Asphalt Professionals v. Fairland Liquidating Corp. CA2/6 ( 2021 )

Filed 4/19/21 Asphalt Professionals v. Fairland Liquidating Corp. CA2/6
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
ASPHALT PROFESSIONALS, 2d Civ. No. B307394
INC., (Super. Ct. No. SC044181)
(Ventura County)
Plaintiff and Appellant,
v.
FAIRLAND LIQUIDATING
CORPORATION,
Defendant and Respondent.
Asphalt Professionals, Inc. (API) appeals an order granting
a motion to lift a stay that had prevented Fairland Liquidating
Corporation (FLC), formerly known as Fairland Construction,
Inc., from enforcing a money judgment against API. The stay
was issued because FLC’s corporate status had been suspended.
FLC subsequently revived its corporate status and moved to lift
the stay. We conclude, among other things, that the trial court
properly granted FLC’s motion to lift the stay and enforce its
judgment against API. We affirm.1
FACTS
API filed an action against Fairland Construction, Inc.
alleging various causes of action, including breach of a
construction contract. The construction contract contained an
attorney fee provision.
Fairland Construction, Inc. and two other joined
defendants ultimately prevailed in litigation against API. These
defendants filed a motion for costs and attorney fees. API
opposed the motion.
In 2013, the trial court ruled the motion for attorney fees
and costs was untimely. Fairland Construction, Inc. and the two
other defendants appealed. In 2014, we reversed and ruled the
attorney fee motion was timely.
The trial court on remand granted that motion. On
December 1, 2014, the trial court awarded attorney fees
“collectively” to defendant Fairland Construction, Inc. and two
other joined defendants in the amount of $390,000.00, costs in
the amount of $18,628.75, and additional attorney fees incurred
on the prior successful appeal in the amount of $5,375.09.
On January 15, 2015, the trial court ruled, “The award of
costs and fees as to Fairland Construction, Inc., is stayed based
upon the evidence that it is a suspended corporation. Revenue
and Taxation Code § 23301. Upon proof of reinstatement of
Fairland’s corporate status, the Court will lift the stay.” (Italics
added.)
API appealed the attorney fee and cost judgment. We
affirmed that judgment on January 20, 2016. We held defendant
1 We grant FLC’s motions for judicial notice.
2.
Fairland Construction, Inc. had “prevailed on” an “alter ego
issue” raised by API, and it was “entitled to attorney fees based
on the attorney fee provision of the contract” upon which API had
unsuccessfully based its alleged claim for liability against this
defendant. The remittitur issued on March 30, 2016. At that
time Fairland Construction, Inc. was not able to enforce the
money judgment it had obtained against API. The January 15,
2015, stay order the superior court had issued as a result of its
suspended corporate status was still in effect.
On March 9, 2020, Fairland Construction, Inc. filed a notice
of motion and motion seeking to lift the stay with proof that its
corporate status had been revived. It claimed that its revived
status, as shown by a document from the California Secretary of
State, entitled it to proceed with litigation and to now enforce the
money judgment it had obtained against API.
On July 31, 2020, the trial court held a hearing on the
motion to lift the stay. API responded to the motion and its
counsel objected to the attempt to lift the stay. (There is no
reporter’s transcript, recording, or settled statement regarding
that hearing in the record on appeal.)
The trial court then authorized the parties to submit
additional briefs and documents regarding Fairland
Construction, Inc.’s corporate name change. In August 2020,
Fairland Construction, Inc. filed an application for the court “to
formally recognize” its new name as “Fairland Liquidating
Corporation” (FLC). It attached documentary proof to show that
it had lawfully changed its corporate name and that its new
name had been approved by the California Secretary of State.
API filed an opposition.
3.
On August 24, 2020, the trial court issued an order
granting Fairland Construction, Inc.’s motion to lift the stay that
had precluded it from enforcing its judgment against API. That
order also amended the judgment to reflect the current “true
name” of the defendant to be “Fairland Liquidating Corporation
[FLC] formerly known as Fairland Construction, Inc.” API filed
an appeal.
