Judge Teresa A. Beaudet, Case 19STCV23961 2022-07-25 Tentative Ruling

Plaintiff Adrian Jonathan Gallegos (“Plaintiff”) filed this action on July 10, 2019 against Defendants Beverly Hills Cab Co., Inc., and United Independent Taxi Drivers, Inc. On September 3, 2019, Defendant Beverly Hills Transit Cooperative, Inc. (“BHC”), erroneously sued as Beverly Hills Cab Co., Inc., filed an answer to the Complaint. On July 19, 2019, Plaintiff filed an amendment to the Complaint naming L.A. Checker Cab Company, Inc. in place of “Doe 1,” and on July 22, 2020, dismissal was entered as to Defendant United Independent Taxi Drivers, Inc. On October 29, 2020, Plaintiff filed an amended amendment to the Complaint naming Joseph Mehrabi (“Mehrabi”) in place of “Doe 2.”

The operative First Amended Complaint (“FAC”) was filed on February 14, 2022 and asserts causes of action for (1) battery, (2) negligence, and (3) negligent hiring, supervision, and retention. The FAC names Seroj Gharibian (“Gharibian”) and Does 2 through 500 as additional defendants. In the FAC, Plaintiff alleges that he hired “John Doe’s” taxi service to take him to his home on or about May 17, 2019. (FAC, ¶¶ 12, 13.) Upon reaching his destination, Plaintiff exited the taxi (the “Subject Vehicle”) and proceeded to enter his apartment complex. (FAC, ¶ 13.) At this point in time, Defendant “John Doe” accelerated the Subject Vehicle directly at Plaintiff. (FAC, ¶ 13.) Defendant “John Doe” then exited the Subject Vehicle and began to pummel Plaintiff’s head and body with an unidentified metal object. (FAC, ¶ 13.) Due to this attack, Plaintiff suffered bodily injuries including but not limited to blindness to his left eye. (FAC, ¶ 14.) Plaintiff also suffered severe emotional distress from the driver trying to strike Plaintiff with the Subject Vehicle. (FAC, ¶ 14.)

BHC and Merhabi (jointly, “Defendants”) now demur to each of the causes of action of the FAC. Plaintiff opposes.

The Court grants Defendants’ request for judicial notice. The Court grants Plaintiff’s request for judicial notice.

As an initial matter, the Court does not find that any of the causes of action are ambiguous or unintelligible. Therefore, the special demurrer on the basis of uncertainty is overruled.

As to the remaining arguments, Defendants first contend that Plaintiff improperly seeks to impose personal liability for members of a cooperative corporation. Defendants note that BHC is listed as a “Cooperative Corporation” in its Certificate of Amendment of Articles of Incorporation filed in the office of the Secretary of State of the State of California. (Defendants’ RJN, Ex. A.) The “Cooperative Corporation Law” is set forth in Corporations Code section 12200, et seq. Defendants note that pursuant to Corporations Code section 12440, subdivision (a), “[a] member of a corporation is not, as such, personally liable for the debts, liabilities, or obligations of the corporation.” Defendants argue that “Plaintiff overreaches to impose personal liability against defendant Mehrabi and numerous others based upon the alleged role in [BHC]. As a cooperative corporation, however, there is limited liability of members such as Merhabi, and there is no authority that would support liability here.” (Demurrer at p. 2:18-21.)

Plaintiff counters that this argument does not have merit because “the whole point of alter ego liability is to circumvent the default for essentially all company structures – i.e., shielding individual shareholders, partners, members from personal liability – when holding otherwise would lead to injustice.” (Opp’n at p. 1:21-24.) Plaintiff cites to Automotriz del Golfo de California S. A. de C. v. v. Resnick (1957) 47 Cal.2d 792, 796, where the California Supreme Court noted that “[i]t is the general rule that the conditions under which a corporate entity may be disregarded vary according to the circumstances in each case. It has been stated that the two requirements for application of this doctrine are (1) that there be such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist and (2) that, if the acts are treated as those of the corporation alone, an inequitable result will follow.” (Internal citations omitted.)
Defendants contend that Plaintiff fails to state facts sufficient to support his “alter ego” allegations, and that such allegations are conclusory. As Plaintiff notes, he alleges that:

