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 Post subject: Alter Ego Arguments Flops on CCP 187 Motion to Amend
PostPosted: Sat Jan 29, 2011 11:49 pm 
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Auto Auction Group, Inc. v. Ritz Leasing, Inc., 2011 WL 227927 (Cal.App. 2nd Dist., Unpublished, Jan. 26, 2011)

Not Officially Published (Cal. Rules of Court, Rules 8.1105 and 8.1110, 8.1115)

California Rules of Court, rule 8.1115, restricts citation of unpublished opinions in California courts.

Court of Appeal, Second District, Division 3, California.

AUTO AUCTION GROUP, INC., et al., Plaintiffs and Respondents,

v.

RITZ LEASING, INC., et al., Defendants and Appellants.

No. B216247.

Los Angeles County Super. Ct. No. BC324712.

Jan. 26, 2011.

APPEAL from a postjudgment order of the Superior Court of Los Angeles County, John P. Shook, Judge. Affirmed.

Schuler, Brown & Ekizian, Jack M. Schuler and Sam D. Ekizian for Defendants and Appellants.

Law Office of Michael R. Sohigian and Michael R. Sohigian for Plaintiffs and Respondents CA Auto Mart Group, Inc. and Onnik Mehrabian.

KLEIN, P.J.

*1 Edik Oganesyan, Razmik Oganesyan, Ritz Leasing, Inc. and The Lippey Company appeal an order denying a motion to amend a judgment to add Onnik Mehrabian and/or California Auto Mart, Inc. dba Glendale Kia as judgment debtors. They also seek to appeal an order awarding $81,028.99 in attorney fees and costs in favor of Onnik Mehrabian and California Auto Mart, Inc. dba Glendale Kia.

With respect to the motion to amend the judgment, we conclude substantial evidence supports the trial court’s denial of the motion and we affirm it on that basis. With respect to the order awarding attorney fees, this issue was litigated after appellants filed a notice of appeal from the order denying the motion to amend the judgment and they failed separately to appeal the attorney fees order. We therefore lack jurisdiction to review the order awarding attorney fees.

FACTS AND PROCEDURAL BACKGROUND

1. Overview.FN1

FN1. We have taken judicial notice of the record on appeal in B193602 which affirmed the underlying judgment.

Commencing in 2002, Auto Auction Group, a corporation owned by Onnik Mehrabian, operated a used car dealership at 1803 San Fernando Road on property it subleased from Edik Oganesyan and Razmik Oganesyan (the Oganesyan brothers). Mehrabian, the majority shareholder and owner of California Auto Mart, Inc., dba Glendale Kia, also used the property to store new cars sold by Glendale Kia.

Auto Auction Group had an option to renew the sublease which had to be exercised by July 31, 2004. Before that date, the Oganesyan brothers offered to sell Mehrabian the master lease for $100,000. Mehrabian countered at $75,000 and claimed he had a handshake deal to purchase the master lease for $85,000. Mehrabian did not exercise the option to renew the sublease, assertedly because he believed he had a deal to purchase the master lease. The Oganesyan brothers denied they ever entered into an agreement to sell Mehrabian the master lease. After Mehrabian failed to exercise the option, the Oganesyan brothers sold the master lease to Mehrabian’s competitor, Max Malayeri dba Ritz Leasing, Inc., for $120,000.

Auto Auction Group sued the Oganesyan brothers, Ritz Leasing and the owner of the property, The Lippey Company, for breach of contract, specific performance of the handshake deal to purchase the master lease, fraud, conspiracy, equitable estoppel and various other causes of action.

2. Relevant trial proceedings.

During Mehrabian’s testimony at the jury trial of the underlying lawsuit before Hon. William F. Fahey, the defendants objected to allowing the plaintiff, Auto Auction Group, to prove its damages based on expenses paid by Glendale Kia. The defendants’ counsel noted Auto Auction Group and Glendale Kia were different corporations and argued evidence of expenses paid by Glendale Kia should be excluded from evidence.

Auto Auction Group’s counsel responded “the testimony has been and will be that ... all the money for Auto Auction Group runs through Glendale Kia’s checking account.” Auto Auction Group’s counsel asserted the entities kept separate books but claimed “they deal with their day-to-day operations together....”