DISCUSSION
The Record on Appeal
API contends the trial court authorized FLC to submit
procedurally deficient ex parte applications to prove it had
revived its corporate status and it erred by lifting the stay and
allowing enforcement of the judgment.
But a critical aspect of this appeal involves what occurred
at the July 31, 2020, hearing on FLC’s motion to lift the stay.
API has not produced a reporter’s transcript, recording, or a
settled statement regarding that hearing. “A fundamental
principle of appellate practice is that an appellant ‘ “must
affirmatively show error by an adequate record. . . . Error is
never presumed . . . . ‘A judgment or order of the lower court is
presumed correct. All intendments and presumptions are
indulged to support it on matters as to which the record is
silent . . . .’ ” ’ ” (Null v. City of Los Angeles (1988) 206 Cal.App.3d
1528, 1532.) Given the incomplete record, there is a strong initial
presumption that the validity of various trial court rulings and
procedures may be supported by the portions of the record that
are not before us. (Ibid.)
Validity of the Procedure FLC Used to Lift the Stay
On January 15, 2015, the trial court stayed FLC’s
enforcement of the judgment it had against API “based upon the
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evidence that it is a suspended corporation.” But it also provided
that “[u]pon proof of reinstatement of Fairland’s corporate status,
the Court will lift the stay.” The trial court did not specify the
type of procedure to be used to prove corporate status had been
reinstated.
API contends FLC filed an ex parte application that was
procedurally deficient to lift the stay.
FLC responds, “There is simply no suggestion, much less
any evidence, that Judge Borrell vacated the stay based on an ex
parte application. . . . Appellant is asking this Court to review a
ruling on hearing that simply did not occur.” The procedural
history supports FLC’s position.
FLC notes that it initially filed an “ex parte application” to
“lift stay of enforcement of judgment” in February 2020. That
application contained a notice of a hearing date and time, an
attached memorandum of points and authorities, a declaration of
counsel, and exhibits showing that its corporate status had been
revived. The application contained a proof of service showing
service by “facsimile” on counsel for API dated February 6, 2020.
On February 10, 2020, API filed an opposition which included a
declaration by API’s counsel. But, as FLC notes, the hearing on
that application did not take place because the court “closed in
response to the COVID 19 pandemic.”
The Motion to Lift the Stay
On March 9, 2020, FLC filed a notice of motion and motion
to lift the stay which contained a memorandum of points and
authorities, declaration of counsel, and exhibits showing that its
corporate status was revived. The notice of motion and motion
showed a hearing date of March 26, 2020, at 8:30 a.m., in
5.
Department 40. It contained a proof of service showing service on
API.
This was a valid motion giving proper notice to API of the
grounds and subject matter of the motion to lift the stay, with the
required supporting documents. (Cal. Rules of Court, rule
3.1112(a) & (b); Savage v. Smith (1915) 170 Cal. 472, 474;
Carrasco v. Craft (1985) 164 Cal.App.3d 796, 808; Estate of Parks
(1962) 206 Cal.App.2d 623, 632.)
FLC claims the hearing on this motion “was rescheduled by
the trial court for July 31, 2020, as the Court reopened for
telephonic hearings.” (Italics added.)
Consequently, on July 6, 2020, FLC served a “notice of
hearing” showing a changed hearing date of July 31, 2020, at 8:30
a.m., in Department 40.
API contends serving this notice of hearing by itself was
defective. It suggests FLC should have attached a notice of
motion and motion, points and authorities, declaration and
supporting exhibits. But that would be needless duplication.
FLC had already served API with the motion. The motion was
made at the time it was originally filed and served. (Arambula v.
Union Carbide Corp. (2005) 128 Cal.App.4th 333, 341.) The
notice of hearing document was essentially only notice of a
changed hearing date, not the filing of a new motion. (Ibid.)
