Subcontracting Concepts, LLC vs. Martin

If mandatory relief is granted, the court must “direct the attorney to pay reasonable compensatory legal fees and costs” to the opposing counsel or parties. (Code Civ. Proc., § 473, subd. (b).) The court may also order the offending attorney to pay monetary sanctions up to $1,000 to the opposing party, or up to $1,000 to the State Bar Client Security Fund, or “[g]rant other relief as is appropriate.” (Code Civ. Proc., § 473, subd. (c)(1).)

Defendants’ opposition to Plaintiff’s MSJ/MSA was due by 6/26/26. (Code Civ. Proc., § 437c, subd. (b)(2) [20 days before the 7/16/26 hearing date].) Defendants did not file their complete “corrected” opposition and supporting papers until 7/7/26. (ROA 162, 164, 166, 168.) Plaintiff filed its reply and objections on 7/9/26. (ROA 178, 180, 182, 183.)

The Court subsequently issued a tentative ruling declining to consider Defendants’ late opposition and granting the motion. At the hearing on 7/16/26, the Court indicated that Defendants should file a motion under Code Civil Procedure, section 473, subdivision (b) and continued the hearing for the summary judgment to 9/24/26. (ROA 188.)

The Court finds the motion was timely filed on 8/19/26. The motion is accompanied by a declaration from Defendants’ counsel containing a straightforward admission of fault for filing Defendants’ opposition late as well as an explanation of his mistakes. (Mailly Decl. ¶¶ 2-8.) The motion is also accompanied by a revised opposition and supporting papers, which were revised after the 7/16/26 hearing. (Mailly Decl. ¶ 10, Exs. A-D.)

Defendants have therefore established they are entitled to mandatory relief. However, Defendants may not file the revised opposition and supporting papers. Defendants filed a complete “corrected” opposition and supporting papers on 7/7/26 and Plaintiff filed its reply and objections on 7/9/26. Defendants have not explained why they should be given a third bite at the apple and further inconvenience Plaintiff and the Court.

The motion is granted. The Court accepts the opposition and supporting papers that were filed late on 7/7/26.

The parties should appear at the hearing prepared to discuss the amount of Plaintiff’s reasonable compensatory legal fees and costs.

11 22-01251948 Motion for Summary Judgment and/or Adjudication

Subcontracting Defendants’ motion for summary judgment is GRANTED. Concepts, LLC vs. Martin Defendants Estate of Albert Luongo (“Estate”) and Superior Courier & Logistics, LLC (“Superior”) move for summary judgment in their favor and against plaintiff Subcontracting Concepts, LLC (“Plaintiff”).

Defendants’ request for judicial notice is GRANTED.

Plaintiff and Defendants filed written objections. (See ROA 266 & 239.) The court declines to rule on the parties’ objections as none are numbered as required. (Cal. Rules of Court, rule 3.1354(b); see Hodjat v. State Farm Mutual Automobile Ins. Co. (2012) 211 Cal.App.4th 1, 9 [the court may decline to rule on objections not filed in conformity with the formatting rules nor is the court required to give a party a second chance at filing properly formatted objections].)

In addition, the court will not consider objections stated in Plaintiff’s response to Defendants’ separate statement (ROA 224) because they do not refer to specific evidentiary objections by objection number. (Cal. Rules of Court, rule 3.1354(b); see Hodjat, supra, 211 Cal.App.4th at p. 8.)

The court notes Defendants simultaneously filed two separate memorandums of points of authorities. One is attached to the notice of motion (ROA 218) and the other is separate document (ROA 212). Plaintiff contends this is grounds to strike the motion in its entirety but provides no legal basis for doing so. The court will disregard the memorandum attached to the notice.

Defendants argue they are entitled to summary judgment because Plaintiff cannot establish damages, Plaintiff has no evidence supporting alter ego or successor liability, the fraud claim fails because Plaintiff has no evidence fraudulent conduct by defendant Superior, and the declaratory relief claim fails because it is derivative of the failed indemnity and contract claims.

Legal Standard

“Summary judgment is proper where the evidence shows there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. To satisfy this burden, a defendant moving for summary judgment must establish that one or more of the elements of a cause of action cannot be established or that a complete defense exists to the cause of action. If the defendant meets this burden, the burden shifts to the plaintiff to show a triable issue of material fact exists as to either the particular cause of action or the proffered defense thereto.

The plaintiff may not rely on mere allegations or denials of the pleadings but instead must set forth specific facts demonstrating a triable issue of material fact exists.” (McCabe v. American Honda Motor Co. (2002) 100 Cal.App.4th 1111, 1119, citing Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 [cleaned up]; Code Civ. Proc., § 437c, subds. (c), (p)(2).) “There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar, supra, 25 Cal.4th at p. 850.)

