1 Filed 10/15/14 Lloyd v. Martinez CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 FOURTH APPELL ATE DISTRICT DIVISION TWO

TERRY LLOYD, Plaintiff and Appellant,

v. RICK MARTINEZ et al., Defendants and Respondents. E057370 (Super.Ct.No . CIVSS814054)
OPINION

APPEAL from the Superior Court of San Bernardino County. David Cohn, Judge. Affirmed. Aviles & Associates and Moises A. Aviles for Plaintiff and Appellant. No appearance for Defendants and Respondents.
INTRODUCTION Plaintiff and appellant Terry S. Lloy d sued defendants Rick Martinez, David Perez, and Donta Montgomery for breach of contract for the sale of a share of undeveloped real property in Devore. Wh en defendants failed to respond to the2 complaint, Lloyd obtained th eir default and subsequently obtained a default judgment, which rescinded the contract and terminated de fendants’ interests in the property. After unsuccessful attempts to enfo rce the judgment against defendants and to remove them from the title to the property, Lloyd moved to amend the judgment to name as a judgment debtor RDD, Inc., a corporat e entity behind which defendants alle gedly were hiding from enforcement of the judgment. The trial c ourt expressed concerns that the default judgment quieted title to the pr operty without the court firs t having conducted a prove-up hearing, and it denied the motion b ecause RDD, Inc., does not exist. Lloyd appeals contending the trial cour t erred by denying the motion, thereby permitting defendants to thwart enforcem ent of the judgment, and incorrectly characterized Lloyd’s cause of action as one to quiet title. The tr ial court lacked the authority to amend Lloyd’s default judgment, c onsistent with due process, to add a party who did not control a defense to Lloyd’s suit and had no opportunity to litigate its liability. In addition, Lloyd presented no ev idence to establish that RDD, Inc., is defendants’ alter ego. Therefore, we affirm the postjudgment order.
I. FACTS Lloyd filed suit against defe ndants on October 7, 2008, alleging a sole cause of action for breach of contract. In a declara tion attached to his form complaint, Lloyd alleged that he and defendants entered into a contract for the sale of a share of undeveloped land in Devore, and that after defendants stopped making monthly payments, he served defendants with a notice of default. The contract and grant deed3 attached to the compla int listed the named defendants and RDD, Inc., as the purchasers. However, although Lloyd listed RDD, Inc., as an “unincor porated entity” on his form complaint, he did not actually name RDD, In c., as a defendant. In his prayer, Lloyd requested that the contract be terminated based on defendants’ breach , and that the court order defendants’ names removed from the re corded title to the real property and replaced with Lloyd’s name. On October 16, 2008, Lloyd filed proofs of service with the superior court showing that two days earlier he served th e named defendants with the summons and complaint. Lloyd did not serve RDD, Inc. Defendants failed to respond to the co mplaint, so on April 15, 2009, Lloyd obtained their defaults. On December 15, 2009, Lloyd requested a default judgment against the named defendants. The same day, the court entered a judgment that forfeited the contract between Lloyd an d the named defendants, termin ated defendants’ and their successors’ interests in the real property, or dered that defendants names be removed from the title to the property and th at Lloyd be returned as title holder, and awarded Lloyd $320 in costs. A notice of entry of judgment was filed on February 23, 2010. Lloyd attempted to amend the judgment by filing a d eclaration and proposed amended judgment on November 23, 2010, December 21, 2010, and February 9, 2011, but they were returned to Ll oyd by the clerk of the superior court for various reasons. On April 13, 2012, Lloyd filed a motion under Code of Civil Procedure section 187 for an order amending the judgment to name RDD, Inc., as a judg ment debtor. Lloyd argued he was unsuccessful in enforcing th e judgment against defendants because the4 property is in the name of RDD, Inc., whic h holds the property for defendants, but RDD, Inc., is not registered with the Secretary of State and is a nonexi stent entity. He argued the trial court had the authority to amend the judgment to name RDD, Inc., as a judgment debtor to avoid the unfairness attendant to defendants’ hiding behind a nonexistent corporation to avoid enforcement of the judgment. In his supporting declaration, Lloyd stated he only learned that the property was owned by RDD, Inc., when he tried to en force the judgment. Lloyd declared that, although RDD, Inc., is not registered with the Secretary of State, it is an existing corporation located in Los Gato s, California, and that its corporate agent is Dean Joseph Devicenzi. Finally, Lloyd declar ed that defendants placed R DD, Inc.’s name on the grant deed to frustrate his ability to enforce the judgment. Lloyd served the motion on defendants, “who are DBA RDD, Inc.” At the hearing on Lloyd’s mo tion, the trial court stated, “this is a rather strange case” because Lloyd obtained a default judgment quieting title to the property without the court first conducting a prove-up hearing, but the court declined to “revisit that now.” With respect to Lloyd’s motion, the court explained it did not understand the relief he was seeking. “[Y]ou say at one point that you want to add RDD, Inc ., as the alter ego of the defendants. But at the same time, you say that RDD, Inc., does not exist.” Lloyd responded, “They don’t.” When the court as ked Lloyd “why would [he] want to add a nonexistent name to [his] judgment?” he answered, “Basically, these people have defaulted. I sold them shares on some proper ty. They defaulted. I’m just trying to get them off the title. And they don ’t want to bother with this anymore.” The court denied5 the motion, stating it would not amend a judgment that it considered to be defective, and it would not “add as a judgment debtor a party that you acknowledge does not exist.” Lloyd timely appealed.