Moreover, API’s counsel appeared at the July 31 hearing
and opposed the lifting of the stay. The claim that the trial court
erred at that hearing by not properly considering API’s challenge
to the procedural validity of the motion may not be sustained
because API did not include a record of that hearing. (Null v.
City of Los Angeles, supra, 206 Cal.App.3d at p. 1532; see also In
re Marriage of Obrecht (2016) 245 Cal.App.4th 1, 9 [given the
6.
absence of a reporter’s transcript of the hearing and proof that a
party attended the hearing, the Court of Appeal would presume
that party had “submitted to the court’s jurisdiction by making a
general appearance”].)
Consequently, from the record we have, API has not shown
it had inadequate notice of FLC’s “motion” to lift the stay. Nor
has it shown that the trial court erred by ruling on that motion.
(Savage v. Smith, supra, 170 Cal. at p. 474; Carrasco v. Craft,
supra, 164 Cal.App.3d at p. 808.)
Evidence of Revival of FLC’s Corporate Status
API contends there was insufficient proof FLC had revived
its corporate status.
FLC claims it presented sufficient evidence. We agree.
FLC produced a copy of a September 6, 2019, “certificate of
status” signed by Alex Padilla, as Secretary of State of California,
stating, “The records of this office indicate the entity [FLC] is
authorized to exercise all of its powers, rights and privileges in
the State of California.” Counsel for FLC submitted a declaration
stating the attached certificate was “a true and correct copy” of
that original certificate.
A certificate from the California Secretary of State showing
revival of corporate powers is admissible evidence. (Aspen Grove
Condominium Assn. v. CNL Income Northstar LLC (2014) 231
Cal.App.4th 53, 59.) It shows “the corporation may be allowed to
carry on litigation.” (Benton v. County of Napa (1991) 226
Cal.App.3d 1485, 1490.) In this case it means the right to file the
motion to lift the stay. (Ibid.)
FLC’s Standing to Enforce the Judgment
API contends FLC had no “standing” to seek revival or
enforcement of the judgment because: 1) it “was not a named
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‘party’ in this action,” and 2) it had not “complied with the
requirements to become a legitimate ‘party’ to the action.”
(Boldface & capitalization omitted.)
FLC responds that 1) it was not a new party to this
litigation; 2) defendant Fairland Construction, Inc. is the same
corporation as FLC; 3) Fairland Construction, Inc. merely
changed its name; and 4) the trial court properly declared the
new name of the company and authorized it to lift the stay. We
agree.
Every California corporation authorized to do business in
this state has a registered file number with California’s Secretary
of State. (Corp. Code, §§ 110, subd. (d), 1157, subd. (e)(2), 2205.5,
subds. (c) & (d), 12214, subd. (d).) The registered “file number”
for defendant Fairland Construction, Inc. is C2674170. The
registered file number for FLC is C2674170. The file numbers
are the same because it is the same corporation.
Citing Kaufman & Broad Communities, Inc. v. Performance
Plastering, Inc. (2006) 136 Cal.App.4th 212, API contends FLC
had to file a motion to intervene into this case before it filed the
motion to lift the stay. But FLC does not have to intervene
because it is already a party in this case. The only difference
here is that the corporation has a new name.
Impact of the Name Change
API suggests that a corporate name change means the
corporation is a new corporate entity.
But a “change in name does not affect the identity of a
corporation.” (Mutual Bldg. & Loan Ass’n of Long Beach v.
Corum (1934) 220 Cal. 282, 292.) The name change “ ‘did not add
a new defendant to the judgment, but merely set forth the correct
8.
name.’ ” (Thomson v. L.C. Roney & Co. (1952) 112 Cal.App.2d
420, 426.)
The name Fairland Liquidating Corporation (FLC) is the
name the Secretary of State recognizes as the official current
name of the former Fairland Construction, Inc.
