Filed 10/25/16

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

WOLF METALS INC.,

Plaintiff and Respondent,

v.

RAND PACIFIC SALES INC. et 

al.,

Defendants and Appellants.

 B264002

 (Los Angeles County

 Super. Ct. No. VC055239)

APPEAL from a judgment of the Superior Court of Los 

Angeles County, Roger Ito, Judge. Affirmed in part, 

reversed in part.

David S. Kim & Associates, David S. Kim and Arman 

Matevosyan for Defendants and Appellants Donald Koh and 

South Gate Steel, Inc.

Ferruzzo & Ferruzzo and James F. Rumm for Plaintiff 

and Respondent. 
2

In the underlying action, the trial court entered a 

default judgment in favor of respondent Wolf Metals Inc., on 

its complaint against Rand Pacific Sales, Inc. (RPS). 

Following efforts to enforce the judgment, Wolf Metals 

requested that the judgment be amended to name 

appellants Donald Koh and South Gate Steel, Inc. (SGS) as 

additional judgment debtors. The trial court granted the

request, concluding that Koh was RPS’s alter ego and that 

SGS was RPS’s successor corporation. On appeal, Koh and 

SGS challenge the amendment to the default judgment. We 

conclude that pursuant to our Supreme Court’s decision in 

Motores de Mexicali v. Superior Court (1958) 51 Cal.2d 172 

(Motores), the default judgment could not be amended to add 

Koh as an alter ego to the judgment. We further conclude 

that the judgment was properly amended to add SGS as a 

corporate successor. Accordingly, we reverse the amended 

judgment in part and affirm it in part. 

RELEVANT FACTUAL AND PROCEDURAL 

BACKGROUND

Wolf Metals’s complaint, filed December 23, 2009, 

asserted claims for open book account, account stated, and 

breach of contract against RPS. The complaint alleged that

from March 2008 to August 2009, Wolf Metals sold sheet 

metal to RPS pursuant to an oral agreement. The complaint 

further alleged that RPS owed Wolf Metals the sum of 

$292,055.93, which RPS had failed to pay despite Wolf 
3

Metals’s demand. In February 2010, RPS answered the 

complaint. 

In June 2010, RPS filed a petition for Chapter 7 

bankruptcy protection (11 U.S.C. § 701 et seq.). The petition 

was executed by Koh as RPS’s president. As a result of the 

bankruptcy proceeding, the underlying action was stayed. 

In the course of the bankruptcy proceeding, Wolf Metals

asserted a claim for $298,805.91 as an unsecured creditor on 

the basis of “[g]oods sold.” Koh and SGS also asserted 

claims as unsecured creditors. On July 14, 2011, the

bankruptcy court ordered the case closed. In connection 

with that order, the docket for the bankruptcy proceeding 

states, “no discharge.” (Capitalization omitted.)

In September 2011, upon notice by Wolf Metals that 

the bankruptcy proceeding had closed without a discharge, 

the trial court authorized Wolf Metals to resume litigation of 

its claims against RPS. After RPS’s counsel repeatedly 

failed to attend scheduled hearings, the court ordered RPS’s 

answer stricken and entered RPS’s default. On July 20, 

2012, the trial court entered a default judgment in Wolf

Metals’s favor, awarding $292,055.093 in damages, together 

with $70,400 in pre-judgment interest and $430.00 in costs. 

RPS did not satisfy the judgment. In December 2012, 

in an effort to enforce the judgment, Wolf Metals arranged 

for a judgment debtor examination of Koh and his wife, who 

is RPS’s secretary and treasurer. After initially refusing to 

answer questions, they were examined and excused. Later, 

when Wolf Metals propounded discovery seeking RPS’s 
4

records, Koh replied that he had none, stating that all such 

documents had been transferred to the bankruptcy trustee 

or discarded. In September 2014, Wolf Metals filed motions 

to compel responses to its post-judgment special 

interrogatories and request for the production of documents. 

