Lopez v. Escamilla ( 2020 )

Filed 5/4/20
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
ALICE LOPEZ, 2d Civil No. B300439
(Super. Ct. No. 56-2018-
Plaintiff and Appellant, 00511082-CU-EN-VTA)
(Ventura County)
v.
JOSE ESCAMILLA,
Defendant and Respondent.
In petitioning the trial court to amend a judgment to add
an alter ego defendant, must the plaintiff proceed by a motion in
the original action, or may plaintiff proceed by complaint in an
independent action on the judgment? Either procedure will do.
FACTS
In May 2012 Alice Lopez recovered a judgment for fraud,
negligent misrepresentation, and breach of fiduciary duty against
Magnolia Home Loans, Inc. (Magnolia) in the amount of
$157,370.
In May 2018 Lopez brought the instant separate action
against Jose Escamilla, alleging the following: Escamilla
incorporated Magnolia. He is the only shareholder, board
member, and officer the corporation has ever had. Only one
board meeting was ever held. Only Escamilla signed the
corporation’s checks. The corporation’s only capitalization was
$1,000 supplied by Escamilla. The corporation was suspended
and all of its cash was paid to Escamilla. Escamilla continues to
do business at the same location. Lopez requested that Escamilla
be found to be an alter ego of Magnolia.
Escamilla answered and moved for judgment on the
pleadings. The motion was based on the theory that the only
proper procedure for naming a person an alter ego is by motion in
the original action. Escamilla claimed that a request to find a
person an alter ego is not a cause of action and that a separate
lawsuit is barred by limitations. The trial court granted the
motion. We reverse.
DISCUSSION
I.
A motion for a judgment on the pleadings is in the nature
of a general demurrer. (Southern California Edison Co. v. City of
Victorville (2013) 217 Cal. App. 4th 218, 227.) We assume the
truth of all properly pleaded factual allegations. (Ibid.) The
motion is properly granted where the facts alleged in the
complaint show the defendant is entitled to judgment as a matter
of law. (Ibid.) Our review is de novo. (Ibid.)
Escamilla does not contest that the complaint states facts
sufficient to support a finding that he is the alter ego of the
corporation. He contends, however, that a complaint in a
separate action is not the proper procedure to obtain such a
determination. He argues that adding an alter ego defendant is
not a cause of action. (Citing, Hennessey’s Tavern, Inc. v.
American Air Filter Co. (1988) 204 Cal. App. 3d 1351, 1358-1359
[an alter ego defendant has no separate primary liability to
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plaintiff, and a claim against an alter ego defendant is not itself a
claim for substantive relief].)
It does not matter whether the petition alleging Escamilla
is an alter ego of the corporation is labeled a complaint or a
motion, or whether the petition is assigned a case number
different from the underlying action. The substantive question is
whether Escamilla is, in fact, an alter ego. “The law respects
form less than substance.” (Civ. Code, § 3528.) Either a
complaint or a motion is sufficient. (Highland Springs
Conference & Training Center v. City of Banning (2016) 244
Cal. App. 4th 267, 288 [“As an alternative to filing a section 187
motion to add a judgment debtor to a judgment, the judgment
creditor may file an independent action on the judgment, alleging
that the proposed judgment debtor was an alter ego of an original
judgment debtor”].)
Nor is the complaint barred by the statute of limitations. A
money judgment is enforceable for an initial period of 10 years
following entry of the judgment (Code Civ. Proc., § 683.020) and
may be renewed (Code Civ. Proc., § 683.110 et seq.). By adding
an alter ego defendant, the court is not entering a new judgment,
but merely inserting the correct name of the real defendant.
(NEC Electronics Inc. v. Hurt (1989) 208 Cal. App. 3d 772, 778.)
This may be done at any time. (Wells Fargo Bank, N.A. v.
Weinberg (2014) 227 Cal. App. 4th 1, 7; see also, Taylor v. Newton
(1953) 117 Cal. App. 2d 752, 757 [statutes of limitations on
substantive causes of action do not apply to proceedings to
declare alter ego].)
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DISPOSITION
The judgment is reversed. Costs are awarded to appellant.
CERTIFIED FOR PUBLICATION.
GILBERT, P. J.
We concur:
YEGAN, J.
TANGEMAN, J.
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Matthew P. Guasco, Judge
Superior Court County of Ventura
______________________________
Law Offices of Malcolm R. Tator and Malcolm R. Tator for
Plaintiff and Appellant.
Richard W. Tentler for Defendant and Respondent.