Relentless Air Racing, LLC v. Airborne Turbine Ltd. Partnership
222 Cal. App. 4th 811
| Cal. Ct. App. | 2013Background
- Relentless obtained a money judgment against Airborne Turbine Ltd. Partnership and cannot collect.
- Relentless moved to amend the judgment to add Wayne and Linda Fulton, Airborne ATI, and Paradise Aero as judgment debtors, asserting alter ego liability.
- The trial court found the Fulton entities were Airborne’s alter egos but denied amendment due to lack of an inequitable result.
- The trial court held Relentless failed to show an inequitable result if Airborne were treated as a separate entity.
- Relentless showed the Fultons controlled Airborne and related entities, with commingled finances and minimal corporate formalities.
- Airborne currently has no substantial assets, making collection unlikely absent post-judgment relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an inequitable result exists to pierce Airborne’s separate entity status | Relentless—inequitable result shown by asset transfer and commingling | Fultons contend no inequitable result without proof of improper intent or asset skimming | Yes; inequitable result shown; entities liable as debtors |
| Whether proof of wrongful intent is required to amend the judgment | Intent not required; inequitable result suffices | Requires showing intentional wrongdoing | No; intent not required; inequitable result governs |
| Whether Greenspan standard governs post-judgment alter ego addition | Greenspan supports adding debtors where alter ego proves inequity | Greenspan applicable but misapplied | Yes; Greenspan standard controls |
| Whether the court abused discretion in denying amendment based on underlying evidence | Evidence of control and unity supports amendment | Evidence insufficient to show inequitable result | No; abuse of discretion; amendment proper |
Key Cases Cited
- Greenspan v. LADT LLC, 191 Cal.App.4th 486 (Cal. Ct. App. 2010) (alter ego postjudgment liability; inequitable result suffices)
- Jines v. Abarbanel, 77 Cal.App.3d 702 (Cal. Ct. App. 1978) (alter ego relation; pretrial impact on judgment against professional corporation not required)
- Crawford v. Southern Pacific Co., 3 Cal.2d 427 (Cal. 1935) (plural inferences and trial court’s fact-finding deference)