Wells Fargo Bank v. Weinberg CA4/2
227 Cal. App. 4th 1
| Cal. Ct. App. | 2014Background
- Wells Fargo sued the law corporation and Weinberg as guarantor for a 1997 line of credit; default occurred after 2008.
- Initial actions: demurrer to Weinberg’s guaranty; alleged writing via transcription of a tape recording; court sustained demurrer with leave to amend.
- Wells Fargo later amended pleadings; Weinberg again demurred; court granted judgment in Weinberg’s favor on the guaranty in 2010.
- After a summary judgment against the law corporation, Wells Fargo obtained a judgment against the corporation for $57,075.51.
- Wells Fargo sought to amend the judgment under CCP § 187 to add Weinberg as a judgment debtor under an alter ego theory; motion contested by Weinberg.
- Trial court found Weinberg as alter ego, dissolved the corporation, and continued the same practice; Weinberg appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does res judicata bar amendment under CCP § 187? | Wells Fargo and Weinberg debated; alteration of judgment post-judgment was barred if precluded. | Weinberg contends res judicata bars alter ego theory since issues were litigated or could have been raised earlier. | Res judicata does not bar amendment; alter ego is a separate remedy to enforce judgment. |
| Is there substantial evidence Weinberg is alter ego of the law corporation? | Evidence shows unity of interest, undercapitalization, misuse of corporate form, and commingling of funds. | No severable evidentiary basis tying Weinberg personally to the corporation’s debts. | There is substantial evidence of alter ego liability; court properly found unity of interest and inequitable result. |
| Was the CCP § 187 amendment appropriate to enforce judgment? | Amendment is an equitable tool to satisfy the judgment by piercing the corporate veil. | Amendment was improper or prejudicial due to delay or lack of timely evidence. | Amendment under CCP § 187 is appropriate to enforce the judgment and correct injustice. |
| Did Wells Fargo timely obtain necessary evidence and allow opportunity for evidence submission? | Plaintiff only needed to establish alter ego via post-judgment examination and submissions. | Weinberg contends the process was abused or evidence late; discovery and ex parte submissions were inadequate. | Trial court did not abuse discretion; substantial evidence supported the ruling and denial of ex parte evidence. |
Key Cases Cited
- Greenspan v. LADT LLC, 191 Cal.App.4th 486 (Cal. Ct. App. 2010) (amendments to judgment under CCP 187 permissible; distinguish substantive from procedural relief)
- NEC Electronics Inc. v. Hurt, 208 Cal.App.3d 772 (Cal. Ct. App. 1989) (alter ego evidence and procedural posture for judgments)
- Brenelli Amedeo, S.P.A. v. Bakara Furniture, Inc., 29 Cal.App.4th 1828 (Cal. Ct. App. 1994) (separate and distinct harms; judgment against corporation followed by alter ego action)
- Hennessey’s Tavern, Inc. v. American Air Filter Co., 204 Cal.App.3d 1351 (Cal. Ct. App. 1988) (alter ego elements and misuse of corporate form)
- Darley v. Ward, 28 Cal.3d 257 (Cal. 1980) (written guaranty and evidentiary considerations)
- Misik v. D’Arco, 197 Cal.App.4th 1065 (Cal. Ct. App. 2011) (alter ego and post-judgment procedures)