Judge Kerry Bensinger, Case Number: 17STLC03903, Date: 2024-02-27 Tentative Ruling

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In December 2015, Plaintiff, Michael Quillen, purchased a 2009 Cadillac Escalade from Car City, Inc. (“Car City”). Later, Plaintiff found the vehicle unsafe to drive and sued Car City, American Contractors Indemnity Company (Car City’s bond company), and Chase Bank Finance. On March 16, 2021, trial was held and taken under submission. On July 1, 2021, the court entered judgment in favor of Plaintiff and against Car City and Chase Bank Finance. No judgment was entered against American Contractors Indemnity Company. Car City appealed. On June 5, 2023, the Court of Appeal reversed the judgment against Car City. Chase Bank Finance was not a party to the appeal. As such, no change was made to the judgment against Chase Bank Finance.

Plaintiff has been unsuccessful in collecting the judgment against Chase Bank Finance and now seeks to levy the business of JP Morgan Chase Bank, N.A. To that end, on December 21, 2023, Plaintiff filed this motion to amend the judgment to include JP Morgan Chase Bank, N.A. and JP Morgan Chase Bank National Association as the alter egos of judgment debtor Chase Bank Finance.

“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.)

“ ‘Code of Civil Procedure section 187 authorizes a trial court to amend a judgment to add judgment debtors.’ [Citation.] The court may exercise its authority to impose liability upon an alter ego who had control of the litigation, and was therefore represented in it. [Citation.] The addition of a new party as judgment debtor stems from the concept of the alter ego doctrine, which is that an identity exists between the new party and the original party, whose participation in the trial leading to the judgment represented the newly added party. [Citation.] Therefore amending a judgment to add an alter ego does not add a new defendant but instead inserts the correct name of the real defendant. [Citations.] In order to see that justice is done, great liberality is encouraged in the allowance of amendments brought pursuant to Code of Civil Procedure section 187. [Citation.]” (Misik v. D’Arco (2011) 197 Cal.App.4th 1065, 1072-73, footnote omitted.)

However, while great liberality is encouraged to allow amendments brought pursuant to Code of Civil procedure section 187, courts are more discerning in applying the alter ego doctrine in this context. Alter ego is “an extreme remedy, sparingly used.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 539 (Sonora Diamond).) Courts invoke the doctrine only in “narrowly defined circumstances” where “one corporation uses another to perpetrate fraud, circumvent a statute, or accomplish some other wrongful or inequitable purpose.” (Gopal v. Kaiser Foundation Health Plan, Inc. (2016) 248 Cal.App.4th 425, 431.) Establishing liability based on an alter ego theory—to the extent such a theory is even cognizable—requires that the plaintiff demonstrate two essential elements: (1) “a unity of interest and ownership ... [such] that the separate personalities of the corporation and the [individual] do not in reality exist,” and (2) “an inequitable result if the acts in question are treated as those of the corporation alone.” (Sonora Diamond, supra, 83 Cal.App.4th at pp. 538-39.) Without evidence of these elements, “the alter ego doctrine cannot be invoked.” (Id. at p. 539.)

“‘Among the factors to be considered in applying the doctrine are commingling of funds and other assets of the two entities, the holding out by one entity that it is liable for the debts of the other, identical equitable ownership in the two entities, use of the same offices and employees, and use of one as a mere shell or conduit for the affairs of the other.’ Other factors which have been described in the case law include inadequate capitalization, disregard of corporate formalities, lack of segregation of corporate records, and identical directors and officers. No one characteristic governs, but the courts must look at all the circumstances to determine whether the doctrine should be applied. Alter ego is an extreme remedy, sparingly used.” (Id. at pp. 538-39.)

Plaintiff is not entitled to an order amending the judgment. First, Plaintiff argues that “all three parties are exactly the same.” (Motion, p. 5:1.) But it is unclear to whom Plaintiff refers. The only party against whom Plaintiff possesses a judgment is Chase Bank Finance. Out of the blue, Plaintiff refers to a “Chase Auto Finance Corp.” and contends this entity “merged with the survivor being JP Morgan Chase Bank National Association.” (Motion, p. 5:2-3.) Plaintiff appears to refer to Chase Bank Finance and Chase Auto Finance interchangeably. Whatever the case, Plaintiff does not provide any evidence to show that JP Morgan Chase Bank National Association is the alter ego of Chase Bank Finance. Indeed, none of the documents Plaintiff submits bears the name of Chase Bank Finance.

Moreover, Plaintiff does not submit a declaration discussing any of the factors to be considered in applying the alter ego doctrine. (See Sonora Diamond, supra, 83 Cal.App.4th at pp. 538-539.) There is no competent evidence presented that would allow this court to apply the “extreme remedy” of the alter ego doctrine. (Id. at p. 539.) Plaintiff does not meet his burden.

Based on the foregoing, Plaintiff’s motion to amend the judgment is denied without prejudice.

Kerry Bensinger

Judge of the Superior Court

[1] Defendants submit objections to the declarations of Michael Quillen and Michael Geller. The objections are not material to the court’s disposition of this motion and therefore declines to rule on Defendants’ objections.