Case Number: VC066617 Hearing Date: July 24, 2018 Dept: SEC

MARISCOS BAHIA, INC. v. ACUICOLA ALESSTINA, INC.

CASE NO.: VC066617

HEARING: 07/24/18

JUDGE: LORI ANN FOURNIER

#6

TENTATIVE ORDER

Defendants MARIA ARIZMENDI and VICTOR ARIZMENDI’s motion for judgment on the pleadings is DENIED. CCP §438(b).

Plaintiff’s Request for Judicial Notice is GRANTED as to the existence of the documents, but not as to any hearsay statements contained therein. Evid. Code § 452

This collections action was filed by Plaintiff MARISCOS BAHIA, INC. on October 3, 2017. The relevant facts, as alleged, are as follows: “1. Defendants ordered from Plaintiff and Plaintiff delivered in good condition to Defendants seafood during the period of March 10, 2017 through March 21, 2017. 2. Defendants were sent (i) invoices; and (ii) statement of past due account balance. 3. Defendants currently owe Plaintiff $185,563.60 which is past due. 4. Defendants are obligated to pay amounts due upon receipt of statements.” (Complaint p.3.) Plaintiff’s Form Complaint asserts the following causes of action: (1) Breach of Contract; and (2) Common Counts.

Defendants move for judgment on the pleadings pursuant to CCP §430.10(e), (f), and (g).

First Cause of Action – Breach of Contract

Ordinarily, a corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations. [Citations.]” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538.) “In California, two conditions must be met before the alter ego doctrine will be invoked. First, there must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist. Second, there must be an inequitable result if the acts in question are treated as those of the corporation alone.” (Id.)

Among the factors to be considered in applying the doctrine are commingling of funds and other assets of the two entities, the holding out by one entity that it is liable for the debts of the other, identical equitable ownership in the two entities, use of the same offices and employees, and use of one as a mere shell or conduit for the affairs of the other. (Id., at 538-539.) Other factors include inadequate capitalization, disregard of corporate formalities, lack of segregation of corporate records, and identical directors and officers. (Id., at 539.) No one characteristic governs. The courts must look at the totality of the circumstances to determine whether the doctrine should be applied. (Id.)

Notwithstanding Defendants’ arguments to the contrary, Plaintiff is not required to prove that the individual defendants were/are the alter ego of the corporate defendant at the pleading stage, but merely to put Defendants on notice of the claims against them. Consequently, Plaintiff has adequately alleged the elements of alter ego in its Complaint. (See Complaint Att. 9.) As Plaintiff conducts discovery in this matter, it shall seek to learn the ultimate facts that are necessary to prevail on the alter ego doctrine. Plaintiff has alleged all that is required of it at the pleading stage. Whether alter ego has been established is a question of fact. (Jack Farenbaugh & Son v. Belmont Construction (1987) 194 Cal.App.3d 1023, 1033.) Further, whether the application of the doctrine is appropriate does not rest on whether the corporate entity should be disregarded for all purposes, but rather, “whether in the particular case presented and for purpose of such case justice and equity can best be accomplished.” (Kohn v. Kohn (1950) 95 Cal.App.2d 718.) Here, Plaintiff has sufficiently alleged alter ego for purposes of surviving demurrer.

In order to allege a breach of contract claim, Plaintiff must plead the contract, his performance, the defendant’s breach, and the resulting damage. (See Otworth v. Southern Pac. Transportation (1985) 166 Cal.App.3d 452, 458.) “If an action is based on a breach of written contract, the terms must be set forth verbatim in the body of the complaint or a copy of the contract must be attached and incorporated by reference.” (Id. at 459.) Alternatively, if the claim is based on a written contract then “a plaintiff may plead the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v. TIG Specialty Ins. Co., (2002) 29 Cal.4th 189, 198-199.)

The motion for judgment on the pleadings as to the first cause of action is denied. Plaintiff adequately alleges the legal effect of contract giving rise to this claim. (See Complaint p. 3.)

Second Cause of Action – Common Counts

“When a common count is used as an alternative way of seeking the same recovery demanded in a specific cause of action, and is based on the same facts, the common count is demurrable if the cause of action is demurrable. [Citations Omitted.]” (McBride v. Boughton (2004) 123 Cal.App.4th 379, 394.) Here, Plaintiff seeks the same relief under the same facts in its second cause of action as its first cause of action. Consequently, Defendant’s motion for judgment on the pleadings as to the second cause of action is denied for the reasons cited under the Court’s analysis as to Plaintiff’s first cause of action.