2020-05-05 – Lopez v. Escamilla, Appellate Case No. B300439

In this short but sweet published opinion, the Court of Appeal reiterates a tricky question of procedure relating to alter-ego defendants: “In petitioning the trial court to amend a judgment to add an alter ego defendant, must the plaintiff proceed by motion in the original action, or may plaintiff proceed by complaint in an independent action on the judgment? Either procedure will do.” Lopez at *1.

Facts

In May 2012, plaintiff Lopez obtained a judgment against Magnolia Home Loans, Inc. for approximately $150,000.

In May 2018, Lopez brought a separate lawsuit against defendant Escamilla, alleging that he was and always has been the alter ego of Magnolia, such that he should be added to her judgment against Magnolia.

In response, Escamilla filed a Motion for Judgment on the Pleadings, arguing that the only way for him to be added to the Magnolia judgment was by motion in the original action, that there is no cause of action permitting an individual to be added as an alter-ego to a judgment, and that the applicable SOL barred Lopez’s claims against him. The trial granted the motion, but this Court of Appeal reversed.

Analysis

The Lopez Court reviewed the trial court’s MJOP ruling de novo. Southern California Edison Co. v. City of Victorville (2013) 217 Cal.App.4^th 218, 227.

Escamilla argued that a request to add an individual as an alter-ego defendant to a judgment is not a separate cause of action, citing Hennessey’s Tavern, Inc. v. American Air Filter Co. (1988) 204 Cal.App.3d 1351, 1358-59).

The Lopez Court disagreed, citing to caselaw whereby “[e]ither a complaint or a motion is sufficient… ‘to add a judgment debtor to a judgment….’” Lopez at *3 (quoting Highland Springs Conference & Training Center v. City of Banning (2016) 244 Cal.App.4^th 267, 288 [internal citations omitted]). The Lopez Court further cited to C.C.P. § 187, whereby Courts with jurisdiction over a claim generally are empowered to adopt “any suitable process or mode of proceeding” within the “spirit of the Code” to resolve any issue “if the course of proceeding be not specifically pointed out by this Code or the statute….”

The Lopez Court next concluded that the SOL did not bar adding Escamilla to the judgment because the SOL on the original claims did not apply to him. “By adding an alter ego defendant, the court is not entering a new judgment, but merely inserting the correct name of the real defendant[, which] may be done at any time.” Lopez at *3 (citing NEC Electronics Inc. v. Hurt (1989) 208 Cal.App.3d 772, 778; Wells Fargo Bank, N.A. v. Weinberg (2014) 227 Cal.App.4^th 1, 7; Taylor v Newton (1953) 117 Cal.App.2d 752, 757).