A trial court may rely on the validity of that determination
by this state official who has jurisdiction over corporations.
(Westlake Park Inv. Co. v. Jordan (1926) 198 Cal. 609, 616
[Secretary of State determines “whether a corporate organization
has been accomplished in conformity with the statutory laws”];
Roman Catholic Bishop of San Jose v. Bowen (2013) 219
Cal.App.4th 484, 498 [Secretary of State’s duty includes reserving
“ ‘names of corporations meeting the requirements of the
Corporations Code’ ”]; Preis v. American Indemnity Co. (1990) 220
Cal.App.3d 752, 759 [the “statutory presumption an official duty
has been regularly performed applies to official writings”].)
“Such a presumption is evidence.” (Baird v. City of Fresno (1950)
97 Cal.App.2d 336, 340.)
The reliability of corporate documents filed by the
Secretary of State is high because this state official has a duty to
only file a corporate document “if it conforms to law.” (Corp.
Code, § 12214, subd. (a).) Consequently, courts properly rely on
the validity of corporate documents filed by the Secretary of
State. (Corp. Code, § 201, subd. (b); O’Gara Coach Co., LLC v. Ra
(2019) 30 Cal.App.5th 1115, 1121, fn. 2; Aspen Grove
Condominium Assn. v. CNL Income Northstar LLC, supra, 231
Cal.App.4th at p. 59 [Court of Appeal relied on certificate from
Secretary of State as proof of current corporate status].)
9.
FLC’s Procedure to Change Its Name
API suggests the Secretary of State’s approval of the name
change is not dispositive because the name change was invalid as
a matter of law. It claims a suspended corporation may not
change its name until after its corporate powers are revived. It
argues that because FLC changed its name while it was a
suspended corporation, the name change is invalid. We disagree.
The powers of a suspended corporation are highly
restricted. But there is an exception in case law, and statute,
that gives a suspended corporation “the power to amend its
articles to set forth a new name.” (Boyer v. Jones (2001) 88
Cal.App.4th 220, 225; Grell v. Laci Le Beau Corp. (1999) 73
Cal.App.4th 1300, 1306 [a suspended corporation has a statutory
right to amend “the articles of incorporation” to “establish a new
corporate name”]; see also Rev. & Tax. Code, § 23301.)
A declaration by FLC’s counsel showed Fairland
Construction, Inc. had amended its articles of incorporation to
change its name to Fairland Liquidating Corporation (FLC). A
copy of the certificate of amendment of the articles of
incorporation was attached. That name change was approved by
the shareholders and board of the corporation. That certificate of
amendment of the articles was submitted to the Secretary of
State. The Secretary of State filed the amended articles and
approved the new name.
API dismisses the Secretary of State’s approval. But the
Secretary of State determines whether articles of incorporation
meet the requirements of state law and authorizes the validity of
corporate name changes. (Corp. Code, §§ 201, subd. (b), 1157,
2106, 2107, 12214, subd. (a); Cranford v. Jordan (1936) 7 Cal.2d
465, 466-467; Westlake Park Investment Co. v. Jordan, supra, 198
10.
Cal. at p. 616; Roman Catholic Bishop of San Jose v. Bowen,
supra, 219 Cal.App.4th at pp. 495-496, 498.)
API filed an opposition to FLC’s corporate name change
documents. But it did not present evidence to show why the
Secretary of State lacked the authority to authorize the corporate
name change.
Fairness of the Court’s Procedure on the Name Change Issue
FLC’s motion to lift the stay contained evidence showing
the name change. The trial court’s minute order of August 24,
2020, and another document show that at the hearing on July 31,
2020, the trial court decided to allow FLC to file a post-hearing
“ex parte” application with the court to amend the judgment to
reflect its new name. It permitted API to file a response, and it
decided that a new hearing on this name change issue was not
necessary. The parties filed their respective post-hearing motion
papers on this issue on August 7, 2020, while the motion to lift
the stay was still under submission. On August 24, 2020, the
court ruled on the motion to lift the stay and granted the motion
to amend the judgment to reflect FLC’s correct name.