The trial court granted the motions and issued an award of 

sanctions against RPS totaling $1,245. In January 2015, 

Wolf Metals conducted a second judgment debtor 

examination of Koh. 

Following that examination, Wolf Metals filed a 

motion under Code of Civil Procedure section 187, seeking to 

amend the default judgment to name Koh and SGS as 

additional judgment debtors. On March 19, 2015, the trial 

court issued a written order granting the request,

concluding that Koh was RPS’s alter ego and that SGS was 

a successor corporation of RPS. Koh and SGS noticed their 

appeal from that order. On May 4, 2015, the court entered 

an amended default judgment naming Koh and SGS as 

additional judgment debtors.

1

 

1 Appellants’ notice of appeal was premature, as only the 

amended default judgment is appealable. (See McClellan v. 

Northridge Park Townhome Owners Assn. (2001) 89 

Cal.App.4th 746, 751.) However, because Wolf Metals has 

not objected to the premature notice of appeal, we find good 

cause to treat the notice as having been filed immediately 

after the May 4, 2015 judgment. (Cal. Rules of Court, rule 

8.104(d)(2); Stonewall Ins. Co v. City of Palos Verdes Estates 

(Fn. is continued on next page.)
5

DISCUSSION

Koh and SGS contend the trial court erred in 

amending the default judgment to include them as judgment 

debtors. For the reasons discussed below, we agree that 

under controlling authority Koh was improperly named a 

judgment debtor on an “alter ego” theory, but conclude that 

SGS was properly named as a judgment debtor as RPS’s

successor corporation. 

A. Governing Principles

Under Code of Civil Procedure section 187, “the trial 

court has jurisdiction to modify a judgment to add additional 

judgment debtors.”2 (McClellan, supra, 89 Cal.App.4th at 

p. 752.) The decision to modify the judgment is consigned to 

the trial court’s discretion. (Greenspan v. LADT LLC (2010) 

191 Cal.App.4th 486, 508.) To the extent the exercise of that 

discretion relies on factual findings, we review those 

 

(1996) 46 Cal.App.4th 1810, 1827-1828; see McClellan, 

supra, 89 Cal.App.4th at p. 751.)

2 Code of Civil Procedure section 187 provides: “When 

jurisdiction is, by the Constitution or this Code, or by any 

other statute, conferred on a Court or judicial officer, all the 

means necessary to carry it into effect are also given; and in 

the exercise of this jurisdiction, if the course of proceeding 

be not specifically pointed out by this Code or the statute, 

any suitable process or mode of proceeding may be adopted 

which may appear most conformable to the spirit of this 

code.”
6

findings for the existence of substantial evidence. 

(McClellan, supra, 89 Cal.App.4th at pp. 751-752.)

1. Addition of Judgment Debtor as Alter Ego

Modification of a judgment may be proper when the 

newly-named defendant is an existing defendant’s alter ego. 

(McClellan, supra, 89 Cal.App.4th at pp. 752-757.) “Under 

the alter ego doctrine, . . . when the corporate form is used to

perpetrate a fraud, circumvent a statute, or accomplish 

some other wrongful or inequitable purpose, the courts will 

ignore the corporate entity and deem the corporation’s acts 

to be those of the persons . . . actually controlling the 

corporation, in most instances the equitable owners. 

[Citations.] The alter ego doctrine prevents individuals 

. . . from misusing the corporate laws by the device of a 

sham corporate entity formed for the purpose of committing 

fraud or other misdeeds. [Citation.]” (Sonora Diamond 

Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538.)

In the case of default judgments, the application of the 

alter ego doctrine is subject to a limitation arising from 

considerations of due process. Under Code of Civil 

Procedure section 187, “to amend a judgment to add a 

defendant, thereby imposing liability on the new defendant 

without trial, requires both (1) that the new party be the 

alter ego of the old party and (2) that the new party . . .

controlled the litigation, thereby having had the opportunity 

to litigate, in order to satisfy due process concerns. The due 

process considerations are in addition to, not in lieu of, the 
7

threshold alter ego issues.” (Triplett v. Farmers Ins. 

