the court is the
May 2, 2022, Statement of Information showing that Casino was the sole officer
and director of IDD. (RJN Ex. 4.) However, the Certificate of Dissolution of
IDD filed on May 20, 2022, filed and signed by Cascino shows that Cascino
misrepresented that IDD has no known debts or liabilities at the time of the
dissolution. (RJN Ex. 5.) Cascino further admits that it was his decision alone
to dissolve IDD. (Casino Decl. ¶ 9.) Moreover, the fact that IDD was
undercapitalized may be inferred by the fact that Plaintiff’s judgment was not
paid.
iii. Inequitable Result
“[D]ifficulty
in enforcing a judgment or collecting a debt does not, by itself, constitute an
inequitable result for purposes of the alter ego doctrine.” (JPV I L.P. v.
Koetting (2023) 88 Cal.App.5th 172, 200.)
Plaintiff
asserts that an inequitable result would follow if there were no amendment
because IDD has been dissolved and all its assets that could have been used to
satisfy the judgment have been removed or otherwise dispersed by Cascino as
IDD’s sole officer and director. However, Plaintiff failed to produce evidence
that IDD was nothing but a shell for Casino, that Casino used IDD funds to pay
his personal debts or commingled funds, or that IDD was undercapitalized and
had no income to pay its debts. (See Butler America, LLC v. Aviation Assurance Company, LLC (2020) 55 Cal.App.5th 136, 146.)
In summary, Plaintiff’s evidence consists of the
following: 1) the Judgment of the Labor Commissioner, confirming that Cascino
appeared on behalf of IDD; and 2) two documents filed with the California
Secretary of State showing that in 2022 Cascino was the sole director and
shareholder of IDD and that he alone decided to dissolve IDD without satisfying
all of IDD’s liabilities. (RJN Ex. 1, 4, 5.) On reply, the Plaintiff seeks to
introduce further evidence, but the court will not consider it. “Points raised for the first time in a reply
brief will not be considered.” (Malmstrom v. Kaiser Aluminum &
Chemical Corp. (1986) 187 Cal.App.3d 299, 320.)
Given Plaintiff’s scant evidence, the court is not
persuaded that substantial evidence exists to show that Cascino is the
alter-ego of IDD.
C. Plaintiff
Has Not Shown that Lab. Code § 558.1 Permits Amending a Judgment
Lab. Code § 558.1 states in relevant part:
(a)
Any employer or other person acting on behalf of an employer, who violates, or
causes to be violated, any provision regulating minimum wages or hours and days
of work in any order of the Industrial Welfare Commission, or violates, or
causes to be violated, Sections 203, 226, 226.7, 1193.6, 1194, or 2802, may be
held liable as the employer for such violation.
(b)
For purposes of this section, the term “other person acting on behalf of an
employer” is limited to a natural person who is an owner, director, officer, or
managing agent of the employer, and the term “managing agent” has the same
meaning as in subdivision (b) of Section 3294 of the Civil Code.
(Lab. Code, § 558.1)
While Lab. Code § 558.1 allows a private
right action to hold individual employers liable, Plaintiff fails to point to
language in the statute or case law that would permit the court to amend the
judgment. (See Seviour-Iloff v. LaPaille (2022) 80
Cal.App.5th 427, 443 review granted October 26, 2022.)
Section 558.1 explicitly limits damages to
violations of “any Order of the Industrial Welfare Commission” and violations
of Lab. Code “Sections 203, 226, 226.7, 1193.6, 1194, or 2802[.]” The
$25,264.74 owed in commission earnings to Plaintiff and the interest of
$7,360.49 awarded to Plaintiff appear to be damages that fall outside of the
permitted violations of section 558.1 for which an individual employer can be
held liable for. Moreover, this court must find that substantial evidence exists
to support the finding that Casino “caused” the Labor Code violations within
the meaning of section 558.1. (See Espinoza v. Hepta Run, Inc.
(2022) 74 Cal.App.5th 44, 60 (Espinoza).)
Plaintiff fails to point out where in the
Order, Decision or Award of the Labor Commissioner the court may find that
Casino was personally involved in the purported violations or had sufficient
participation in the actions of the employer such that he could be held
responsible for the alleged wage and hour violations. (Usher v. White (2021) 64 Cal.App.5th 883, 896-897.) “We
agree generally with Usher and the federal cases it
cited that, in order to ‘cause’ a violation of the Labor Code, an individual
must have engaged in some affirmative action beyond his or her status as an
owner, officer or director of the corporation.” (Espinoza, supra,
74 Cal.App.5th at p. 59.)
Based on the above, the court finds that
section 558.1 does not permit the court to amend the Judgment.
Plaintiff’s Motion is denied.
Conclusion
Plaintiff’s Motion to Amend the Judgment is denied.
Plaintiff to give notice.