API challenges the procedure the trial court authorized to
change the name on the judgment and the validity of FLC’s ex
parte application.
API suggests allowing submission of additional briefs and
documents regarding the corporate name change issue after the
July 31 hearing was error.
But we do not know what occurred at the July 31 hearing
that prompted the trial court to request the submission of
additional post-hearing briefs and documents on the name
change issue. API did not produce a record of that hearing.
Consequently, we may not presume error based on such an
11.
incomplete record. (Null v. City of Los Angeles, supra, 206
Cal.App.3d at p. 1532; see also Hood v. Gonzales (2019) 43
Cal.App.5th 57, 79 [on issues “involving the abuse of discretion
standard of review, a reporter’s transcript or an agreed or settled
statement of the proceedings is indispensable”].)
Compliance with the California Rules of Court
API claims it did not receive timely notice of FLC’s post
hearing ex parte application on the name change issue as
required by California Rules of Court, rule 3.1203 (“rule 3.1203”).
It contends it received the application at 12:09 p.m., which did
not comply with the 10:00 a.m. deadline in rule 3.1203(a). But
because the court ruled against API, and given API’s failure to
obtain a settled statement or findings on this issue, we must
presume the trial court may have determined this court rule did
not apply here, or, if it did, noncompliance was excused or not
substantial, or that it may have impliedly found against API for
other reasons. (Fladeboe v. American Isuzu Motors, Inc. (2007)
150 Cal.App.4th 42, 48-49; Null v. City of Los Angeles, supra, 206
Cal.App.3d at p. 1532.) API has not shown that the court
intended rule 3.1203 to apply to this post-hearing procedure. In
the court’s written order, it made no reference to this rule of
court. The rule relates to notice involved for an “expedited ex
parte hearing.” (Newsom v. Superior Court (2020) 51 Cal.App.5th
1093, 1098, italics added.) But here the court ruled there would
be no hearing on this ex parte application. Papers would simply
be submitted to the court in chambers while this matter was
under submission. FLC’s and API’s documents listed no hearing
date. Because there is no record of the July 31 hearing, we do not
know what service time requirements, if any, the court imposed
12.
for these post-hearing documents, and we will not presume error.
(Null, at p. 1532.)
Moreover, even had API shown noncompliance with the
rules of court, this “ ‘is not reversible error unless prejudice is
shown.’ ” (In re Marriage of Steiner & Hosseini (2004) 117
Cal.App.4th 519, 524; see also Baker v. Eilers Music Co. (1917)
175 Cal. 652, 656-657; Robert v. Stanford University (2014) 224
Cal.App.4th 67, 72; Estate of Cooper (1970) 11 Cal.App.3d 1114,
1121-1122.) API has not made such a showing. It filed its
response on the merits and did not request a continuance.
(Carlton v. Quint (2000) 77 Cal.App.4th 690, 697.) It has not
shown what additional information it could have produced if
given additional time or what difference it would make for the
final result.
Due Process
API also has not supported its claim that it was denied
“due process.” It had notice, a hearing, and more than one
opportunity to challenge the evidence FLC presented regarding
its name change. (Goldberg v. Kelly (1970) 397 U.S. 254, 267-268
[25 L.Ed.2d 287, 299].) Proof of FLC’s name change had been
provided with FLC’s motion to lift the stay. The court considered
FLC’s post-hearing August 7 documents and API’s August 7
“written opposition” before it ruled. Consequently, API had three
opportunities to challenge the name change evidence – 1) in
response to FLC’s motion to lift the stay, 2) at the July 31
hearing, and 3) in its post-hearing brief. API’s August 7 post-
hearing written opposition did not include evidence to challenge
the name change documentation. API’s counsel’s declaration did
not contain an offer of proof about any evidence it could provide.
13.