Exchange (1994) 24 Cal.App.4th 1415, 1421.) 

The due process-related requirement was first 

recognized by our Supreme Court in Motores, supra, 51 

Cal.2d 172. There, three individuals formed a corporation 

that engaged in the sale of used cars. (Id. at pp. 173-174.) 

When the plaintiff sued the corporation for failure to pay 

some loans, neither the corporation nor the individuals 

operating it appeared in the action, and a default judgment 

was entered against the corporation. (Ibid.) When the 

plaintiff sought to modify the default judgment to include 

the three individuals as judgment debtors on an alter ego 

theory, the trial court declined to do so. (Id. at p. 176.) 

Affirming that ruling, the court concluded that the 

Fourteenth Amendment of the United States Constitution 

precluded the modification, stating: “That constitutional 

provision guarantees that any person against whom a claim 

is asserted in a judicial proceeding shall have the 

opportunity to be heard and to present his defenses. 

[Citations.] To summarily add [the three individuals] to the 

judgment heretofore running only against [the corporation] 

without allowing them to litigate any questions beyond their 

relation to the allegedly alter ego corporation would patently 

violate this constitutional safeguard. . . . They were under 

no duty to appear and defend personally in that action, since 

no claim had been made against them personally.” (Motores, 

supra, at p. 176.) 
8

In NEC Electronics, Inc. v. Hurt (1989) 208 Cal.App.3d 

772, 775-781 (NEC Electronics), the appellate court reached 

a similar conclusion, even though the pertinent judgment 

arose from the corporate defendant’s failure to litigate its 

defenses at trial, rather than from a default. When the 

plaintiff sued the corporation for nonpayment of purchased 

goods, the corporation filed a general denial. (Id. at p. 775.) 

Prior to trial, the corporation’s chief executive officer -- who 

was also its sole shareholder -- discussed the corporation’s 

potential bankruptcy and reorganization with the plaintiff. 

(Ibid.) Shortly before trial, the corporation gave notice that 

it would not appear. (Id. at pp. 775-776.) After the plaintiff 

presented its evidence at trial, a judgment was entered in its 

favor against the corporation, which filed a bankruptcy 

petition. (Id. at p. 776.) Later, after the bankruptcy 

proceeding closed, the trial court granted the plaintiff’s 

petition to add the corporation’s chief executive officer as a 

judgment debtor, reasoning that he knew of the lawsuit and 

was involved in the corporation’s decisions regarding it. 

(Ibid.) Relying on Motores, the appellate court reversed, 

concluding that the chief executive officer neither shared the 

corporation’s interests nor controlled its defense. (Id. at pp. 

780-781.) The court remarked: “There was no defense for 

[him] to control. After [the corporation] filed its general 

denial, no further proceedings were conducted.” (Id. at 

p. 781.) 
9

2. Addition of Judgment Debtor As Successor

 Corporation

Modification of a judgment may also be proper under 

the “successor corporation” theory. (McClellan, supra, 89 

Cal.App.4th at pp. 753, 754-756, italics omitted.) According 

to that theory, when a corporation sells or transfers all of its 

assets to another corporation constituting its “‘mere 

continuation,’” the latter is also liable for the former’s debts 

and liabilities. (Id. at p. 754, fn. 4, quoting Ray v. Alad 

Corp. (1977) 19 Cal.3d 22, 29.) Generally, “‘California 

decisions holding that a corporation acquiring the assets of 

another corporation is the latter’s mere continuation and 

therefore liable for its debts have imposed such liability only 

upon a showing of one or both of the following factual 

elements: (1) no adequate consideration was given for the 

predecessor corporation’s assets and made available for 

meeting the claims of its unsecured creditors; (2) one or 

more persons were officers, directors, or stockholders of both 

corporations. [Citations.]’” (McClellan, supra, 89 

Cal.App.4th at p. 754, fn. 4, quoting Ray, supra, 19 Cal.3d at 

p. 29.)

