Case ID: f-appx_543/html/0737-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CENTURY SURETY COMPANY, an Ohio corporation, Plaintiff-Appellee, v. BELMONT SEATTLE, LLC, a California limited liability company, and Marwan and Jacqueline F. Bahu, husband and wife, and their marital community, Defendants-Appellants.
    No. 13-35039.
    United States Court of Appeals, Ninth Circuit.
    Argued and Submitted Oct. 8, 2013.
    Filed Oct. 25, 2013.
    Dana Andrew Ferestien, Williams Kast-ner & Gibbs, PLLC, James L. Robenalt, Williams Kastner, Seattle, WA, for Plaintiff-Appellee.
    Todd Christopher Hayes, Gregory Louis Har, Harper Hayes, PLLC, Seattle, WA, Matthew Kermutt, Esquire, Angelia D. Wesch, Esquire, Phillips Wesch Burgess, Olympia, WA, for Defendants-Appellants.
    Before: TASHIMA, GRABER, and MURGUIA, Circuit Judges.
   MEMORANDUM

Century Surety Company (“Century”) sued Belmont Seattle, LLC (“Belmont”), and two of its partners, Marwan and Jacqueline F. Bahu, seeking a declaration that it had no duty to defend Belmont and the Bahus in a civil suit alleging construction defects in condominium units Belmont had converted from rental units and subsequently sold. Century had issued a liability insurance policy that Belmont asserts covered the units it sold. Whether any of the units were covered by the policy — and whether Century had a duty to defend— depends on whether Belmont had ever “rented” any of the units or “held [them] for rental” while the policy was in effect. The district court determined that Westm-oore Management, LLC (“Westmoore”), a partner in Belmont that was also responsible for managing the rental tenancies of units prior to their conversion and sale, “stood in the shoes of Belmont.” On this basis it found that Belmont had “rented” the units or “held [them] for rental,” and so granted summary judgment to Century. However, on this record, at the summary judgment stage, it was not appropriate to reach the conclusion that Westmoore “stood in the shoes of Belmont.”

There is no dispute that Belmont and Westmoore have always been legally distinct entities; what is disputed is whether the district court should have disregarded that distinction. Under governing California law, “ ‘the corporate form will be disregarded only in narrowly defined circumstances and only when the ends of justice so require.’ ” Zoran Corp. v. Chen, 185 Cal.App.4th 799, 110 Cal.Rptr.3d 597, 606 (2010) (quoting Mesler v. Bragg Mgmt. Co., 39 Cal.3d 290, 216 Cal.Rptr. 443, 702 P.2d 601, 607 (1985)). Summary judgment based on disregard of the corporate form is typically not appropriate, because “[w]hether a party is liable under an alter-ego theory is normally a question of fact.” Id. (citing Las Palmas Assocs. v. Las Palmas Ctr. Assocs., 235 Cal.App.3d 1220, 1 Cal.Rptr.2d 301, 317 (1991)). Depending on the circumstances, many factors may potentially be considered, and “ ‘[n]o single factor is determinative.’ ” Id. at 607 (quoting Virtualmagic Asia, Inc. v. Fil-Cartoons, Inc., 99 Cal.App.4th 228, 121 Cal.Rptr.2d 1, 13 (2002)). The district court based its conclusion seemingly exclusively on language in a deed transferring the property at issue to Belmont from a joint venture that included Westmoore as a member. The deed states that a “mere change in identity or form” distinguishes Belmont from the joint venture it succeeded. This single document by itself is not sufficient to prove that Belmont is Westm-oore’s alter ego, and the record is unclear as to whether other potentially relevant factors would support or undermine the district court’s conclusion. See id. at 606-07. Because it may not be possible to impute Westmoore’s activity to Belmont, it is not an indisputable fact that Belmont “rented” the condominium units it later sold or “held them for rental.” Summary judgment may very well be appropriate on a more developed record, but it was not appropriate on this one.

Both Belmont and the Bahus noticed appeal, but the Bahus failed to file any briefing, nor did they join Belmont’s briefing. Consequently, their appeal is not properly before this court. See General Order 2.3(a).

We REVERSE the district court’s order granting summary judgment to Century as to Belmont and REMAND for further proceedings. We DISMISS the Bahus’ appeal. 
      
       This disposition is not appropriate for publication and is not precedent except as provided by 9 th Cir. R. 36-3.
     
      
      . Because Belmont is a California limited liability company, Washington state law requires courts to apply California law with regard to "its organization and internal affairs and the liability of its members and managers.” Wash. Rev.Code § 25.15.310(l)(a).