Courts may request parties to file post-hearing briefs on
issues of concern to the court. (Gov. Code, § 68081; People v.
Garcia (2002) 97 Cal.App.4th 847, 854; Monarch Healthcare v.
Superior Court (2000) 78 Cal.App.4th 1282, 1286.) Here the trial
court could reasonably find FLC proved its name change at the
July 31 hearing, and therefore the name on the judgment had to
be corrected. It could decide it was a better procedure for a party
to request correction than for the court to correct it sua sponte.
(Carpenter v. Pacific Mutual Life Insurance (1939) 14 Cal.2d 704,
707 [“corrections may be made . . . either on motion of an
interested party, or on the court’s own motion”]; Misik v. D’Arco
(2011) 197 Cal. App.4th 1065, 1075; Lang v. Superior Court
(1961) 198 Cal.App.2d 16, 17-18.) The “ ‘ “precise dictates of due
process are flexible and vary according to context.” ’ ” (Hood v.
Gonzales, supra, 43 Cal.App.5th at p. 80.) The procedure the
court selected was not unfair or unauthorized. (Dorland v.
Dorland (1960) 178 Cal.App.2d 664, 670; see also Misik, at
p. 1075; Lang, at pp. 17-18.) Moreover, API has not shown how a
different procedure from the one the trial court selected would
lead to a different result. Nor has it cited to evidence in the
record to challenge the validity of the Secretary of State’s
documents.
Amending the Judgment to Add the New Name
The trial court rejected API’s challenge to its authority to
amend the judgment to reflect FLC as the new corporate name.
It amended the judgment to change the name of defendant
Fairland Construction, Inc. to FLC, finding this was necessary “to
reflect the true name of the Fairland entity.” (Italics added.) The
court did not err.
14.
A court’s authority to amend a judgment to reflect a party’s
true name is well established. (Leviston v. Swan (1867) 33 Cal.
480, 484; People v. Landon White Bail Bonds (1991) 234
Cal.App.3d 66, 77; Russ v. Smith (1968) 264 Cal.App.2d 385, 390;
Mirabito v. San Francisco Dairy Co. (1935) 8 Cal.App.2d 54, 57.)
Here defendant Fairland Construction, Inc. was a party to
the action. “Since the court had jurisdiction over the defendant,
it had jurisdiction to make its judgment reflect the defendant’s
true name.” (Thompson v. L.C. Roney & Co., Inc., supra, 112
Cal.App.2d at p. 427.) This name change did not prejudice the
rights of API. The change “does not effect an enlargement of the
original judgment nor is it a modification thereof to correct a
supposed error of law. It is simply an amendment whose purpose
is to designate the real name of the judgment [creditor].” (Id. at
p. 425.) “ ‘That a court may at any time amend its judgment so
that the latter will properly designate the real defendants is not
open to question.’ ” (Id. at p. 426, italics added.)
Corporate Revival Impact and Finality of Judgment Issues
API contends that because Fairland Construction Inc.’s
corporate powers were suspended on December 2, 2013, it had no
authority to “act in any way” thereafter. It suggests that, despite
the proof of a certificate of corporate status revival, API may now
challenge the validity of the procedures FLC previously used to
obtain attorney fees and the prior final judgment awarding them.
But API has not considered the remedial retroactive scope
of a corporate revivor certificate and the issue of the finality of
the judgment. After a corporation obtains “a certificate of revivor
of its corporate status,” it may continue litigation. (Rochin v. Pat
Johnson Manufacturing Co. (1998) 67 Cal.App.4th 1228, 1236-
1237.) A revivor certificate will validate “ ‘the procedural steps
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taken on behalf of the corporation while it was under
suspension.’ ” (Id. at p. 1237.) This includes “validating
otherwise invalid prior proceedings.” (Benton v. County of Napa,
supra, 226 Cal.App.3d at p. 1490.) “[A]s to matters occurring
prior to judgment, the revival of corporate powers has the effect
of validating the earlier acts.” (Peacock Hill Assn. v. Peacock
Lagoon Constr. Co. (1972) 8 Cal.3d 369, 373.) “[R]evival of
corporate powers enables the previously suspended party to
proceed with the prosecution or defense of the action and
validates a judgment obtained during suspension.” (Center for
Self-Improvement & Community Development v. Lennar Corp.