In view of the nexus between a corporation and a 

second corporation constituting its “‘mere continuation,’” 

when a judgment is entered against the former due to a 

failure to present a defense, the judgment may be modified 

to name the latter as an additional judgment debtor without 

contravening due process. (McClellan, supra, 89 

Cal.App.4th at pp. 754, fn.4 & 754-757.) In McClellan, a 
10

corporation hired a contractor to repair its condominium 

complex. (Id. at p. 749.) After the corporation did not pay 

for the services, the contractor initiated an arbitration 

proceeding against it. (Ibid.) When the corporation failed to 

appear at the arbitration, the arbitrator issued a default 

award, and the contractor filed a petition for a judgment 

confirming the award. (Ibid.) Shortly before that judgment 

was entered, the corporation’s board of directors caused the 

creation of a new corporation and transferred the 

condominium complex to it. (Id. at p. 750.) Later, the trial 

court granted the contractor’s request to modify the 

judgment to include the new corporation as a judgment 

debtor, finding that it was the original corporation’s 

successor. (Id. at p. 751.) 

Affirming, the appellate court concluded that the new 

corporation was the original corporation’s “mere 

continuation.” (McClellan, supra, 89 Cal.App.4th at pp. 755-

756.) In so concluding, the court observed that both 

corporations shared the same board, which had transferred 

the condominium complex in contravention of the applicable 

covenants, conditions, and restrictions, and never dissolved 

the original corporation. (McClellan, supra, 89 Cal.App.4th 

at pp. 755-756.) The court rejected a contention under NEC 

Electronics that the new corporation lacked the opportunity 

to litigate in the underlying action, stating: “[The new 

corporation] is a mere continuation of the [original 

corporation] under a different name. Therefore, [the new 

corporation] cannot be heard to complain that because it did 
11

not exist at the time the arbitration award was entered, its 

interests were not represented in the underlying action.” 

(Id. at p. 757.)

B. Underlying Proceedings

At the January 2015 judgment debtor examination, 

Koh testified as RPS’s president. According to Koh, RPS’s 

board of directors consisted of Koh and his wife, who also 

served as RPS’s secretary and treasurer. The sole 

shareholder was a Koh family trust. RPS engaged in “[s]teel 

purchase and sales,” that is, it bought steel coil from 

suppliers, including Wolf Metals, cut the coil, and then sold 

it as a finished product. RPS always conducted its 

operations at a single location, and had 10 to 20 employees. 

Koh also operated SGS. As with RPS, Koh’s wife acted 

as SGS’s secretary and treasurer. While RPS was active, 

SGS supplied steel to RPS and cut the steel for RPS. Koh 

denied that SGS engaged in the same business as RPS. 

In the course of RPS’s operations, Koh and RPS made 

loans to each other. At some point, RPS secured a loan from 

Koh, and discharged the loan by transferring equipment 

valued at $29,000 to him. According to Koh, no document 

expressly established the existence of the loan. He further 

testified that he had no records for RPS because they had 

been discarded or transferred to the bankruptcy trustee. 

In 2010, upon initiating bankruptcy proceedings, RPS 

stopped doing business and sold its remaining inventory. 
12

During the proceedings, SGS asserted an unsuccessful claim

for $11,458 as an unsecured creditor. 

After the bankruptcy closed, RPS never resumed 

operations. Koh described its current status as “[n]othing” 

because it had filed no tax returns for several years. He 

further stated that because RPS had been “thrown away,” 

SGS had taken possession of RPS’s remaining furniture and 

other items, which he described as “abandoned.” When 

asked whether SGS employed any of RPS’s employees, Koh 

replied, “Yes.” Koh testified that RPS would neither satisfy

the judgment nor pay the sanctions owed to Wolf Metals, 

stating that RPS was “no longer there” and that he was “not 

[RPS] anymore.”