II. DISCUSSION Lloyd contends the trial court erred by denying his motion because it had the equitable authority to amend the judgment to add RDD, In c., as a judgment debtor to prevent defendants from evading enforcement of the judgment. He also contends the trial court wrongly characterized the default j udgment as a judgment to quiet title, and improperly denied the motion ba sed on a perceived defect in the default judgment. We need not decide whethe r the trial court correctly charact erized the default judgment as one quieting title. “A lower court order is pr esumed correct. [Citation.] Accordingly, a correct ruling will not be revers ed simply because it may have been based on an incorrect reason. [Citation.]” ( Ceja v. Department of Transportation (2011) 201 Cal.App.4th 1475, 1483.) Not surprisingly, defendants filed no brie fs in this court. “Because the responden[ts] did not appear in this appeal , we ‘decide the app eal on the record, the opening brief, and any oral argument by th e appellant.’ (Cal. Rules of Court, rule 8.220(a)(2); [Citation].)” ( Galleria Plus, Inc. v. Hanmi Bank (2009) 179 Cal.App.4th 535, 537, fn. 2.) “Nonetheless, [Lloyd] still bears the ‘affirmative burden to show error whether or not the respondent’s brief has been filed,’ and we ‘examine the6 record and reverse only if prej udicial error is found.’” ( Smith v. Smith (2012) 208 Cal.App.4th 1074, 1078.) As we explain below, the trial court la cked the authority to amend a default judgment to add a judgment debtor, and even if the court had such authority, Lloyd did not prove that RDD, Inc., is an alter ego of defendants. Therefore, the trial court correctly denied the motion.
A. The Trial Court Correctly Denied Lloyd’s Motion to Amend the Judgment to Add an Alter Ego Because It Lacked the Authority to Amend a Default Judgment As a threshold matter, the trial court corre ctly denied Lloyd’s motion to amend the judgment because it lacked the authority to do so in this case. Ge nerally speaking, “[a] trial court has the authority to amend a j udgment in order to add additional judgment debtors. Code of Civil Pro cedure section 187 has often serv ed as the basi s for such an amendment of a judgment, pursuant to the a lter ego doctrine. [C itations.] And, the general rule is that ‘a cour t may amend its judgment at any time so that the judgment will properly designate the real defendants.’” ( Dow Jones Co. v. Avenal (1984) 151 Cal.App.3d 144, 148-149.) “The court may exercise its authority to impose liability upon an alter ego who had control of the litigation, and was therefore repr esented in it. [Citations.] The addition of a new party as judgment debtor stems from the concept of the alter e go doctrine, which is that an identity exists between the new party and the original party, whose participation in the trial leading to the judgment repres ented the newly added party. [Citation.] Therefore amending a judgment to add an alter ego does not add a new defendant but7 instead inserts the correct name of the real defendant. [Citati ons.] In order to see that justice is done, great liberality is encourag ed in the allowance of amendments brought pursuant to Code of Civil Procedure section 187.” ( Misik v. D’Arco (2011) 197 Cal.App.4th 1065, 1072-1073 ( Misik ).) However, “[t]he ability under [Code of Ci vil Procedure] sec tion 187 to amend a judgment to add a defendant, thereby impo sing liability on the ne w defendant without trial, requires both (1) that the new party be th e alter ego of the old party and (2) that the new party had controlled the litig ation, thereby having had th e opportunity to litigate, in order to satisfy due process concerns. The du e process considerations are in addition to, not in lieu of , the threshold alter ego issues.” ( Triplett v. Farmers Ins. Exchange (1994) 24 Cal.App.4th 1415, 1421; accord, Toho-Towa Co. Ltd. v. Morgan Creek Productions,
Inc. (2013) 217 Cal.App.4th 1096, 1106.) “[B]ecause of due process conc erns, a default judgment is not subject to such an amendment.” (Ahart, Cal. Practice Guide: Enforcing Judgments and Debts (The Rutter Group 2014) ¶ 6:1567, pp. 6G-75, citing Motores De Mexicali v. Superior Court (1958) 51 Cal.2d 172, 175-176 & NEC Electronics, Inc. v. Hurt (1989) 208 Cal.App.3d 772, 779.) “When a judgment is by default, the defendant did not have an opportunity to present a defense and amending the judgment would violate due process.” (3 Cal. Trial Practice: Civil Procedure During Trial (Cont .Ed.Bar 3d ed. 2014) Judgments, § 23.31, pp. 23-30.)8 Lloyd obtained his judgment by default, so RDD, Inc., cannot be said to have controlled the defense in this case or to have had an opport unity to litigat e its liability. Therefore, the trial court could not, consiste nt with due process, amend the judgment to add RDD, Inc., as a judgment debtor. Regard less of the reasons given by the trial court for denying Lloyd’s motion, its ruling was correct.