A cause of action “cannot be established” if the undisputed facts presented by the defendant prove the contrary of the plaintiff’s allegations as a matter of law. (Brantley v. Pisaro (1996) 42 Cal. App.

4th 1591, 1597.) Alternatively, a moving defendant can show that a cause of action “cannot be established” by submitting evidence – such as discovery admissions and responses – that the plaintiff does not have and cannot reasonably obtain evidence to establish an essential element of his cause of action. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854-55; see also Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 590 [finding moving defendant may show plaintiff’s lack of evidence by factually devoid discovery responses after plaintiff has had adequate opportunity for discovery]; Scheiding v.

Dinwiddie Const. Co.(1999) 69 Cal.App.4th 64, 80-81 [finding Union Bank rule only applies where discovery requests are broad enough to elicit all such information].) “In ruling on the motion, the court must consider all of the evidence and all of the inferences reasonably drawn therefrom, and must view such evidence and such inferences, in the light most favorable to the opposing party.” (Aguilar, supra, 25 Cal.4th at p. 843 [cleaned up].) The court may not make credibility determinations or weigh the evidence, and all evidentiary conflicts must be resolved against the moving party. (McCabe, supra, 100 Cal.App.4th at 1119.)

The moving party’s papers are strictly construed, while the opposing party’s papers are liberally construed. (Ibid.)

Background and Summary of Allegations

On 3/28/22, plaintiff Subcontracting Concepts, LLC filed a verified complaint against defendants Romey J. Martin (“Martin”); Orange County Courier & Logistics, LLP (“OCC”); Superior Courier & Logistics (“Superior”), Joe Zepada (“Zepada”), and DOES 1 through 20. The operative verified first amended complaint, filed 4/28/22, alleges seven causes of action for (1) express indemnity against Martin; (2) equitable indemnity alleged against all defendants; (3) contribution alleged against all defendants; (4) declaratory relief alleged against all defendants; (5) breach of contract against OCC and Superior; (6) fraud alleged against all defendants; and (7) breach of the implied covenant of good faith and fair dealing against OCC only.

On 4/23/24, plaintiff filed amendments to the complaint identifying All Around Socal Courier LLP (“All Around”), Estate of Albert Luongo (the “Estate”) aka Albert David Luongo (“Luongo”), and Marilyn P. Martin as DOES 1-3, respectively. Martin is no longer an active defendant due to bankruptcy protections. (UMF 4.) Marilyn Martin has been dismissed. (UMF 5.)

Plaintiff alleges that it incurred attorney’s fees, costs, arbitration expenses, and other damages allegedly arising from the defense and resolution of a prior labor misclassification action. (UMF 2.) Plaintiff also alleges that Superior is liable under alter ego and successor liability theories. (UMF 3.)

More specifically, in the FAC, Plaintiff alleges OCC made a written agreement with Plaintiff (“Assignment Agreement”), dated 4/18/13, to

obtain access to Plaintiff’s payment processing services of independent owner/operators engaged by OCC to perform delivery services. (FAC, ¶ 9.) Martin signed a Personal Guarantee Form, dated 4/18/13. (FAC, ¶ 11.) In 2017, OCC and Plaintiff were sued in the prior action, which resulted in a significant monetary outlay by Plaintiff based on the actions of OCC and its managing agents/principals Martin and Zepada. (FAC, ¶¶ 12, 14.) Plaintiff alleges Martin is the President and owner of OCC and of Superior; Superior is an alter ego of Martin that is totally dominated by him; OCC was an alter ego of Martin; Defendants and DOE Defendants are alter egos of each other; and Superior is a successor business to OCC. (FAC, ¶¶ 3, 5, 16, 17, 19, 20.)

In the first cause of action, Plaintiff alleges Superior is wholly owned and dominated by Martin, and its assets and debts should be construed as being the same as Martin’s, including the indemnity owed to Plaintiff. (FAC, ¶ 26.) In the remaining causes of action alleged against Superior, Plaintiff alleges it is entitled to recover from Superior as the successor company of OCC. (FAC, ¶¶ 33, 35, 44, 54.)

Alter Ego Liability and Successor Liability

To establish alter ego liability, Plaintiff must prove two elements: (1) “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” and (2) “an inequitable result if the acts in question are treated as those of the corporation alone.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538, citing inter alia Automotriz etc. De California v. Resnick (1957) 47 Cal.2d 792, 796.)

In applying the doctrine, courts consider the following factors: 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, use of one as a mere shell or conduit for the affairs of the other inadequate capitalization, disregard of corporate formalities, lack of segregation of corporate records, and identical directors and officers. (Id. at pp. 538-539.) “No one characteristic governs, but the courts must look at all the circumstances to determine whether the doctrine should be applied.

Alter ego is an extreme remedy, sparingly used.” (Id. at p. 539 [cleaned up].)