Following the January 2015 judgment debtor 

examination, Wolf Metals filed its motion to amend the 

default judgment, contending that Koh and SGS were RPS’s 

alter egos and that SGS was a mere continuation of RPS. In 

addition to Koh’s testimony at the January 2015 

examination, Wolf Metals submitted evidence that SGS was 

engaged in the same business as RPS at its former location, 

and that Koh was the agent for service of both entities. Wolf 

Metals’s showing included photos of RPS’s building in 2007 

and photos of the same building in 2014, which then served 

as SGS’s business location. In 2007, the building’s front sign 

displayed RPS’s name, two phone numbers, and the 

following description of its services: “Specialist on narrow 

cut slit coils [] Max capacities 1⁄4 thick to 1⁄2” width [] Round 

edged flat bars & coils.” In 2014, when SGS occupied the 
13

building, RPS’s name was absent, but the building’s front 

sign was otherwise unchanged, and advertised the same 

services. Wolf Metals also submitted an image of SGS’s Web

site as it appeared in 2011. The description of SGS’s 

services on the Web site closely tracked the advertisement 

on the building’s front sign. 

Appellants’ opposition neither disputed Wolf Metals’s 

evidentiary showing nor offered new evidence. In addition 

to contending that the proposed amendments were improper 

under Motores and NEC Electronics, appellants argued that 

Wolf Metals failed to act with due diligence in seeking the 

amendments. 

In granting the motion to amend the default judgment, 

the trial court found that Koh and SGS were RPS’s alter 

egos and that SGS was RPS’s successor. The court rejected 

appellants’ contention that Wolf Metals had failed to act 

with due diligence, stating that RPS did not respond to the 

post-judgment discovery propounded by Wolf Metals, which 

“learned of the extent to which . . . [SGS] stepped into the 

shoes of [RPS] at the January 2015 debtor’s examination.” 

C. Analysis

As explained below, we conclude (1) that under 

Motores, Koh was improperly added as a judgment debtor on 

an “alter ego” theory, and (2) that SGS was properly added 

as a judgment debtor as a mere continuation of RPS. 
14

1. No Discharge in the Bankruptcy Proceeding

At the threshold, we examine appellants’ contention 

that the trial court’s ruling contravenes a determination by 

the bankruptcy trustee and the bankruptcy court. 

Appellants rely on the bankruptcy trustee’s final report 

prior to the closing of the bankruptcy proceeding, which 

states: “I have made a diligent inquiry into the financial 

affairs of the debtor . . . [RPS.] . . . [T]here is no property 

available for distribution from the estate over and above 

that exempted by law. . . . I hereby certify that the estate of 

the above-named debtor(s) has been fully administered. . . .

Claims scheduled to be discharged without payment. . . :

$286,469.47.” Notwithstanding the entry in the bankruptcy 

court’s docket reflecting that the proceeding closed with “no 

discharge,” appellants argue that the trustee’s report 

establishes the existence of a ruling that Wolf Metals’s 

claims against RPS were “to be discharged without 

payment.” (Underlining omitted.) 

Appellants’ contention fails, as no such ruling is 

available in a chapter 7 bankruptcy proceeding. Section 

727(a)(1) of title 11 of the United States Code expressly 

states: “‘The court shall grant the debtor a discharge unless 

. . . the debtor is not an individual.’” Thus, a corporation 

may not discharge its debts and liabilities in a chapter 7 

proceeding. (N.L.R.B. v. Better Bldg. Supply Corp. (9th Cir. 

1988) 837 F.2d 377, 378.) 

As such a proceeding also does not dissolve a 

corporation -- which must be accomplished under state 
15

procedures -- corporate debts and liabilities survive the 

closing of the bankruptcy proceeding. (N.L.R.B. v. Better 

Bldg. Supply Corp., supra, 837 F.2d at p. 379.) For that 

reason, responsibility for those debts and liabilities may be 

imposed on other parties under “alter ego” and “successor 

corporation” theories. (Id. at pp. 379-380; In re Goodman

(2d. Cir. 1989) 873 F.2d 598, 602.) Accordingly, the 

bankruptcy proceeding did not preclude the amendment of 

the judgment to include appellants as judgment debtors.3

3 For the first time on appeal, appellants’ reply brief 

contends the “findings” of the bankruptcy trustee precluded 

Wolf Metals from asserting that SGS is a mere continuation 

of RPS. Because they did not raise this contention in their 

opening brief, they have forfeited it. (Campos v. Anderson 

(1997) 57 Cal.App.4th 784, 794, fn. 3; 9 Witkin, Cal. 

