Shanghai Breeze Technology Company, Ltd. vs. Willard Marine, Inc.

“‘Amending a judgment to add an alter ego of an original judgment debtor “‘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.’”’” (Angel Lynn Realty, Inc. v. George (2025) 114 Cal.App.5th 655, 663 (Angel Lynn Realty).)

“‘“Usually, a disregard of the corporate entity is sought in order to fasten liability upon individual stockholders. . . .”’” (Toho-Towa Co., Ltd. v. Morgan Creek Productions, Inc. (2013) 217 Cal.App.4th 1096, 1107 (Toho-Towa).)

However, “[a] court may also disregard the corporate form in order to hold one corporation liable for the debts of another affiliated corporation when the latter ‘“is so organized and controlled, and its affairs are so conducted, as to make it merely an instrumentality, agency, conduit, or adjunct of another corporation.”’ [Citations.] Thus, where there is ‘such domination of finances, policies and practices that the controlled corporation has, so to speak, no separate mind, will or existence of its own and is but a business conduit for its principal’ [citation], the affiliated corporations may be deemed to be a single business enterprise, and the corporate veil pierced. ‘Under the “single business enterprise” doctrine, separate corporations may operate with integrated resources in pursuit of a single business purpose.’ [Citation.] ‘The “single-businessenterprise” theory is an equitable doctrine applied to reflect partnership-type liability principles when corporations integrate their resources and operations to achieve a commo n business purpose.’ [Citations.]” (Id. at pp. 1107- 1108.)

“In California, common principles apply regardless of whether the alleged alter ego is based on piercing the corporate veil to attach liability to a shareholder or to hold a corporation liable as part of a single enterprise. In both cases, ‘[t]he law as to whether courts will pierce the corporate veil is easy to state but difficult to apply.’ [Citation.] Because it is founded on equitable principles, application of the alter ego ‘is not made to depend upon prior decisions involving factual situations which appear to be similar. . . . “It is the general rule that the conditions under which a corporate entity may be disregarded vary according to the circumstances of each case.”’ [Citations.]

Whether the evidence has established that the corporate veil should be ignored is primarily a question of fact which should not be disturbed when supported by substantial evidence. [Citations.]” (Toho-Towa, supra, 217 Cal.App.4th at p. 1108.)

To prevail on a motion to amend a judgment to add a nonparty, “‘the judgment creditor must show, by a preponderance of the evidence, that “(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.”’”

“In determining whether there is a sufficient unity of interest and ownership, the court considers many factors, including ‘the commingling of funds and assets of the two entities, identical equitable ownership in the two entities, use of the same offices and employees, disregard of corporate formalities, identical directors and officers, and use of one as a mere shell or conduit for the affairs of the other. [Citation.]’ [Citation.] Inadequate capitalization of the original judgment debtor is another factor. [Citation.] 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. [Citation.]” (Highland Springs Conference Training Center v. City of Banning (2016) 244 Cal.App.4th 267, 280-281 (Highland Springs).)

An inequitable result is shown as a matter of law where the judgment debtor is insolvent due to the actions of an alter ego. (Relentless Air Racing, LLC v. Airborne Turbine Ltd. Partnership (2013) 222 Cal.App.4th 811, 816.)

“‘“Application of the alter ego doctrine does not depend upon pleading or proof of fraud.”’ [Citations.] It is enough that ‘adherence to the fiction of the separate existence of the corporation would promote injustice or bring about inequitable results.’ [Citation.]” (Angel Lynn Realty, supra, 114 Cal.App.5th at p. 1109, fn. 5.)

“Alter ego ‘is an extreme remedy, sparingly used.’ [Citation.] ‘“The standards for the application of alter ego principles are high, and the imposition of [alter ego] liability . . . is to be exercised reluctantly and cautiously.”’ [Citation.] Still, ‘“[t]he greatest liberality is to be encouraged”’ in allowing judgments to be amended to add the ‘real defendant,’ or alter ego of the original judgment debtor, ‘“in order to see that justice is done.”’ [Citations.]” (Highland Springs, supra, 244 Cal.App.4th at p. 281.)

