Judge: Thomas D. Long, Case: 20STCV04416, Date: 2023-06-20 Tentative Ruling

Case Number: 20STCV04416    Hearing Date: December 12, 2023    Dept: 48

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

On March 17, 2022, the Court granted a motion to enforce the settlement between Plaintiff Rafael Rodriguez Maldonado and Defendants Nina’s Cafe, Inc. and Libasky Johanina Gutierrez-Tobar.  On April 1, 2022, the Court entered judgment in favor of Plaintiff and against Defendants, jointly and severally, in the amount of $54,500.00 plus $1,685.00 in attorney fees and costs.

On June 20, 2023, the Court denied Plaintiff’s motion to amend the judgment, finding that Plaintiff had not proven that there would be an inequitable result if Nina’s Cafe Bar, Inc. was not added as a judgment debtor.

On November 14, 2023, Plaintiff filed a new motion to amend the judgment to add Nina’s Cafe Bar, Inc. as a judgment debtor.  No oppositions were filed.

DISCUSSION

Code of Civil Procedure section 187 grants courts the authority to amend a judgment to add an alter ego of an original judgment debtor, thereby making the additional judgment debtor liable on the judgment.  (Highland Springs Conference & Training Center v. City of Banning¿(2016) 244 Cal.App.4th 267, 280.)  Alter ego need not be alleged or proven in the underlying lawsuit.  (Misik v. D’Arco (2011) 197 Cal.App.4th 1065, 1074-1075.)  To add an alter ego judgment debtor, the judgment creditor must show, by a preponderance of the evidence, “(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.”  (Relentless Air Racing, LLC v. Airborne Turbine Ltd. Partnership (2013) 222 Cal.App.4th 811, 815-816.)  “Alter ego is an extreme remedy, sparingly used.”  (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 539 (Sonora Diamond).)

A.        Nina’s Cafe Bar, Inc. Had Control of This Litigation and Was Virtually Represented in These Proceedings.

The Complaint alleged that Plaintiff was employed by Nina’s Cafe, Inc. at 2805 E. Gage Avenue, Huntington Park, California 90255, and Libasky Johanina Gutierrez-Tobar was the owner and operator of that business.

Plaintiff provides a copy of Nina’s Cafe, Inc.’s January 5, 2022 Statement of Information, obtained from the Secretary of State’s website, which lists a principal office address of 2805 E. Gage Avenue, Huntington Park, California 90255 and a mailing address of 1465 Sunkist Avenue, La Puente, California, 91764.  (Alavi Decl. ¶ 4 & Ex. B.)   Libasky Johanina Gutierrez-Tobar is the CEO, Secretary, CFO, and sole Director.

Plaintiff also provides a copy of Nina’s Cafe Bar, Inc.’s January 5, 2022 Statement of Information, obtained from the Secretary of State’s website.  (Alavi Decl. ¶ 5 & Ex. C.)  The principal office address is 6626 Atlantic Boulevard, Bell, California, 90201.  The mailing address is also 1465 Sunkist Avenue, La Puente, California, 91764, and Libasky Johanina Gutierrez-Tobar is also the CEO, Secretary, CFO, and sole Director.

The Court finds by a preponderance of evidence that Nina’s Cafe Bar, Inc. had control of the underlying litigation and was virtually represented in these proceedings through Defendant Libasky Johanina Gutierrez-Tobar.

B.        Nina’s Cafe Bar, Inc. Shares Unity of Interest and Ownership With Defendants.

Courts consider many factors when determining whether there is a sufficient unity of interest and ownership, including commingling of funds and assets, identical equitable ownership, use of the same offices and employees, disregard of corporate formalities, identical directors and officers, use of one entity as a mere shell or conduit for the affairs of the other, and inadequate capitalization of the original judgment debtor.  (Highland Springs Conference & Training Center v. City of Banning (2016) 244 Cal.App.4th 267, 280-281.)  “No single factor governs; courts must consider all of the circumstances of the case in determining whether it would be equitable to impose alter ego liability.”  (Id. at p. 281.)