“Defendant MEMBERS[1] and Defendant BEVERLY HILLS CAB: (1) controlled the business and affairs of BEVERY HILLS CAB; (2) commingled the funds and assets of the company, and diverted company funds and assets; (3) disregarded legal formalities; (4) inadequately capitalized BEVERY HILLS CAB; (4) used the company as a mere shell, instrumentality or conduit for the MEMBERS to avoid liability; (5) manipulated the assets and liabilities between Defendant MEMBERS and BEVERY HILLS CAB so as to concentrate the assets in one and the liabilities in another; (6) used the company entity to conceal its ownership, management and financial interests and/or personal business activities; and/or (7) used the company entity to shield against personal obligations.” (FAC, ¶ 17.)

“BEVERLY HIILS CAB was not only influenced and governed by Defendant MEMBERS, but there was such a unity of interest and ownership that the individuality, or separateness, of Defendant MEMBERS and Defendant BEVERLY HILLS CAB has ceased, and that the facts are such that an adherence to the fiction of the separate existence of these entities would, under the particular circumstances, sanction a fraud or promote injustice. Indeed, Defendant MEMBERS set up BEVERLY HILLS CAB in such a sham fashion that if Plaintiff proved his allegations against Defendant BEVERLY HILLS CAB, without alter ego liability and piercing the corporate veil being found, Plaintiff would essentially recover nothing in this action against Defendant BEVERLY HILLS CAB.” (FAC, ¶ 18.)

Plaintiff also alleges that “BEVERLY HILLS CAB in itself owns no assets at all and does not even have insurance to reasonably cover claims such as the one at present. Accordingly, not only is BEVERLY HILLS CAB under capitalized, it is not capitalized at all. Indeed, the only assets BEVERLY HILLS CAB possesses is its MEMBERS vehicles, its ‘name,’ and certain cab equipment.” (FAC, ¶ 15.)

Plaintiff cites to Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 236, where the Court of Appeal “affirm[ed] the trial court’s ruling that [plaintiff] sufficiently pled an alter ego theory of liability.” Similar to Plaintiff here, the plaintiff in Rutherford alleged that defendant Shereen Caswell (Caswell) “dominated and controlled” defendant Plaza Del Rey (PDR); “that a unity of interest and ownership existed between Caswell and PDR; that PDR was a mere shell and conduit for Caswell’s affairs; that PDR was inadequately capitalized; that PDR failed to abide by the formalities of corporate existence; that Caswell used PDR assets as her own; and that recognizing the separate existence of PDR would promote injustice.” (Id. at p. 235.) The Court of Appeal noted that “Defendants argue that [plaintiff] failed to allege specific facts to support an alter ego theory, but [plaintiff] was required to allege only ultimate rather than evidentiary facts. Moreover, the less particularity [of pleading] is required where the defendant may be assumed to possess knowledge of the facts at least equal, if not superior, to that possessed by the plaintiff, which certainly is the case here.” (Id. at p. 236 [internal quotations and citations omitted].)

Based on the foregoing, the Court finds that Plaintiff has sufficiently pled an alter ego theory of liability.