Procedure (5th ed. 2008) Appeal, § 701, pp.769-771.) 

Moreover, were we to address it, we would reject it. Under 

the doctrine of collateral estoppel, a finding from a prior 

proceeding has preclusive effect with respect to an issue only 

when that issue was “actually litigated” and “necessarily 

decided” in the prior proceeding (People v. Garcia (2006) 39 

Cal.4th 1070, 1077; see Chinese Yellow Pages Co. v. Chinese 

Overseas Marketing Service Corp. (2008) 170 Cal.App.4th 

868, 888 [bankruptcy court’s ruling had no preclusive effect 

regarding issues not actually adjudicated].) Nothing before 

us suggests that those requirements were satisfied here.
16

2. Judgment Improperly Amended Under “Alter

 Ego” Theory

We turn to appellants’ contention that the judgment 

was erroneously amended to include Koh as a judgment 

debtor on the basis of an “alter ego” theory. That

amendment was improper under Motores, which involved 

facts materially identical to those presented here. Like the 

defendant corporation in Motores, RPS offered no evidencebased defense in the underlying action, and the judgment 

against RPS was entered by default.

4

 Although Koh 

dominated RPS and knew of Wolf Metals’s suit against RPS, 

his circumstances do not differ from the individuals who 

dominated the defendant corporation in Motores. Because 

Motores held that the latter individuals were improperly 

added as judgment debtors, it precludes the inclusion of Koh 

as judgment debtor on an “alter ego” theory.5

4 We recognize that unlike the defendant corporation in 

Motores, RPS filed an answer that was later stricken. 

However, that factual difference is not material in view of 

NEC Electronics, in which the defendant corporation filed an 

answer but failed to present an evidence-based defense 

before judgment was entered against it. (NEC Electronics, 

supra, 208 Cal.App.3d at pp. 775-781.) 

5 Wolf Metals argues that declining to recognize Koh as 

a judgment debtor would encourage alter egos of 

corporations to avoid corporate liabilities by ensuring that 

the corporations default in actions against them. While we 

recognize the merits of that policy consideration, the rule 

(Fn. is continued on next page.)
17

The decisions upon which Wolf Metals relies are 

distinguishable, as in each case, the original corporate 

defendant presented an evidence-based defense prior to the 

amendment of the judgment. (Schoenberg v. Romike 

Properties (1967) 251 Cal.App.2d 154, 166-167 [judgment 

properly amended to include defendant corporation’s 

shareholders and officers following jury trial]; Farenbaugh 

& Son v. Belmont Construction, Inc. (1987) 194 Cal.App.3d 

1023, 1026-1031 [judgment properly amended to include 

defendant corporation’s president following bench trial]; 

Toho-Towa Co., Ltd. v. Morgan Creek Productions, Inc. 

(2013) 217 Cal.App.4th 1096, 1110 [arbitration-based 

judgment against two corporations properly amended to 

include additional corporation as judgment debtor, as 

arbitration was contested].) As explained above, RPS 

offered no defense to Wolf Metals’s suit, and the judgment 

against it was entered by default. Accordingly, the trial 

court erred in amending the default judgment to include 

appellants as judgment debtors on the basis of an “alter ego” 

theory.

 

established in Motores over half a century ago is binding on 

us. (Auto Equity Sales, Inc. v. Superior Court (1962) 57 

Cal.2d 450, 455.)
18

3. Judgment Properly Amended With Respect to

 SGS Under “Successor Corporation” Theory 

We reach the contrary conclusion regarding the 

amendment relating to SGS based on the “successor 

corporation” theory. Under that theory, “‘corporations 

cannot escape liability by a mere change of name or a shift 

of assets when and where it is shown that the new 

corporation is, in reality, but a continuation of the old. 