*2 The trial court noted the plaintiff was Auto Auction Group and, even if Glendale Kia was “used as some sort of a conduit for funds,” it was not a party to the litigation. The trial court stated it intended to sustain the objection unless Auto Auction Group’s counsel could explain how Auto Auction Group might claim damages based on expenses paid by Glendale Kia.

After the luncheon recess, counsel for Auto Auction Group advised the trial court the accountant for Auto Auction Group and California Auto Mart had indicated that in the year 2000 Auto Auction Group loaned California Auto Mart approximately $2 million to start the Kia franchise. Rather than repaying the loan directly, Glendale Kia paid Auto Auction Group’s expenses and received a credit against the loan. The accountant indicated the entities are related parties, they file consolidated reports and each maintains a line item for the loan. Thus, although Glendale Kia may have paid Auto Auction Group’s expenses, it was Auto Auction Group that sustained the damage.

The trial court inquired whether this information was included in “the evidence in the exhibit books....” Auto Auction Group’s counsel responded it was not because this issue had been raised during trial. However, Mehrabian could testify to these facts and the accountant could be produced to explain the situation.

The defendants’ counsel objected on the ground the evidence had not been disclosed during discovery even though Mehrabian had been asked to produce all evidence of damages sustained by Auto Auction Group. Mehrabian produced only Glendale Kia checks even though Auto Auction Group maintained a separate checking account and the defendants previously had received checks from Auto Auction Group.

The trial court indicated it intended to sustain the objection unless Auto Auction Group persuaded the trial court “there is this integral relationship between the two parties by way of financial documents, but right now we don’t have the documents, and we have a proffer from a person who, apparently, has not been previously disclosed.” Later that day, the trial court found the notice to produce served on Mehrabian properly requested all evidence of Auto Auction Group’s damages and it would sustain objections to “any hearsay testimony by the plaintiff or anybody else about these documents that have not been properly produced.”

The following day, Auto Auction Group’s counsel again raised the issue of whether Mehrabian would be permitted to explain “how these bills [were] paid....” The trial court stated counsel had “misapprehended” it’s ruling and indicated Mehrabian would be permitted to refer to any document that had been produced in discovery. The trial court stated, “I have not precluded you from going into Glendale Kia. Indeed, a number of witnesses as recently as today, I think, have testified about the fact that they work for one or both entities and some interrelationship [exists] between and among them. [The ruling] really had to do with documents.”

*3 Mehrabian thereafter testified, over defense objection, that Auto Auction Group paid approximately $565,000 in additional rent for replacement lots and improvements that were necessary for those lots because Auto Auction Group could not stay at the subleased property. Mehrabian also testified Auto Auction Group had incurred each of the expenses evidenced by the documents in exhibit No. 78 as a result of losing the sublease. On cross-examination, Mehrabian admitted each of the expenses, which totaled approximately $2 million, had been paid by Glendale Kia. Mehrabian further admitted that new office space constructed to replace the offices of Auto Auction Group also housed Glendale Kia personnel and that some employees worked for both corporations.

3. Defense verdict and entry of judgment in favor of defendants.

The jury rejected Auto Auction Group’s claims of fraud and breach of contract and the trial court ruled in the defendants’ favor on Auto Auction Group’s equitable claims. Thereafter, the trial court awarded the defendants attorney fees under Civil Code section 1717 in the amount of $377,917 based on the attorney fees clause in the sublease and costs in the amount of $30,482.

On May 20, 2008, this court affirmed the judgment.

4. The first motion to amend the judgment.

a. The motion.

On August 4, 2008, the defendants filed an ex parte application to add Mehrabian and/or California Auto Mart, Inc. dba Glendale Kia as alter ego judgment debtors. The motion asserted Mehrabian had controlled the litigation, he owned Auto Auction Group and Glendale Kia, he was present during the entire trial and he actively participated in all aspects of the litigation. The motion further asserted the trial court had allowed Auto Auction Group to prove its damages based on Glendale Kia checks because Mehrabian represented that Auto Auction Group and Glendale Kia were interwoven and their finances and day-to-day operations were combined. The defendants referred to a right of entry permit from the City of Glendale introduced into evidence at trial which Mehrabian signed as President and CEO of Auto Auction Group, Inc., dba Glendale Kia. The defendants also pointed out that Mehrabian admitted at trial that all the cars on the Auto Auction Group lot bore Glendale Kia license plate holders.