Lastly, Defendants argue that the FAC does not relate back to the original Complaint. Pursuant to Code of Civil Procedure section 474, “[w]hen the plaintiff is ignorant of the name of a defendant, he must state that fact in the complaint…and such defendant may be designated in any pleading or proceeding by any name, and when his true name is discovered, the pleading or proceeding must be amended accordingly…”

“The general rule is that an amended complaint that adds a new defendant does not relate back to the date of filing the original complaint and the statute of limitations is applied as of the date the amended complaint is filed, not the date the original complaint is filed. A recognized exception to the general rule is the substitution under section 474 of a new defendant for a fictitious Doe defendant named in the original complaint as to whom a cause of action was stated in the original complaint. If the requirements of section 474 are satisfied, the amended complaint substituting a new defendant for a fictitious Doe defendant filed after the statute of limitations has expired is deemed filed as of the date the original complaint was filed. Among the requirements for application of the section 474 relation back doctrine is that the new defendant in an amended complaint be substituted for an existing fictitious Doe defendant named in the original complaint.” (Woo v. Superior Court (1999) 75 Cal.App.4th 169, 176 [internal citations omitted].)

Defendants assert that Plaintiff improperly amended the original Complaint to name

additional Doe Defendants and two individual defendants. The original Complaint names Beverly Hills Cab Co., Inc.; United Independent Taxi Drivers, Inc.; Doe 1, an Individual Taxi Driver; and Does 2 through 50 as defendants. The FAC names Beverly Hills Cab Co., Inc.; Mehrabi; Gharibian; Doe 1, an Individual Taxi Driver; and Does 2 through 500 as defendants.

As to Mehrabi, Defendants argue that Plaintiff excluded him “from any Doe designation, which is wholly inconsistent with the original pleading.”(Demurrer at p. 5:20-21.) But as set forth above, on October 29, 2020, Plaintiff filed an amendment to the Complaint naming Mehrabi in place of “Doe 2.”

Defendants also assert that Plaintiff improperly amends the original Complaint to incorporate previously unpled theories. As noted in Austin v. Massachusetts Bonding & Ins. Co. (1961) 56 Cal.2d 596, 600, cited by Defendants, “[t]he modern rule with respect to actions involving parties designated by their true names in the original complaint is that, where an amendment is sought after the statute of limitations has run, the amended complaint will be deemed filed as of the date of the original complaint provided recovery is sought in both pleadings on the same general set of facts. This rule is the result of a development which, in furtherance of the policy that cases should be decided on their merits, gradually broadened the right of a party to amend a pleading without incurring the bar of the statute of limitations.” (Internal citations omitted.) “The rule which makes relation back of an amendment dependent upon whether recovery is sought on the same general set of facts as those alleged in the original complaint is in accordance with the basic principle of code pleading that a litigant need only allege the facts warranting recovery.” (Id. at p. 601.)

Defendants assert that “Plaintiff does not identify new facts, only a new theory in an effort to expand the scope of his claim to include the individual cab owners, like Mehrabi, who had nothing to do with the subject incident, or even the management or control of the BH Cab.” (Demurrer at p. 6:9-11.) But this argument appears to acknowledge that the FAC is based on the same general set of facts as the original Complaint. As Plaintiff notes, the FAC and the original Complaint both concern the alleged assault against Plaintiff by the cab driver.

Defendants also assert that in the original Complaint, “there was never any suggestion that anyone would be vicariously liable on any theory for the alleged intentional attack on plaintiff.” (Demurrer at p. 5:15-16.) But Plaintiff alleges in the original Complaint that BHC and Does 2 through 50 are “vicariously liable for the negligent and reckless acts and/or omissions of Defendant JOHN DOE.” (Compl., ¶ 6.) Defendants also contend that “[t]here was no cause of action stated against any Doe [other than a single Doe alleged to be the attacker, not at issue here].” (Demurrer at p. 5:18-19.) This is inaccurate, as the first and second causes of action in the original Complaint were alleged against all defendants, and the third cause of action of the original Complaint was alleged against all of the defendants except for Doe 1.

The Court orders Defendants Plaintiff to file and serve an answer to the FAC within 10 days of the date of this Order.

[1]Plaintiff alleges that “MEMBERS are defined by BEVERLY HILLS CAB as individuals who own a BEVERLY HILLS cab and drive the cab for profit and/or lease the cab for a profit.” (FAC, ¶ 15.)

Superior Court of California

County of Los Angeles

Department 50