Filed 4/25/14 Target Media Partners v. Hartford Financial Services CA2/8

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

TARGET MEDIA PARTNERS, LLC,

Cross-complainant and Appellant,

v.

HARTFORD FINANCIAL SERVICES 

GROUP, INC.,

Cross-defendant and Respondent.

 B248293

 (Los Angeles County

 Super. Ct. No. BC456150)

APPEAL from a judgment of the Superior Court of Los Angeles County, Teresa 

Sanchez-Gordon, Judge. Affirmed.

Hathaway Perrett Webster Powers Chrisman & Gutierrez, Joel Mark and Brook J. 

Carroll for Cross-complainant and Appellant.

Berger Kahn, Ann K. Johnston and Ted A. Smith for Cross-defendant and 

Respondent.

* * * * * *
2

Defendant and Cross-complainant Target Media Partners, LLC (Target Media) 

appeals a judgment following the granting of a demurrer and dismissal of its crosscomplaint against The Hartford Financial Services Group, Inc. (Hartford Financial 

Services), without leave to amend. We affirm.

BACKGROUND

At all relevant times, Trend Offset Printing Services, Inc. (Trend Offset) (a Texas 

company, and not a party to the current litigation or appeal) operated a printing business. 

Trend Offset purchased a liability insurance policy from Hartford Insurance Company of 

the Midwest (Hartford of the Midwest).

Specialty Marketing Corporation, Inc. (Specialty Marketing), doing business as

Truck Market News (not a party to the current litigation or appeal) produces a monthly 

“magazine” publication distributed for free in racks at truck stops throughout the central 

and eastern parts of the United States. Specialty Marketing entered a contract with Trend 

Offset to print thousands of copies of Truck Market News at Trend Offset’s printing 

facility in Texas.

Specialty Marketing also entered into a contract with Target Media, a Nevada 

corporation with its principal place of business operations in Southern California, to 

physically distribute copies of Truck Market News (printed by Trend Offset) to truck 

stops.

In 2007, Specialty Marketing sued Target Media in Alabama state court. In that 

action, Specialty Marketing alleged that Target Media, instead of distributing copies of 

Truck Market News, simply threw the printed copies of the publication in the trash. Tort 

and contract-related claims were alleged. An Alabama jury awarded roughly $1 million 

in compensatory damages and a like amount in punitive damages in favor of Specialty 

Marketing and against Target Media. The Alabama Supreme Court eventually affirmed 

the judgment in part (as to the contract claims) and reversed in part (as to tort claims).

Meanwhile, in 2009, Specialty Marketing filed an action against Trend Offset in 

the Orange County Superior Court. In its California state action, Specialty Marketing 

alleged claims paralleling those it had alleged in its Alabama state action against Target 
3

Media. In broad terms, Specialty Marketing alleged that Trend Offset failed to ensure 

that Target Media properly distributed Truck Market News. In October 2010, Specialty 

Marketing and Trend Offset settled the Orange County action for a confidential amount.

In February 2011 (as amended April 2012), Hartford of the Midwest filed the lead 

action giving rise to Target Media’s cross-complaint here, asserting claims against Target 

Media for comparative equitable indemnity and comparative contribution (the 

subrogation action). Hartford of the Midwest alleged it paid the settlement to Specialty 

Marketing on behalf of Trend Offset in the Orange County action, but that all or part of 

that money should be shared by Target Media because Target Media had been the one 

that threw the copies of Truck Market News in the trash.

Target Media sought to file a cross-complaint in the subrogation action against 

“The Hartford Insurance Company” for breach of contract and breach of the covenant of 

good faith and fair dealing based on an insurance policy it had with that Hartford entity. 

Hartford of the Midwest opposed the motion in part because the cross-complaint against 

“The Hartford Insurance Company” was not seeking recovery from the proper party. 

Based on the declarations page from Target Media’s insurance policy, Hartford of the 

Midwest argued Target Media was insured by Hartford Fire Insurance Company 

(Hartford Fire), a related, but distinct entity. In response, Target Media argued it 

purchased insurance from “The Hartford Insurance Group,” designated with the trade 

name “The Hartford.” The trial court granted the motion and permitted Target Media to 

file the cross-complaint against “The Hartford Insurance Company.”

Hartford Fire moved to quash service of the summons for the cross-complaint 

because no entity named “The Hartford Insurance Company” existed and Hartford Fire 

issued Target Media’s insurance policy.1 The trial court granted the motion and Target 

Media filed its operative first amended cross-complaint.