The trial court declined to rule on the motion ex parte and set the matter for a hearing. The defendants filed a noticed motion for that date.

b. Ritz Leasing, Inc. assigns its interest in the judgment.

On August 20, 2008, an Acknowledgment of Assignment was filed on pleading paper bearing the name, State Bar number, firm name, address and telephone number of the defendants’ counsel as attorney for judgment creditor Ritz Leasing, Inc. The Acknowledgment of Assignment bore the notarized signature of Max Malayeri, the President of Ritz Leasing, Inc. The assignment indicated each of the judgment creditors had assigned their rights in the judgment to Ritz Leasing and Ritz Leasing, in turn, had assigned its rights to two individuals.

c. California Auto Mart files an affidavit of prejudice.

*4 On September 17, 2008, California Auto Mart filed an affidavit of prejudice under Code of Civil Procedure section 170.6 against Judge Fahey.

d. Opposition to the motion to amend the judgment.

Mehrabian and California Auto Mart filed opposition to the motion to amend the judgment. Declarations in support of the opposition indicated Auto Auction Group and California Auto Mart are separately incorporated, each corporation was in good standing and each held a seller’s permit issued by the Board of Equalization. The two corporations file separate income tax returns and keep separate financial records. Further, Auto Auction Group holds a vehicle dealer license (USED) and a vehicle dismantler license issued by the DMV whereas Glendale Kia holds a vehicle dealer license (NEW). Each corporation holds a separate inventory of cars for sale and Kia Motors of America has regular oversight of California Auto Mart’s inventory.

e. The trial court orders the affidavit of prejudice stricken as untimely.

On October 3, 2008, Judge Fahey ordered the affidavit of prejudice previously filed by California Auto Mart stricken, noting the matter had been pending before him for almost four years. Thus, the affidavit was not timely.

f. The hearing on the motion.

At the hearing on the motion, the trial court indicated it was inclined to deny the motion as to Mehrabian finding an insufficient showing of an alter ego relationship between Mehrabian and Auto Auction Group. However, the trial court was inclined to grant the motion as to California Auto Mart because the trial evidence “clearly demonstrated that there really is no proper separation between Auto Auction and Cal Auto Mart doing business as Glendale Kia. The testimony, including by the key trial witnesses, indicated that there was a commingling of assets, no checks were ever issued from Auto Auction, indeed all payments made on behalf of vendors, et cetera, were made by Glendale Kia or Cal Auto Mart. No evidence that corporate formalities were followed by Auto Auction. Office space and employees were shared[and there was n]o evidence of separate finances. [¶] I think there was not the requisite corporate formalities, and I think it would be unfair, from an equitable stand point to allow, in effect, the alter ego of Auto Auction to not be added as a judgment debtor....”

Counsel for California Auto Mart argued the evidence of damages paid by Glendale Kia had been admitted at trial because Auto Auction Group’s counsel represented that Glendale Kia paid the expenses in lieu of repaying a loan. The trial court agreed such a proffer had been made but noted no evidence of the loan was ever produced. After further discussion, the trial court stated the record shows “one corporate entity was paying the bills for a different corporate entity. That is the only fair reading of the evidence at trial.”

g. The trial court’s ruling.

In a written order, Judge Fahey denied the motion to amend the judgment to add Mehrabian as a judgment debtor but granted it as to California Auto Mart, finding a unity of interest and ownership, commingling of finances, physical locations and employees, and control of the litigation by Mehrabian, the admitted owner of both entities. Judge Fahey found: “It would not be fair to allow [Mehrabian] to rely on [Auto Auction Group] with minimal assets to bring a meritless lawsuit and later claim that his much more successful corporation [California Auto Mart dba Glendale Kia] is insulated from a $400,000 plus judgment.” Judge Fahey concluded: “Defendants are entitled to pierce the illusion of ‘separate corporations’ so that they may be made whole after years of scorched-earth litigation.”

*5 Judge Fahey thereafter signed an amended judgment which added California Auto Mart, Inc. dba Glendale Kia as a judgment debtor.