Here, Petitioner failed to show GEM is the alter ego of Respondent. As to unity of ownership and interest, Petitioner relies solely on the fact GEM and Respondent have identical officers and directors and identical equitable ownership. Petitioner submitted evidence showing GEM owns 100% of Respondent and three of GEM’s principals are officers and directors of Respondent. (See Liberto Decl., Exhs. 6-7; Brown Decl. ¶5 [ROA 138].) Petitioner offers no other evidence of unity of interest and ownership such as comingling of funds, use of the same offices, disregard of corporate formalities, or use of one entity as a mere shell for the affairs of another.

As stated above, there is no one essential factor that must be established to satisfy this element; rather, it is a totality of the circumstances analysis. Here, the evidence of ownership, common officers and directors, and participation in the arbitration is not enough. Indeed, the court finds the evidence submitted by Petitioner insufficient to show such a unity of interest and ownership between GEM and Respondent that the separate personalities of the two no longer exist.

Petitioner also failed to present sufficient evidence demonstrating an inequitable result will follow if the acts complained of are treated as those of Respondent alone. For instance, no evidence is offered showing Respondent is undercapitalized and has no prospect of satisfying the judgment in this matter. Indeed, no financial information whatsoever is presented. Petitioner argues the judgment must be amended to avoid the inequitable result of GEM escaping liability for the judgment. But this argument presupposes GEM is the alter ego of Respondent, which has not been shown.

Petitioner also argues amendment of the judgment is necessary to avoid the inequitable result of Respondent’s evasion of enforcement of the judgment. As Respondent points out, “[d]ifficulty in enforcing a judgment or collecting a debt does not satisfy” the inequitable result element. (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 539.) “The alter ego doctrine does not guard every unsatisfied creditor of a corporation but instead affords protection where some conduct amounting to bad faith makes it inequitable for the corporate owner to hide behind the corporate form.” (Ibid.)

There evidence is not sufficient to establish an inequitable result.

Based on the foregoing, the motion is DENIED. Counsel for Respondent is ordered to give notice of this ruling.

14. Claim of Macedo 2025-01533149- Before the court is a motion for default and default judgment of forfeiture of $98,171 in U.S. Currency filed by petitioner The People of the State of California (Petitioner). As more fully set forth below, the Motion is GRANTED.

On or about August 30, 2025, $98,171 in United States currency was seized pursuant to Health and Safety Code section 11470, subdivision (f), for forfeiture for violation of Health and Safety Code sections 11351 and 11378. The petition in this case was brought pursuant to Health and Safety Code section 11470, et. seq. and was timely filed within one year of seizure. (Health & Safety Code, § 11488.4(a).)

Health and Safety Code section 11488.5, subdivision (a), grants any claimant to the property subject to forfeiture 30 days from the last publication of notice of the forfeiture proceedings or 30 days after receipt of actual notice to file a verified claim for the property. Section 11488.5, subdivision (b)(1), provides, “If at the end of the time set forth in subdivision (a) there is no claim on file, the court, upon motion, shall declare the property seized or subject to forfeiture pursuant to subdivisions (a) to (g), inclusive, of Section 11470 forfeited to the state.

In moving for a default judgment pursuant to this subdivision, the state or local governmental entity shall be required to establish a prima facie case in support of its petition for forfeiture. There is no requirement for forfeiture thereof that a criminal conviction be obtained in an underlying or related criminal offense.”

“Health and Safety Code section 11488.4 provides for three types of notice of forfeiture proceedings. [Citation.] First, a person from whom property is seized and who is named in a receipt for the seized property is entitled to service of process of the petition of forfeiture. (Health & Saf. Code, § 11488.4, subd. (c).) Second, notice of the seizure or of an intended forfeiture proceeding along with instructions for filing a claim is ‘to be served by personal delivery or by registered mail upon any person who has an interest in the seized property or property subject to forfeiture other than persons designated in a receipt issued for the property seized.’ (Id., § 11488.4, subd. (c).) Finally, notice of a forfeiture action must be published once a week for three consecutive weeks in a newspaper of general circulation in the county of seizure. (Id., § 11488.4, subd. (e).)”