Carolina Casualty Insurance v. L.M. Ross Law Group, LLP
212 Cal. App. 4th 1181
| Cal. Ct. App. | 2012Background
- The chapter 11 trustee appeals an amended judgment that added Ross personally as a judgment debtor, after the original judgment was against Ross Law Group, LLP for legal malpractice involving DEC and Carolina Casualty's coverage action.
- Carolina Casualty's policy excluded coverage where Ross owned more than 10 percent interest or controlled entities related to the claim, and DEC/its predecessor were owned or managed by Ross and the Ross Revocable Trust during the relevant periods.
- Ross Law Group reportedly dissolved in September 2006, before key events, settlements, and the cross-motions for summary judgment in the underlying coverage dispute.
- Carolina Casualty sought to amend the judgment after the DEC settlement to name Ross and the Trust (and later the L.M. Ross Professional Law Corporation) as judgment debtors; a bankruptcy stay was later involved.
- The trial court conducted a multi-stage analysis, ultimately granting the amendment to add Ross as a judgment debtor based on Ross’s active participation and control of the litigation and the dissolution of Ross Law Group, while denying the trust and the professional corporation as debtors.
- On appeal, the court upheld the amended judgment, rejected arguments about discovery denial, and held that the amendment did not conflict with corporate or LLP protections.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court properly amended the judgment to add Ross as a judgment debtor | Ross | Carolina Casualty | Amendment affirmed; within trial court's discretion |
| Whether Ross Law Group’s dissolution supports piercing or alter ego liability | Ross | Carolina Casualty | Substantial evidence supports dissolution and personal liability finding |
| Whether Corporations Code section 16306 shields Ross personally when LLP status ended | Ross | Carolina Casualty | Shield not applicable post-dissolution; liability may attach |
| Whether denial of discovery warrants reversal of the amended judgment | Ross | Carolina Casualty | No reversible error; discovery issue improperly raised or lacking prejudice |
Key Cases Cited
- Greenspan v. LADT LLC, 191 Cal.App.4th 486 (Cal. App. 2010) (amendment of judgment to add alter ego liability deemed equitable)
- Carr v. Barnabey’s Hotel Corp., 23 Cal.App.4th 14 (Cal. App. 1994) (equitable addition of true defendant when misnaming occurs)
- Hall, Goodhue, Haisley & Barker, Inc. v. Marconi Conf. Center Bd., 41 Cal.App.4th 1551 (Cal. App. 1996) (amendment of judgment; alter ego and related considerations)
- US Ecology, Inc. v. State of California, 129 Cal.App.4th 887 (Cal. App. 2005) (evidentiary review and standard for factual findings on appeal)
- Lopez v. Baca, 98 Cal.App.4th 1008 (Cal. App. 2002) (evidentiary rulings reviewed on appeal; forfeiture rules)