(2009) 173 Cal.App.4th 1543, 1553.) It also validates an appeal
filed by the suspended corporation during its period of
suspension. (Bourhis v. Lord (2013) 56 Cal.4th 320, 323.)
The trial court awarded attorney fees and costs to Fairland
Construction, Inc. (now FLC). On January 15, 2015, it stayed
that judgment in its favor because “it is a suspended
corporation.” But the court gave FLC the “right” to enforce that
judgment once FLC’s corporate status was restored. We affirmed
the judgment awarding attorney fees and costs on January 20,
2016. The remittitur issued on March 30, 2016. That judgment
is now final and binding on API, and API may not collaterally
attack it. (Auto Equity Sales, Inc. v. Superior Court (1962) 57
Cal.2d 450, 455; Estate of Buckley (1982) 132 Cal.App.3d 434,
446; see also City of Santa Paula v. Narula (2003) 114
Cal.App.4th 485, 490 [“The doctrines of res judicata and
collateral estoppel prevent a losing party from relitigating causes
of action or issues against the prevailing party after a final
judgment”]; see also Sargon Enterprises, Inc. v. University of
Southern California (2013) 215 Cal.App.4th 1495, 1506 [appellate
16.
court’s decision constitutes the law of the case and “must be
adhered to in all subsequent proceedings”].)
API previously had a full opportunity to raise any
challenges it had to the judgment in the trial court and on
appeal. It is now too late for API to raise claims that the issues
were not correctly decided, raise new issues, or challenges that
could have, or should have, been raised in the earlier trial court
and appellate proceedings that were finally decided years ago.
(Sargon Enterprises, Inc. v. University of Southern California,
supra, 215 Cal.App.4th at pp. 1505-1506; City of Santa Paula v.
Narula, supra, 114 Cal.App.4th at pp. 490-491.)
FLC’s Current License to Enter into Construction Contracts
API claims the trial court erred by not staying enforcement
of the attorney fee judgment at the hearing because FLC is not
currently licensed to enter into construction contracts.
But this claim fails because API did not produce an
adequate record. Rulings on this issue are not mentioned in the
trial court’s written decision. There is no settled statement. API
did not obtain written findings on it. There is no reporter’s
transcript of the July 31 hearing. There is no stipulation
specifying all the issues the court decided at the hearing. API
had the duty to develop the “fullest possible” record. (Tudor
Ranches, Inc. v. State Comp. Ins. Fund (1998) 65 Cal.App.4th
1422, 1433; see also People v. Garcia (2010) 185 Cal.App.4th
1203, 1214 [appellate courts are not required to consider claims
of erroneous rulings “that could have been, but were not,
challenged below”].) Because of the absence of a record, we do
not know FLC’s response to this issue at the hearing, what
evidence was presented there, or how the court ruled.
Consequently, we will not presume trial court error based on this
17.
incomplete record. (Null v. City of Los Angeles, supra, 206
Cal.App.3d at p. 1532.)
But even on the record we have, and assuming the facts
API alleges, the result does not change. API has not shown how
FLC’s current construction contract license status prevents it
from enforcing a final prior judgment in its favor. In this case
FLC proved the falsity of API’s claim of FLC liability on a prior
contract. (Bus. & Prof. Code, § 7031, subd. (a) [contractor must
be licensed at the time of the performance of the work to bring an
action to collect for contracting services]; MW Erectors, Inc. v.
Niederhauser Ornamental & Metal Works Co., Inc. (2005) 36
Cal.4th 412, 444-445.)