5. The amended judgment is vacated.

California Auto Mart subsequently filed a petition for writ of mandate in this court claiming Judge Fahey lacked jurisdiction to consider the motion to amend the judgment because he properly had been disqualified by California Auto Mart’s affidavit of prejudice under Code of Civil Procedure section 170.6.

On November 18, 2008, this Court notified the parties it was considering issuance of a peremptory writ of mandate in the first instance. The order noted the affidavit of prejudice was timely because California Auto Mart had not previously appeared in the action and the motion to amend the judgment presented a question of fact that had not previously been litigated.

In response to this notice, the trial court vacated its order striking the affidavit of prejudice and entered a new order granting the challenge. The parties thereafter stipulated to an order vacating the amended judgment.

6. The second motion to amend the judgment.

a. The second motion and the opposition thereto.

The defendants again filed a motion to add Mehrabian and/or California Auto Mart, Inc. dba Glendale Kia as judgment debtors.

In opposition, Mehrabian declared he did not assert any rights on behalf of himself or California Auto Mart in the underlying lawsuit and that he attended the trial as the chief executive officer of the plaintiff, Auto Auction Group. Mehrabian further declared Auto Auction Group and California Auto Mart keep separate financial records, file separate tax returns and maintain separate inventories of vehicles for sale. Mehrabian declared that, in the year 2000, Auto Auction Group loaned California Auto Mart approximately $2,000,000. In repayment of the debt, California Auto Mart paid expenses incurred by Auto Auction Group and received a credit against the loan in the amount of the payments. Mehrabian was present in court when Auto Auction Group’s counsel advised the trial court of these facts and, to the best of Mehrabian’s knowledge, the statements made by counsel were correct. Mehrabian further declared loss of the subleased property, the deterioration of economic conditions in 2008 and the reduction in the availability of consumer credit had placed the viability of Auto Auction Group’s business in doubt.

In addition to the previously raised objections, Mehrabian and California Auto Mart claimed the moving parties lacked standing to bring the motion because they had assigned their rights in the judgment. ( Johnson v. County of Fresno (2003) 111 Cal.App.4th 1087, 1096.)

In response to this opposition, counsel for the assignees of the judgment filed a partial assignment of judgment by which the assignees conveyed to Ritz Leasing, Inc. their rights, title and interest in the judgment except as necessary to secure a loan to Ritz Leasing, Inc.

b. Judge Shook’s written order denying the motion.

*6 After conducting a hearing on the motion, Judge Shook issued a written order denying the motion to amend the judgment. Judge Shook found the “defendants fail[ed] to provide any evidence of control of the litigation by Mehrabian or [California Auto Mart, dba] Glendale Kia....” Additionally, the defendants were required to prove “ ‘such “unity of interest” between the alter ego and corporation as to ensure that the alter ego’s interests were represented in the underlying litigation.’ [Citation.]” “As their main evidence of an alter ego relationship, defendants cite to trial testimony that purportedly shows that the finances of [California Auto Mart, Inc. dba] Glendale Kia and plaintiff [Auto Auction Group] were ‘inextricably intertwined’ or ‘inextricably interwoven.’ However, a review of the trial testimony shows that defendants have mischaracterized it. In their motion, defendants contend that $2 million of the damages presented at trial were Glendale Kia’s damages. [Citation.] However, the transcript shows that plaintiff’s counsel explained to the court that plaintiff loaned Glendale Kia $2 million and that instead of directly repaying plaintiff, Glendale Kia paid plaintiff’s expenses using Glendale Kia’s checking account. [Citation.] The other cited portions of the trial testimony set forth ... [in] the motion (i .e., showing shared offices, personnel, advertising, and parts and service departments, the use of ‘Glendale Kia’ license plate frames on plaintiff’s cars, etc.) do not sufficiently establish the requisite unity of interest.”

Judge Shook also found the defendants failed to act with diligence in seeking to amend the judgment, noting the defendants knew all the facts relevant to their alter ego theory at the time of trial. Judge Shook additionally concluded the defendants lacked standing to bring the motion to amend because they had assigned their rights in the judgment by the assignment dated August 14, 2008.

7. Subsequent proceedings.

On May 15, 2009, the defendants filed a Notice of Appeal from the order denying the motion to amend the judgment.

That same day, Mehrabian and California Auto Mart filed a motion for attorney fees and costs as the prevailing parties on the motion.

