Highland Springs Conference & Training Center v. City of Banning
199 Cal. Rptr. 3d 226
Cal. Ct. App.2016Background
- Highland Springs and Banning Bench (with two others) won CEQA challenges to the City of Banning’s approval of the 1,500‑acre Black Bench project; judgments and attorney‑fee awards (total ≈ $1,081,546) were entered in April–October 2008 against SCC/Black Bench, LLC (SCC/BB).
- SCC/BB defaulted on loans, lost the property in foreclosure by end of 2008, and later dissolved; SCC/BB did not oppose the fee motions and did not pay the awards.
- In October 2012 plaintiffs moved under Code Civ. Proc. § 187 to amend the 2008 judgments to add SCC Acquisitions, Inc. (SCCA) as an additional judgment debtor, alleging SCCA was SCC/BB’s alter ego and had controlled the CEQA litigation.
- Plaintiffs offered evidence of overlapping officers, use of the “SunCal” trade name by both entities, SCCA involvement in project negotiations and communications, and that SCCA owned ~65–70% of SCC/BB.
- SCCA defended as a separate parent/affiliate, explained industry practice of single‑purpose subsidiaries, and argued that plaintiffs unreasonably delayed and that it would be prejudiced (and denied due process) if added now.
- The trial court denied the § 187 motion solely because plaintiffs waited 4–6 years to move (relying on Alexander), finding lack of due diligence and presumed prejudice; this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the motion to amend §187 may be denied solely for plaintiff’s long delay | Delay alone should not defeat an equitable §187 amendment; defendant must prove prejudice | Delay justified denial; Alexander supports barring late amendment | Reversed: delay alone insufficient; defendant must prove laches/prejudice |
| Whether laches is a valid defense to a §187 motion | Even if delay exists, laches requires proof of prejudice; plaintiffs’ delay did not bar the claim | Laches bars the motion because plaintiffs waited 4+ years and circumstances changed | Court: laches may be asserted but SCCA failed to show affirmative prejudice; motion not barred by laches |
| Whether the trial court properly applied Alexander to deny amendment | Alexander is an outlier; it improperly permits denial without prejudice showing | Alexander supports denying where plaintiff unreasonably delayed | Court: Alexander is inconsistent with modern laches law and cannot justify denial here |
| Whether plaintiffs proved alter‑ego/control merits on the existing record | Plaintiffs presented substantial evidence of control/unity and inequity | SCCA denied unity and pointed to corporate formalities, separate finances, and industry norms | Remanded: trial court must decide the merits of alter‑ego claim on the record (control, unity, inequity) |
Key Cases Cited
- Alexander v. Abbey of the Chimes, 104 Cal.App.3d 39 (Cal. Ct. App.) (court reversed amendment solely for plaintiff delay)
- Miller v. Eisenhower Medical Center, 27 Cal.3d 614 (Cal. 1980) (laches requires unreasonable delay plus prejudice; burden on defendant)
- Relentless Air Racing, LLC v. Airborne Turbine Ltd. Partnership, 222 Cal.App.4th 811 (Cal. Ct. App.) (elements to add judgment debtor: control/virtual representation, unity of interest, inequity)
- Wells Fargo Bank, N.A. v. Weinberg, 227 Cal.App.4th 1 (Cal. Ct. App.) (§ 187 amendments are equitable proceedings that may be made to name the real defendant)
- Maguire v. Hibernia Savings & Loan Society, 23 Cal.2d 719 (Cal. 1944) (mere lapse of time, absent prejudice, does not bar equitable relief)