Judge: Mark E. Windham, Case: 22STLC08601, Date: 2023-10-19 Tentative Ruling

Case Number: 22STLC08601    Hearing Date: December 14, 2023    Dept: 26

McLellan Estate Co. v. Navpeak, Inc., et al.

MOTION TO AMEND JUDGMENT

(CCP § 187)

TENTATIVE RULING:

Judgment Creditor McLellan Estate Company’s Motion to Amend Judgment is GRANTED. JUDGMENT CREDITOR IS TO FILE A PROPOSED AMENDED JUDGMENT WITHIN 20 DAYS OF THIS ORDER.

ANALYSIS:

On December 27, 2022, Plaintiff McLellan Estate Company (“Judgment Creditor”) filed the instant action against Defendants Navpeak, Inc. dba Stunner California (“Judgment Debtor Navpeak”) and Sebastian Schildhorn (“Judgment Debtor Schildhorn”). Default judgment was entered against Judgment Debtors on February 27, 2023.

On July 26, 2023, Judgment Creditor filed the instant Motion to Amend Judgment. The Motion came for hearing on October 19, 2023 at which time Judgment Creditor appeared and requested a continuance. (Minute Order, 10/19/23.) The hearing was continued to November 8, 2023 and Judgment Creditor filed a supplemental declaration on October 26, 2023. (Ibid.) On November 8, 2023, the hearing was continued due to the Cout’s unavailability to November 16, 2023. (Minute Order, 11/08/23.) On November 16, 2023, the hearing was continued to December 14, 2023; Plaintiff filed a notice of continuance on the same date. (Minute Order, 11/16/23; Notice of Motion, filed 11/16/23.)

Discussion

Judgment Creditor moves pursuant to Code of Civil Procedure section 187 to add “Kenpashi Zee, Inc.” as an additional judgment debtor.

“Under section 187, the trial court is authorized to amend a judgment to add additional judgment debtors.... 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 [citing Hall, Goodhue, Haisley & Barker, Inc. v. Marconi Conf. Center Bd. (1996) 41 Cal.App.4th 1551, 1554-1555].) Alter ego liability exists when there is such “unity of interest” and ownership that the individuality or separateness of the corporation has ceased to exist (or never existed in the first place). (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 300.) Also, “the facts of the case must be such that adherence to the “fiction” of the corporation's “separate existence” would sanction a fraud or promote injustice.” (Ibid.)

Judgment Creditor moves on the grounds that Kenpashi Zeee, Inc. is Judgment Debtor Schildhorn’s alter ego. Judgment Creditor presents evidence that Judgment Debtor Schildhorn is Kenpashi Zee, Inc.’s sole officer and director as of November 2021. (Motion, Makino Decl., ¶3 and Exh. A.) Kenpashi Zee has not maintained corporate formalities by failing to provide updated information to the California Secretary of State since 2020. (Id. at ¶4 and Exh. B.) It only filed a statement of information on November 5, 2021 after being placed in delinquent status; thereafter it fell out of compliance by not filing a statement of information due on May 31, 2022. (Ibid.) Judgment Debtor Schildhorn also treated Kenpashi Zee, Inc. as his alter ego by transferring the real property 16440 Atherton Mountain, #36, Fountain Valley, California to Kenpashi Zee, Inc. for no money. (Id. at ¶5 and Exh. C.) On June 28, 2023, Judgment Creditor’s counsel sent a letter to Judgment Debtor Schildhorn asking for evidence that Kenpashi Zee, Inc. is a separate legal entity. (Id. at ¶6 and Exh. D.) To date, Judgment Debtor Schildhorn has made no response. (Id. at ¶7.) This evidence demonstrates a unity of interest between Kenpashi Zee, Inc. and Judgment Debtor Schildhorn.

Following entry of default judgment, Judgment Creditor conducted asset searches for Judgment Debtors on its own and through investigation firms. (Motion, Supp. Makino Decl., ¶¶4-6.) A bank levy upon Judgment Debtor Schildhorn’s bank account showed it contained no funds. The only attachable property of either Judgment Debtor is the Atherton Mountain property, which has been transferred to Kenpashi Zee, Inc. Therefore, Judgment Creditor has shown that it has been unable to collect on the judgment against Judgment Debtors such that injustice would result if the alter ego doctrine is not invoked. (See Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 539.)

Conclusion

Judgment Creditor McLellan Estate Company’s Motion to Amend Judgment is GRANTED. JUDGMENT CREDITOR IS TO FILE A PROPOSED AMENDED JUDGMENT WITHIN 20 DAYS OF THIS ORDER.

Moving party to give notice.