1

In this motion, Hartford Fire acknowledged the attorney for Hartford of the 

Midwest inadvertently omitted “of the Midwest” in the name of the plaintiff bringing the 

subrogation action. The error was corrected to name “Hartford Insurance Company of 

the Midwest” as the plaintiff.
4

In the first amended cross-complaint, Target Media maintained its claims for 

breach of contract and breach of the covenant of good faith and fair dealing, but named 

the following Hartford-related entities as cross-defendants: Hartford Financial Services, 

Hartford Fire, and Hartford of the Midwest. The cross-complaint alleged Hartford 

Financial Services was “a corporation organized and existing under the laws of the State 

of Connecticut and authorized through various of its subsidiaries to transact, and 

transacting, business in the State of California as a liability insurer.” Target Media 

alleged it was insured by Hartford Financial Services’ subsidiary Hartford Fire, and 

Trend Offset was insured by Hartford Financial Services’ subsidiary Hartford of the 

Midwest. But “[d]ue to the unity of interest among all three of the Hartford-related 

insuring entities, and due to the fact that all three owed the same duties to an insured of 

their related entities and collective enterprise, [Target Media], the three Hartford-related 

cross-defendants are collectively hereinafter referred to as ‘Hartford.’” Likewise, “at all 

times herein mentioned each of the cross-defendants was the agent and employee of each 

of the remaining cross-defendants, and in doing the things alleged herein, was acting 

within the scope and course of such agency and employment.”

By alleging all these Hartford companies were subsidiaries acting together, Target 

Media set up its primary allegations that “Hartford,” Trend Offset, and Specialty 

Marketing entered into secret settlement negotiations in the Orange County action to set 

up the subrogation claim by “Hartford” against its own insured, Target Media. Target 

Media also alleged “Hartford” wrongfully refused to defend it in the subrogation action 

and wrongfully denied insurance coverage for that action.

Hartford Fire answered the cross-complaint, while Hartford Financial Services and 

Hartford of the Midwest filed demurrers, arguing neither was a party to Target Media’s 

insurance policy and the factual allegations regarding the interrelationship of the Hartford 

companies were insufficient to create liability. The trial court sustained the demurrers 

without leave to amend and entered judgment in favor of those parties. Target Media 
5

appealed the judgment as to both entities.2 We previously dismissed the appeal as to 

Hartford of the Midwest, so we confine our review to Target Media’s appeal of the 

judgment in favor of Hartford Financial Services.3

DISCUSSION

1. Legal Standard

We review the trial court’s granting of the demurrer de novo to determine whether, 

as a matter of law, the complaint alleges a valid cause of action. (Jenkins v. JPMorgan 

Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 506 (Jenkins).) We assume the truth of 

all properly pleaded and judicially noticeable material facts, but we will not assume the 

truth of contentions, deductions, or conclusions of law. (Ibid.) If the complaint fails to 

state a claim, the plaintiff bears the burden to demonstrate that there is a reasonable 

possibility the defects can be cured by amendment. (Id. at pp. 506-507.)

2. Judicial Notice

Target Media requests judicial notice of a motion in limine and opposition filed in 

the Orange County action and the Alabama Supreme Court’s opinion in the Alabama 

case. We grant this request. (Evid. Code, § 452, subd. (d); Szetela v. Discover Bank 

(2002) 97 Cal.App.4th 1094, 1098.) Hartford Financial Services requests judicial notice 

of the registration of the service mark “The Hartford” with the United States Patent and 

Trademark Office; the declaration pages from Target Media’s insurance policies; and a 

document entitled “Legal Notice,” which Hartford Financial Services printed from the 

2 On Target Media’s request, the trial court stayed the proceedings in light of the 

appeal.

3 We dismissed the appeal of the judgment in favor of Hartford of the Midwest 

under the “one final judgment” rule because the main subrogation action by Hartford of 

the Midwest remained pending. Nothing between Target Media and Hartford Financial 

Services remains pending after dismissal of the cross-complaint against Hartford 

Financial Services, so we may review that judgment. (CAZA Drilling (California), Inc. v. 