On June 12, 2009, the trial court conducted a hearing on the motion, granted the request and awarded Mehrabian and California Auto Mart attorney fees and costs in the amount of $81,028.99.

CONTENTIONS

Appellants contend the trial court erred in denying their motion to amend the judgment and in granting Mehrabian and California Auto Mart attorney fees.

DISCUSSION

1. The denial of the motion to amend the judgment.

a. General principles.

Code of Civil Procedure section 187 authorizes a trial court to amend a judgment to add judgment debtors.FN2 ( McClellan v. Northridge Park Townhome Owners Assn. (2001) 89 Cal.App.4th 746, 751-752; Hall, Goodhue, Haisley & Barker, Inc. v. Marconi Conf. Center Bd. (1996) 41 Cal.App.4th 1551, 1554; NEC Electronics Inc. v. Hurt (1989) 208 Cal.App.3d 772, 778; Dow Jones Co. v. Avenel (1984) 151 Cal.App.3d 144, 148.)

FN2. Code of Civil Procedure section 187 provides: “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.”

*7 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. [Citations.] 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. [Citations.] ‘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.’ [Citation.]” ( NEC Electronics Inc., supra, 208 Cal.App.3d at p. 778.)

“In California, two conditions must be met before the alter ego doctrine will be invoked. First, there must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist. Second, there must be an inequitable result if the acts in question are treated as those of the corporation alone. [Citations.] ‘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.’ [Citations.] 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. [Citations.] No one characteristic governs, but the courts must look at all the circumstances to determine whether the doctrine should be applied. [Citation.] Alter ego is an extreme remedy, sparingly used. [Citation.]” ( Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538 -539.)

In reviewing an order amending a judgment to add a judgment debtor, we determine whether the trial court’s findings are supported by substantial evidence. ( McClellan v. Northridge Park Townhome Owners Assn., supra, 89 Cal.App.4th at pp. 751-752; NEC Electronics Inc. v. Hurt, supra, 208 Cal.App.3d at pp. 776-777.) Similarly, application of the alter ego doctrine is reviewed for sufficiency of the evidence. ( H.A.S. Loan Service, Inc. v. McColgan (1943) 21 Cal.2d 518, 524; Mid-Century Ins. Co. v. Gardner (1992) 9 Cal.App.4th 1205, 1213.)

In reviewing a finding for substantial evidence, “ ‘the power of the appellant court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted, which will support the conclusion reached by the [trier of fact]. When two or more inferences can be reasonably deduced from the facts, the reviewing court is without power to substitute its deductions for those of the trial court.’ “ ( Estate of Teel (1944) 25 Cal.2d 520, 526.)

b. Substantial evidence supports the trial court’s findings.

*8 In denying the motion to amend the judgment, the trial court found the appellants “fail[ed] to provide any evidence of control of the litigation by Mehrabian or [California Auto Mart dba] Glendale Kia....” The trial court also found the defendants failed to demonstrate a “unity of interest” between the plaintiff Auto Auction Group and the new judgment debtor, Mehrabian and/or California Auto Mart, that would ensure the alter ego’s interests were represented in the underlying litigation.

Appellants ask us to overturn these findings. They argue there is sufficient evidence that Mehrabian, the owner of Auto Auction Group and California Auto Mart dba Glendale Kia, controlled the litigation. Appellants claim Mehrabian actively prosecuted the litigation and he was present during the entire trial. They rely extensively on Judge Fahey’s vacated order granting their motion and assert Judge Fahey was in the best position to assess the facts of the case as it was assigned to him from the outset and he presided over the trial.

However, reasonable minds might reach different results on the facts presented and, “ ‘[w]hen two or more inferences can be reasonably deduced from the facts, the reviewing court is without power to substitute its deductions for those of the trial court.’ “ ( Estate of Teel, supra, 25 Cal.2d at p. 526.) Thus, on review for substantial evidence, we are not at liberty to substitute our view of the case, or Judge Fahey’s, for Judge Shook’s. Here, Judge Shook properly could conclude Mehrabian prosecuted the litigation and attended the trial only in his capacity as the representative of the plaintiff, Auto Auction Group.