Two Fictitious Business Name Statements indicate that Nina’s Cafe Bar, Inc. is doing business as “Nina’s Cafe” and “Nina’s Cafe Bar” at both 6626 Atlantic Boulevard and 2805 E. Gage Avenue.  (Alavi Decl. ¶¶ 6-7 & Exs. D-E.)  The 2805 E. Gage Avenue address is where Plaintiff worked for Nina’s Cafe, Inc.  Libasky Johanina Gutierrez-Tobar is the CEO, Secretary, CFO, and sole Director of both Nina’s Cafe, Inc. and Nina’s Cafe Bar, Inc.

Accordingly, the Court finds by a preponderance of evidence that there is sufficient unity of interest and ownership between Defendants and Nina’s Cafe Bar, Inc.

C.        Plaintiff Has Shown That There Will Be an Inequitable Result.

Difficulty in enforcing a judgment or collecting a debt is not enough to establish an inequitable result.  (Sonora Diamond, supra, 83 Cal.App.4th at p. 539.)  However, when there is a sole judgment debtor and it is highly unlikely the debtor will ever have assets to satisfy the judgment, it may be inequitable to preclude collection when the debtor and its alter ego are one and the same.  (Triyar Hospitality Management, LLC v. WSI (II) - HWP, LLC (2020) 57 Cal.App.5th 636, 643 (Triyar).)

Libasky Johanina Gutierrez-Tobar appeared in her capacity as a representative of Nina’s Cafe, Inc. for a May 22, 2023 judgment debtor examination.  (Alavi Decl. ¶ 12.)  She testified that two of Nina’s Cafe, Inc.’s three bank accounts are closed, and the open account contains only $40.00.  (Alavi Decl. ¶ 12.)  Nina’s Cafe, Inc. also has over $200,000.00 in debt.  (Alavi Decl. ¶ 13.)

Gutierrez-Tobar appeared in her individual capacity for an October 13, 2023 judgment debtor examination.  (Alavi Decl. ¶ 16 & Ex. I.)  She testified that she owns a single-family home that is worth “$750,000 maybe.”  (Alavi Decl., Ex. I at p. 14.)  She owns “[l]ess than $10,000” of jewelry and an investment account worth $1,100.  (Id. at pp. 17, 20.)  She distributes $5,000 to $6,000 to herself as monthly income from Nina's Cafe Bar, Inc.  (Id. at p. 37.)  She is current on her $400 biweekly personal loan payments and $2,677 monthly mortgage payments.  (Id. at pp. 25-26, 49.)  Gutierrez-Tobar also owns three or four cars including a 2021 Lexus LX570, 2020 Jeep Gladiator, and 2018 Mercedes E class, with financing of $69,000, $34,000, and $50,000 outstanding.  (Id. at pp. 15-16.)  She is current on her monthly car payments of $998, $1,700, and $1,286.  (Id. at p. 25.)  The Mercedes “is going to be returned or what is that term confiscated more than likely,” saving her almost $1,300 each month.  (Id. at p. 58.)

Despite making the above payments, Gutierrez-Tobar’s tax returns show losses for each of the last three years: $170,911.00 in 2019; $201,075.00 in 2020; and $184,190.00 in 2021.  (Alavi Decl., Ex. J.)

The Court finds that it is highly unlikely that Nina’s Cafe, Inc. and Libasky Johanina Gutierrez-Tobar will have assets to satisfy the judgment, and it would be inequitable to preclude collection from an alter ego.  (See Triyar, supra, 57 Cal.App.5th at p. 643.)

CONCLUSION

The motion is GRANTED.  The April 1, 2022 judgment is ordered to be amended to name Nina’s Cafe Bar, Inc. as a judgment debtor, jointly and severally.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit.  If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar.

         Dated this 12th day of December 2023