TEG Oil & Gas U.S.A., Inc. (2006) 142 Cal.App.4th 453, 464.) In light of our dismissal 

of the appeal as to Hartford of the Midwest, we decline Target Media’s invitation to 

review any issues related to Hartford of the Midwest in this appeal.
6

Web site <http://www.thehartford.com/legal-notice>. We grant the request with regard 

to the service mark registration (Evid. Code, § 452, subd. (c)) and the policy declaration 

pages (Evid. Code, § 452, subd. (h)). We deny the request with regard to the “Legal 

Notice” document because it is not reasonably beyond dispute. (Fremont Indemnity Co. 

v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113.)

3. Analysis

Target Media concedes that, as a stranger to the insurance contract between Target 

Media and Hartford Fire, Hartford Financial Services cannot be liable for its breach. 

(Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 576; Henry v. Associated Indemnity 

Corp. (1990) 217 Cal.App.3d 1405, 1416-1417.) Target Media attempts to impose 

liability on Hartford Financial Services by arguing it can be considered Target Media’s 

insurer under one of three theories: alter ego/unity of interest, agency, or joint venture.4 

In support of these theories, Target Media alleged the Hartford entities shared a “unity of 

interest,” “owed the same duties to the insured,” and were agents of each other. These 

were all legal conclusions the trial court was free to disregard in ruling on the demurrer. 

(Jenkins, supra, 216 Cal.App.4th at p. 506.) The only fact alleged in the cross-complaint 

related to these theories was the parent/subsidiary relationship among the Hartford 

entities. Generally, “[a] parent corporation is not liable on the contract or for the tortious 

acts of its subsidiary simply because it is a wholly owned subsidiary. Some other basis of 

liability must be established. ‘Stock ownership alone is not enough.’ [Citation.]” 

(Northern Natural Gas Co. v. Superior Court (1976) 64 Cal.App.3d 983, 991 (Northern 

Natural Gas); see United States v. Bestfoods (1998) 524 U.S. 51, 61 [“It is a general 

principle of corporate law deeply ‘ingrained in our economic and legal systems’ that a 

parent corporation (so-called because of control through ownership of another 

4 Target Media did not argue either an alter ego or joint venture theories in 

opposition to Hartford Financial Services’ demurrer. At least with respect to the alter ego 

theory, Hartford Financial Services argues Target Media forfeited that argument. We 

will assume these theories have not been forfeited because they fail on the merits.
7

corporation’s stock) is not liable for the acts of its subsidiaries.”].) With that fundamental 

principle in mind, we turn to Target Media’s specific theories of joint liability.

A. Alter Ego

“The alter ego doctrine arises when a plaintiff comes into court claiming that an 

opposing party is using the corporate form unjustly and in derogation of the plaintiff’s 

interests.” (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 300.) Although the 

application of the alter ego doctrine depends on the circumstances of each case, two 

general requirements exist: (1) a “‘unity of interest and ownership that the separate 

personalities of the corporation and the individual no longer exist’” and (2) “‘if the acts 

are treated as those of the corporation alone, an inequitable result will follow.’” (Ibid.) 

“And ‘only a difference in wording is used in stating the same concept where the entity 

sought to be held liable is another corporation instead of an individual.’ [Citation.]” 

(Ibid.) In the context of a parent/subsidiary relationship, “‘[t]he corporate entity of the 

wholly owned subsidiary will be disregarded only when recognition of the separate 

entities of parent and subsidiary would produce fraud or injustice. [Citation.] Bad faith 

in one form or another must be shown before the court may disregard the fiction of 

separate corporate existence [citations].’ [Citations.]” (Westinghouse Electric Corp. v. 

Superior Court (1976) 17 Cal.3d 259, 274.) “Alter ego is an extreme remedy, sparingly 

used.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 539

(Sonora).)

Alter ego may be shown through a host of factors. (Greenspan v. LADT LLC 

(2010) 191 Cal.App.4th 486, 512-513 [listing 14 nonexhaustive factors].) We need not 

recount them all because Target Media invokes only Hartford Financial Services’ 

common ownership and control of Hartford Fire and Hartford of the Midwest. These 

facts are merely incidents of a parent/subsidiary relationship and do not demonstrate alter 

ego. (Dos Pueblos Ranch & Imp. Co. v. Ellis (1937) 8 Cal.2d 617, 621 [“‘[T]he mere 

circumstances that all of the capital stock of a corporation is owned or controlled by one 

or more persons, does not, and should not, destroy its separate existence; were it 

otherwise, few private corporations could preserve their distinct identity, which would 
8

mean the complete destruction of the primary object of their organization.’”]; Meadows v. 