Moreover, even assuming appellants have demonstrated that Mehrabian controlled the litigation, they failed to establish to Judge Shook’s satisfaction that either Mehrabian or California Auto Mart was the alter ego of Auto Auction Group. Although Judge Shook accepted appellants’ representations that Auto Auction Group and California Auto Mart shared offices, personnel, advertising, and parts and service departments and that Auto Auction Group used Glendale Kia license plate frames on its cars, Judge Shook concluded these factors did not sufficiently establish the requisite unity of interest. Case law permits consideration of many factors in determining whether to apply the alter ego doctrine. Further, “[n]o one characteristic governs, but the courts must look at all the circumstances to determine whether the doctrine should be applied. [Citation.]” ( Sonora Diamond Corp. v. Superior Court, supra, 83 Cal.App.4th at p. 539.)

In rejecting appellants’ argument, Judge Shook properly could rely on the evidence that indicated Auto Auction Group and California Auto Mart observed corporate formalities, possessed separate licenses and inventories and were incorporated separately. Also, there was no evidence that Mehrabian used the assets of either corporation as his own and, although he owned both corporations, “[t]he courts have cautioned against relying too heavily in isolation on the factors of inadequate capitalization or concentration of ownership and control.” ( Mid-Century Ins. Co. v.. Gardner, supra, 9 Cal.App.4th at p. 1213.)

*9 Appellants contend the overriding factor in their favor is Auto Auction Group’s representation at trial that the finances and operation of Auto Auction Group and Glendale Kia were “inextricably interwoven.” They rely on statements made by Auto Auction Group’s counsel that “all the money for Auto Auction Group runs through Glendale Kia’s checking account” and “for all intents and purposes, they deal with their finances and they deal with their day-to-day operations together....” Appellants claim that, based on these statements, Auto Auction Group was permitted to attempt to prove approximately $2 million in damages based on checks drawn on Glendale Kia’s bank account. Appellants argue Auto Auction Group cannot now object to amendment of the judgment to include Glendale Kia and its owner, Mehrabian.

In rejecting this argument, Judge Shook found appellants had mischaracterized the record in asserting the finances of California Auto Mart, Inc. dba Glendale Kia and plaintiff Auto Auction Group were ‘inextricably interwoven.’ “ Judge Shook’s finding is supported by the record.

After Auto Auction Group’s counsel made the quoted statements, the trial court sustained an objection to the Glendale Kia checks. However, after a recess, Auto Auction Group’s counsel represented that the accountant for Auto Auction Group and California Auto Mart had advised that California Auto Mart paid Auto Auction Group’s expenses in lieu of repayment of a loan. In making this “loan proffer,” counsel essentially retracted the earlier statement that Auto Auction Group and Glendale Kia “deal with their finances and they deal with their day-to-day operations together....”

Additionally, apart from the loan proffer made at trial, evidence of the loan was before Judge Shook in the form of Mehrabian’s declaration in opposition to the motion to amend the judgment. Mehrabian declared Glendale Kia paid Auto Auction Group’s expenses in lieu of making loan payments and that the statements made by Auto Auction Group’s counsel at trial regarding the loan were true and correct. Judge Shook implicitly accepted Mehrabian’s declaration and found “plaintiff’s counsel explained to the court that plaintiff loaned Glendale Kia $2 million and that instead of directly repaying plaintiff, Glendale Kia paid plaintiff’s expenses using Glendale Kia’s checking account.”

Based on this evidence, Judge Shook properly could conclude the record did not demonstrate that the finances and operation of Auto Auction Group and California Auto Mart were inextricably interwoven and that payment of Auto Auction Group’s expenses by Glendale Kia was not evidence of alter ego but was in lieu of repayment of a loan. Thus, the record supports Judge Shook’s decision not to rely on the statements of Auto Auction Group’s counsel made prior to the loan proffer. Removal of these statements from the alter ego equation leaves appellants’ claim that Auto Auction Group and Glendale Kia commingled funds and operations without evidentiary support.

*10 Finally, we address appellants’ assertion inequity will result if the alter ego doctrine is not applied. Appellants cite Judge Fahey’s findings as evidence that Mehrabian and California Auto Mart acted inequitably in litigating the underlying meritless lawsuit through Auto Auction Group and thereby protecting the more successful corporation from liability for the costs judgment rendered against Auto Auction Group. They claim this circumstance warrants application of the alter ego doctrine.