For successor liability, a company acquiring the assets of another company “does not assume the seller’s liabilities unless (1) there is an express or implied agreement of assumption, (2) the transaction amounts to a consolidation or merger of the two corporations, (3) the purchasing corporation is a mere continuation of the seller, or (4) the transfer of assets to the purchaser is for the fraudulent purpose of escaping liability for the seller's debts.” (Ray v. Alad Corp. (1977) 19 Cal.3d 22, 28.)

The undisputed material facts establish the Assignment Agreement identifies OCC as the contracting party. (UMF 12.) The Personal Guarantee was executed by Martin individually. (UMF 14.) Superior is not identified as a signatory to the Assignment Agreement or the Personal Guarantee. (UMF 13, 15.)

In discovery, Plaintiff has asserted that Superior operated as an alter ego or successor entity of OCC and/or Martin. (UMF 16.) However, Plaintiff has failed to identify evidence supporting alter ego liability against Superior. (UMF 17, 33.) Namely, Plaintiff failed to produce evidence of commingling of funds, disregard of corporate formalities, assumption of liabilities by Superior, transfer of assets from OCC to Superior, or undercapitalization. (UMF 18-22.)

Nor has Plaintiff produced evidence supporting successor liability against Superior. (UMF 34.) Most importantly, Plaintiff has not produced evidence of the predicate acquisition or transfer of assets from OCC to Superior. (UMF 21.) Plaintiff has also not produced evidence of assumption of liabilities by Superior, fraudulent transfer, or Superior assumed obligations under the Assignment Agreement or Personal Guarantee. (UMF 20, 23, 35.)

Plaintiff contends it has produced evidence of alter ego and successor liability. Plaintiff points to evidence that Martin called Plaintiff’s Senior Vice President of Customer Relations, Dominick Simone, to solicit business on behalf of Superior and purported to exercise decision making authority on Superior’s behalf. (Plaintiff’s Response to UMF 17.) Plaintiff also relies on a report from a third party investigator who determined that Martin was “employed with/operating Superior Courier,” Superior was using phone numbers previously associated with OCC, and Martin can be reached at those numbers. (Plaintiff’s Response to UMF 17.)

These facts do not establish alter ego or successor liability. At most, they establish Martin once operated OCC, he was later employed by Superior with some decision making authority, and Superior uses phone numbers once associated with OCC. This evidence does not establish Martin’s ownership of Superior or a transfer/acquisition of assets (fraudulent or otherwise), assumption of liabilities, consolidation or merger of the two companies, or a mere continuation of OCC.

In fact, Plaintiff’s witness, Dominick Simone, confirms that Martin represented himself as an employee of Superior rather than an owner. Simone attests that Martin stated he was “working with the owner of [Superior] Albert Luongo” but that “he was not an owner of Superior just an employee.” (Simone Decl. ¶ 3.) Simone states the same in an email the same day to Plaintiff’s President, Pete Fidopiastis, confirming the call. (Simone Decl. ¶ 3, Ex. F.) While Simone attests that he did not believe Martin (Simone Decl., ¶ 3), he does not explain why he did not believe Martin. Further, Plaintiff submitted Superior’s Operating Agreement which identifies Luongo as Superior’s 100% member and does not attribute any ownership interest to Martin. (Fidopiastis Decl., Ex. A.) While the Operating Agreement is unsigned, it supports the conclusion that Martin was Superior’s employee and not its owner.

Plaintiff attempts to dispute Defendants’ material facts by asserting discovery has not yet concluded, and Defendants’ have failed to comply with their discovery obligations. Plaintiff complains that Defendants’

discovery responses have been deficient, they have failed to provide crucial evidence, and they have failed to admit or deny essential basic facts. (See Plaintiff’s Responses to UMF 17-22.) Even assuming this to be true, Plaintiff’s recourse was to meet and confer with Defendants and file discovery motions if necessary. Given this case has been ongoing since 2022, Plaintiff has had ample opportunity to do so. Plaintiff’s lack of diligence does not create triable issues of material fact.

Plaintiff’s reliance on its verified FAC as evidence to support alter ego and successor liability is unavailing. (See Plaintiff’s Response to UMF 33.) “[A] party cannot rely on the allegations of his own pleadings, even if verified, to make or supplement the evidentiary showing required in the summary judgment context.” (College Hosp., Inc. v. Sup.Ct. (Crowell) (1994) 8 Cal.4th 704, 720, fn. 7.)

As to the Estate, Plaintiff’s evidence only establishes Luongo owned Superior. There is no evidence he personally assumed OCC’s obligations, guaranteed Martin’s obligations, or received OCC assets to frustrate Plaintiff’s collection efforts, or made any representation to Plaintiff concerning the 2013 agreements.

Defendants have established there is no triable issue of material fact, and they are entitled to judgment as a matter of law. As each cause of action is based on alter ego and successor liability, the court need not address Defendants’ other arguments.

The motion is granted.