Emett & Chandler (1950) 99 Cal.App.2d 496, 499 [“‘Mere ownership of all the stock and 

control and management of a corporation by one or two individuals is not of itself 

sufficient to cause the courts to disregard the corporate entity. [Citations.]’”].)

Target Media further argues Hartford Financial Services acted in bad faith when it 

“manipulated its subsidiaries to [Target Media’s] detriment, causing Hartford . . . of the 

Midwest to settle the Trend [Offset] claim in bad faith, and manipulating the settlement 

to set up a subrogation claim against [Target Media].” Yet, Target Media did not allege 

Hartford Financial Services manipulated the corporate parent/subsidiary structure when 

entering the alleged secret settlement with Specialty Marketing in order to commit any 

fraud on Target Media. (Sonora, supra, 83 Cal.App.4th at p. 538 [“The alter ego doctrine 

prevents individuals or other corporations from misusing the corporate laws by the device 

of a sham corporate entity formed for the purpose of committing fraud or other 

misdeeds.”]; Laird v. Capital Cities/ABC, Inc. (1998) 68 Cal.App.4th 727, 742 (Laird) 

[“To put it in other terms, the plaintiff must show ‘specific manipulative conduct’ by the 

parent toward the subsidiary which ‘relegate[s] the latter to the status of merely an 

instrumentality, agency, conduit or adjunct of the former . . . .’ [Citation.]”], disagreed 

with on another ground in Reid v. Google, Inc. (2010) 50 Cal.4th 512, 524.)

Nor do we see any inequity in Target Media being unable to sue Hartford 

Financial Services for breaching an insurance policy Target Media obtained from 

Hartford Fire. Hartford Fire answered the cross-complaint and remains a crossdefendant, so Target Media may yet recover for its claims against the entity that actually 

issued the policy Target Media claims was breached.

5

 If anything, the inequities counsel 

against requiring that Hartford Financial Services answer Target Media’s claims for 

breaching an insurance policy it did not issue in the absence of even the faintest hint it 

5 Hartford Fire moved for summary judgment on the coverage issues raised in the 

cross-complaint, but apparently that motion remains pending in light of the trial court’s 

stay of the case.
9

did anything to jeopardize the corporate separateness of the subsidiary that actually 

issued the policy. (See Laird, supra, 68 Cal.App.4th at p. 742 [finding risk plaintiff 

would lose her lawsuit in the absence of an alter ego finding was not inequitable, but it 

would be inequitable “to impose liability on a defendant who has none as a matter of 

law”].)

In its reply brief, Target Media claims it could amend its cross-complaint to 

sufficiently allege an alter ego theory, but then fails to identify any facts it would add if 

given the opportunity to do so. Thus, Target Media has not carried its burden to 

demonstrate a reasonable possibility it could amend the cross-complaint to state a claim. 

Thus, the trial court properly sustained the demurrer on this basis.

B. Agency

“‘An agent “is anyone who undertakes to transact some business, or manage some 

affair, for another, by authority of and on account of the latter, and to render an account 

of such transactions.” [Citation.]’” (Violette v. Shoup (1993) 16 Cal.App.4th 611, 620.) 

“However, to establish a parent corporation’s liability for acts or omissions of its 

subsidiary on an agency theory, a plaintiff must show more than mere representation of 

the parent by the subsidiary in dealings with third persons. The showing required is that 

‘a parent corporation so controls the subsidiary as to cause the subsidiary to become 

merely the agent or instrumentality of the parent[.]’ [Citations.]” (Laird, supra, 68 

Cal.App.4th at p. 741.)

As we have already pointed out, Target Media’s allegation that the Hartford 

entities were agents of each other was a legal conclusion the trial court was free to 

disregard, and the Hartford entities’ parent/subsidiary relationship alone was insufficient 

to show joint liability. Target Media offers additional facts that, in its view, show an 

agency relationship, namely: a close financial connection among the Hartford entities; 

ownership of common stock; use of the same website for policyholder services and for 

marketing common products; use of the same marketing materials; use of the same 

physical address; and Hartford Financial Services’ ability to dictate coverage of its 

subsidiaries.
10

None of these facts demonstrates activity beyond that in a typical 

parent/subsidiary relationship. (Sonora, supra, 83 Cal.App.4th at p. 541 [“The 

relationship of owner to owned contemplates a close financial connection between parent 

and subsidiary and a certain degree of direction and management exercised by the former 

over the latter.”].) Even if Hartford Financial Services reported Hartford Fire’s earnings 

as a part of its total earnings and shared common stock with its subsidiaries, that is 

common in a parent/subsidiary relationship. (Sonora, supra, at pp. 549-550; Northern 

Natural Gas, supra, 64 Cal.App.3d at p. 991.) Further, Target Media cites no cases 

finding the subsidiary’s use of the parent company’s website, marketing materials, and 

physical address rises to the level of control sufficient to create an agency relationship 

between a parent and subsidiary.