API’s claim that a corporation must have a current license
to enter into construction contracts to be able to enforce a prior
final judgment debt lawfully owed to it is not supported by case
law. “ ‘The contractor’s license statute cannot be used as a shield
to avoid a just obligation.’ ” (UDC -Universal Development, L.P.
v. CH2M Hill (2010) 181 Cal.App.4th 10, 26; Ranchwood
Communities Limited Partnership v. Jim Beat Construction Co.
(1996) 49 Cal.App.4th 1397, 1411 [contractor’s unlicensed status
does not prevent it from enforcing valid rights which were not
within the prohibition of Business and Professions Code section
7031]; see also Holland v. Morse Diesel Internat., Inc. (2001) 86
Cal.App.4th 1443, 1451, 1453 [unlicensed contractor could bring
damage lawsuit unrelated to the prohibition in section 7031];
Davis Co. v. Superior Court (1969) 1 Cal.App.3d 156, 159 [“an
unlicensed contractor may bring and maintain an action for the
breach of a contract not within the scope of the protective purpose
of the statute”].)
18.
Moreover, the current contracting restriction API
highlights does not change API’s status as an FLC judgment
debtor. Nor does it change FLC’s status as a legally active
corporation with the right to enforce prior judgments. Even
corporations that are no longer doing business, that are inactive,
dissolving, or “winding up” their “affairs,” retain the authority to
collect judgment debts lawfully owed to them. (Favila v. Katten
Muchin Rosenman, LLP (2010) 188 Cal.App.4th 189, 212 [citing
Corporations Code section 2010].) Even after a corporation has
been dissolved, judgments owed to the corporation may be
enforced and collected. (Code Civ. Proc., §§ 656, 658.)
Consequently, it is not the type of business the corporation
currently conducts, but rather the revival of its corporate powers,
as here, that gives it the right to enforce judgments. (Center for
Self-Improvement & Community Development v. Lennar Corp.,
supra, 173 Cal.App.4th at p. 1553.)
API cites WSS Industrial Construction v. Great West
Contractors, Inc. (2008) 162 Cal.App.4th 581 where the court held
an unlicensed contractor could not sue and recover for work
performed on a construction services contract because it was not
licensed at the time it performed the work. But that case is not
relevant. Here FLC did not sue API. API sued FLC, claiming it
was liable on a construction contract of another company. But, as
shown by our prior opinion, FLC was not liable as an alter ego
defendant. Consequently, API had no valid contract cause of
action against FLC. FLC was consequently entitled to attorney
fees, not for performing construction contracting services, but
rather as a prevailing defendant that had incurred costs and
attorney fees in a lawsuit that was not meritorious as to it.
(Jones v. Drain (1983) 149 Cal.App.3d 484, 490 [“a prevailing
19.
defendant sued for breach of contract containing an attorney’s
fees provision and having had to defend the contract cause of
action is entitled to recover its own attorney’s fees and costs . . .
even though the trial court finds no contract existed” (italics
added)].)
Because FLC’s corporate status is revived, FLC may
enforce the judgment (Peacock Hill Assn. v. Peacock Lagoon
Constr. Co., supra, 8 Cal.3d at p. 373), and API may not
collaterally attack it or our prior decision. (Sargon Enterprises,
Inc. v. University of Southern California, supra, 215 Cal.App.4th
at p. 1506.)
We have reviewed API’s remaining contentions and we
conclude it has not shown grounds for reversal.
DISPOSITION
The order is affirmed. Costs on appeal are awarded in
favor of respondent.
NOT TO BE PUBLISHED.
GILBERT, P. J.
We concur:
YEGAN, J.
PERREN, J.
20.
Mark S. Borrell, Judge
Superior Court County of Ventura
______________________________
Law Offices of Ray B. Bowen, Jr., Ray B. Bowen, Jr. for
Plaintiff and Appellant.
Semper Law Group, Leonard M. Tavera for Defendant and
Respondent.
21.