B. Even If the Trial Court Had the Au thority to Amend the Judgment, It Correctly Denied Lloyd’s Mo tion Because He Did Not Prov e RDD, Inc.’s Alter Ego
Status Even if amending Lloyd’s default judgment to add an alter ego would not offend due process principles, the trial court correc tly denied Lloyd’s moti on because he did not prove by a preponderance of th e evidence that RDD, Inc., is defendants’ alter ego. “Code of Civil Procedure section 187 cont emplates a noticed motion. The trial court is not required to hold an evidentiary hear ing. [Citation.] Evidence in the form of declarations or deposition testimony is sufficient.” ( Wells Fargo Bank, National Assn. v. Weinberg (2014) 227 Cal.App.4th 1, 9 [Fourth Dist ., Div. Two].) In the trial court, the moving party bears the burden of proving a lter ego status by a preponderance of the evidence. (Evid. Code, § 115; Wollersheim v. Church of Scientology (1999) 69 Cal.App.4th 1012, 1014, 1015-1 018; Ahart, Cal. Practice Guide: Enforcing Judgments and Debts, supra , ¶¶ 6:1572-6:1572a, pp . 6G-77 to 6G-78.) Whether the evidence presented in the trial court supports pierci ng the corporate veil to impose liability on an alter ego is primarily a ques tion of fact, and is reviewed on appeal for substantial evidence. ( Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486, 512.)9 “The first requirement for disregarding the corporate entity under the alter ego doctrine—whether there is suffi cient unity of interest and ownership that the separate personalities of the individual and the corpora tion no longer exist— encompasses a series of factors. Among the many factors to be considered in applying the doctrine are one individual’s ownership of all stock in a corp oration; use of the same office or business location; commingling of funds an d other assets of the individual and the corporation; an individual holding out that he is personally liable for debts of the corporation; identical directors and officers; failure to maintain minutes or adequate corporate records; disregard of corporate form alities; absence of corporat e assets and inadequate capitalization; and the use of a corporation as a mere shell, instrume ntality or conduit for the business of an individual. [Citation.] This list of factors is not exhaustive, and these enumerated factors may be considered with ot hers under the particular circumstances of each case. ‘“No single factor is determina tive, and instead a court must examine all the circumstances to determine whethe r to apply the doctrine.”’” ( Misik , supra , 197 Cal.App.4th at p. 1073.) “The second requirement for application of the alter ego doctrine is a finding that the facts are such that adherenc e to the fiction of the separate existence of the corporation would sanction a fraud or promote injustice. [Citation.] The test for this requirement is that if the acts are treated as those of the corporation alone, it will produce an unjust or inequitable result. [Citation.]” ( Misik , supra , 197 Cal.App.4th at p. 1073.)10 Lloyd’s declaration in sup port of his motion does not sa tisfy any of the factors demonstrating alter ego status. Lloyd declared that, when he tried to satisfy the default judgment against the named defendants, he learned “the property was owned by ‘RDD, Inc.,’ which represents the initia ls of each of the Defendants.” 1 Lloyd declared that RDD, Inc., “exists,” that it is located in Los Gatos, California, that its corporate agent is Dean Joseph Devicenzi, and th at by “putting the name of another corporation” on the grant deed, “Defendants are frustrating my attempts to collect my Judgment against them.” But, in his motion, his points a nd authorities in support of the motion, his statements to the trial court during the hearing, and his brief on appeal, Lloyd contradicts his declaration by stating, “RDD, Inc., does not exist .” (Italics added.) Moreover, Lloyd includes no facts in hi s declaration that demonstrate, by a preponderance of the evidence, that the named defendants control, are shareholders of, or commingled their personal funds w ith RDD, Inc., such that th ey should, in fairness, be considered one and the same. To the contrary , Lloyd declared that, even if RDD, Inc., does exist, “it was not an entity controlled by Defendants Rick Martinez et al.” (Italics added.)

1 The record belies Lloyd’s assertion th at he only learned about RDD, Inc.’s ownership of the property when he tried to enforce the judgment. Lloyd knew or should have known about RDD, Inc.’s ownership before he filed suit because the contract and grant deed attached to Lloyd’ s complaint clearly list RDD, Inc., as a purchaser of the property.11 Because Lloyd did not esta blish by a preponderance of the evidence that RDD, Inc., is an alter ego of defendants, and that the corporate veil should be pierced to impose liability on RDD, Inc., the trial court corr ectly denied Lloyd’s motion to amend the judgment.
III. DISPOSITION The postjudgment order is affi rmed. No costs on appeal are awarded. (Cal. Rules of Court, rule 8.278(a)(5).)
NOT TO BE PUBLISHED IN OFFICIAL REPORTS

McKINSTER Acting P. J. We concur:

RICHLI J.

CODRINGTON J.