However, Judge Shook was entitled to view the evidence differently and conclude there was no showing of bad faith on the part of Mehrabian or California Auto Mart such that it would be inequitable to respect the corporate form. The sublease at issue was between the Oganesyan brothers and Auto Auction Group and, pursuant to the sublease, the Oganesyan brothers had consensual dealings with Auto Auction Group for several years. Further, after Ritz Leasing purchased the sublease, it evicted Auto Auction Group from the subleased property without reference to Mehrabian, California Auto Mart or Glendale Kia. Based on these circumstances, Judge Shook properly could conclude the prosecution of the action by Auto Auction Group worked no injustice on the appellants. Judge Shook similarly was at liberty to accept Mehrabian’s representations that economic conditions and the reduction in the availability of consumer credit had resulted in a dramatic reduction in Auto Auction Group’s sales activity.

In sum, the record establishes that Judge Shook considered the entire record, weighed the evidence and concluded the alter ego doctrine should not be applied in this case. Because Judge Shook’s findings are supported by the record, we must affirm the order denying the motion to amend the judgment to add Mehrabian and/or California Auto Mart as judgment debtors. Based on this resolution, we need not address whether the assignment of the judgment deprived appellants of standing or whether appellants acted with diligence in pursuing the motion to amend the judgment.

2. The appellants failed to appeal the award of attorney fees.

Appellants seek to overturn the award of attorney fees in favor of Mehrabian and California Auto Mart. They contend Mehrabian and California Auto Mart cannot be seen as prevailing parties under Civil Code section 1717 because they achieved only “a procedural victory on an issue unrelated to the merits of the parties’ contract claims....” They further assert there cannot be a prevailing party under Civil Code section 1717 until a final resolution of the merits has been reached. ( Hsu v. Abbara (1995) 9 Cal.4th 863, 876.) Appellants additionally contend the amount of the award was excessive.

However, we lack jurisdiction to entertain these contentions. Appellants filed their notice of appeal on May 15, 2009. On the same day, Mehrabian and California Auto Mart filed their motion for fees and costs as the prevailing parties. One month later, on June 12, 2009, the trial court awarded respondents attorney fees and costs. Thus, the entitlement to attorney fees was litigated after appellants filed their notice of appeal. In these circumstances, an appellate court lacks jurisdiction to consider the propriety of the attorney fees order. ( Colony Hill v. Ghamaty (2006) 143 Cal.App.4th 1156, 1171-1172; DeZerega v. Meggs (2000) 83 Cal.App.4th 28, 43-44; Norman I. Krug Real Estate Investments, Inc. v. Praszker (1990) 220 Cal.App.3d 35, 46-47.)

*11 Appellants contend that, because the notice of appeal filed May 15, 2009, was “from the entirety of the Court’s Ruling and from all intermediate orders, rulings, and decisions embraced within it,” the notice necessarily included the order awarding attorney fees entered on June 12, 2009. Appellants argue a notice of appeal should be liberally construed in favor of its sufficiency. ( Walker v. Los Angeles County Metropolitan Transportation Authority (2005) 35 Cal.4th 15, 20.) They assert that, in the interests of justice, this court should review the award.

Appellants’ argument might have had merit if the trial court’s order denying the motion to amend indicated the trial court’s intention to award attorney fees, leaving only the amount of the award to be determined. (See Grant v. List & Lathrop (1992) 2 Cal.App.4th 993, 998.) However, as noted, both the entitlement to attorney fees and the amount to be awarded were litigated after the defendants filed a notice of appeal from the order denying the motion to amend. Under these circumstances, this court lacks jurisdiction to review the order awarding attorney fees. Even where a judgment includes an award of costs, if no appeal is taken from the post judgment order awarding attorney fees, “the appellate court has no jurisdiction to review it.” ( Norman I. Krug Real Estate Investments, Inc. v. Praszker, supra, 220 Cal.App.3d at p. 46.) We therefore decline to address the contentions raised by appellants with respect to the award of attorney fees.

DISPOSITION

The order denying the motion to amend the judgment to add Mehrabian and/or California Auto Mart, Inc., dba Glendale Kia is affirmed. Each party shall bear its own costs on appeal.

We concur: KITCHING and ALDRICH, JJ.

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