Target Media further argues Hartford Fire used Hartford Financial Services’ logo 

on policy documents, suggesting Hartford Financial Services gave Hartford Fire authority 

to enter into dealings with third persons. But Target Media’s premise is flawed because 

the judicially noticeable service mark registration for the logo reflects it was registered to 

Hartford Fire, not Hartford Financial Services. Even if Hartford Financial Services 

owned the logo, “the mere appearance of a parent’s logo on its subsidiary’s documents

[is] insufficient to prove the existence of a single entity” for agency purposes. (BBA 

Aviation PLC v. Superior Court (2010) 190 Cal.App.4th 421, 434-435.)

Finally, Target Media cites statements on Hartford Financial Services’ website to 

show a close financial connection among the Hartford entities and Hartford Financial 

Services’ ability to dictate coverage. As alleged in the cross-complaint, Hartford 

Financial Services’ website indicated it is “‘a leading provider of insurance and wealth 

management services to millions of consumers and businesses worldwide.’” According 

to Target Media, one service Hartford Financial Services provided through Hartford Fire 

and Hartford of the Midwest was the commercial general liability insurance policy issued 

to Target Media as shown by the statement on the website that “‘[a]ll Hartford coverages 

and services described on this page may be offered by one or more of the property and 

casualty insurance company subsidiaries of The Hartford Financial Services Group, 
11

Inc.’” Neither one of those statements says anything about Hartford Financial Services’ 

financial connection to its subsidiaries or its ability to dictate coverage. And even if they 

did, a parent’s setting of policies and procedures of a subsidiary is appropriate in a 

parent/subsidiary relationship. (Sonora, supra, 83 Cal.App.4th at p. 551.)

Because all of Target Media’s proposed additional facts are consistent with a 

parent/subsidiary relationship, Target Media has not demonstrated a reasonable 

possibility it could amend its cross-complaint to allege Hartford Financial Services’ 

liability on an agency theory. The demurrer was properly sustained on this basis.

C. Joint Venture

“‘There are three basic elements of a joint venture: the members must have joint 

control over the venture (even though they may delegate it), they must share the profits of 

the undertaking, and the members must each have an ownership interest in the 

enterprise.’ [Citations.]” (Jeld-Wen, Inc. v. Superior Court (2005) 131 Cal.App.4th 853, 

872.) “‘Such a venture or undertaking may be formed by parol agreement [citations], or 

it may be assumed as a reasonable deduction from the acts and declarations of the parties 

[citations].’ [Citation.] Whether a joint venture actually exists depends on the intention 

of the parties. [Citations.]” (April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 

819.)

Target Media rests its joint venture allegations on essentially the same facts as its 

other theories, albeit fitting them into the joint venture requirements: the Hartford 

entities share a common business of selling Hartford-branded insurance; Hartford 

Financial Services controls its subsidiaries through standardized insurance policies; the 

Hartford entities had an understanding they would share profits and losses, as shown by 

the joint financial reports; and the Hartford entities exercised joint control over their 

common business. As with the alter ego and agency theories, these allegations fail 

because they show nothing more than a standard parent/subsidiary arrangement. If we 

were to hold otherwise, we would transform every parent/subsidiary relationship into a 

joint venture, exposing the parties to significant unanticipated liability. Target Media has 
12

not shown a reasonable possibility it could allege any other facts to demonstrate a joint 

venture, so the demurrer was properly sustained on this basis.

6

DISPOSITION

The judgment is affirmed. Respondent is awarded costs on appeal.

FLIER, J.

WE CONCUR:

RUBIN, ACTING P. J.

KUSSMAN, J.*

6 Target Media includes additional arguments in its opening brief on the merits of 

its breach of contract claim and a potential defense based on joint liability. We need not 

consider these irrelevant points.

*

Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to 

article VI, section 6 of the California Constitution.