Especially is this well settled when actual fraud or the 

rights of creditors are involved, under which circumstances 

the courts uniformly hold the new corporation liable for the 

debts of the former corporation.’” (Cleveland v. Johnson

(2012) 209 Cal.App.4th 1315, 1327 (Cleveland), quoting 

Blank v. Olcovich Shoe Corp. (1937) 20 Cal.App.2d 456, 

461.) The application of the theory presents “‘equitable 

issues to be examined ‘on their own unique facts . . . .’” 

(Cleveland, supra, 209 Cal.App.4th at p. 1330, quoting 

CenterPoint Energy, Inc. v. Superior Court (2007) 157 

Cal.App.4th 1101, 1122.) 

Here, the evidence establishes that although SGS’s 

creation predated RPS’s bankruptcy proceeding, SGS merely 

continued RPS’s business operations under a different name. 

According to Wolf Metals’s showing, Koh “ran” both 

corporations, which share the same president, secretary, 

treasurer, business location, and agent for service. After the 

bankruptcy proceeding closed, RPS was never dissolved. 

SGS took possession of RPS’s remaining assets and offered 

services identical to those provided by RPS, using RPS’s 
19

employees. Koh testified that RPS had been “thrown away” 

and was “no longer there,” and that he was “not [RPS] 

anymore.” Wolf Metals’s evidence also showed that prior to 

RPS’s bankruptcy, Koh obtained RPS’s equipment as the 

purported repayment of a loan to RPS. As the trial court 

observed, at the January 2015 judgment debtor 

examination, Koh was unable to explain his transactions 

with RPS and SGS “whereby the funds and assets of [RPS] 

were com[m]ingled with [those] of [SGS] and his own 

personal finances.” In view of this evidence, the court 

reasonably concluded that SGS was a mere continuation of 

RPS. 

Appellants contend the trial court violated SGS’s due 

process rights in amending the default judgment because 

SGS’s interests differed from RPS’s interests in the 

underlying action, and it lacked control over RPS’s defense. 

In our view, that contention fails in light of McClellan, 

which concluded that when a judgment is entered against a 

corporation due to its failure to litigate a defense, due 

process is not contravened by the amendment of the 

judgment to include a corporation that is the defendant’s

mere continuation. (McClellan, supra, 89 Cal.App.4th at 

pp. 756-757.)

In a related contention, appellants suggest that there 

was no evidence that SGS paid inadequate consideration for 

the assets it received from RPS. Inadequacy of 

consideration, however, is not required for the application of 

the “‘successor corporation’” theory. (Cleveland, supra, 209 
20

Cal.App.4th at pp. 1332, 1333-1334.) Furthermore, the 

record discloses evidence sufficient to establish that factor. 

Following RPS’s bankruptcy proceeding, SGS simply took 

possession of RPS’s remaining furniture and other items. In 

addition, prior to the bankruptcy proceeding, Koh secured 

equipment from RPS valued at $29,000, a sum that exceeds 

the $11,458 claim that SGS asserted in the proceeding. Koh 

provided no document establishing the existence of the 

purported loan underlying the transfer of the equipment. As 

the record shows that contrary to Koh’s testimony, SGS 

operated in a manner identical to RPS at RPS’s business 

location, the trial court reasonably could have concluded 

that Koh’s purported acquisition of the equipment was, in 

fact, a consideration-free transfer of equipment to SGS.

Pointing to McIntire v. Superior Court (1975) 52 

Cal.App.3d 717, appellants contend the trial court erred in

determining that Wolf Metals exercised due diligence in 

seeking the amendment relating to SGS. In McIntire, 

following the dismissal of fictitious defendants and the 

presentation of evidence at trial, the plaintiffs entered into a 

settlement with the named defendants, which the court 

approved. (McIntire, supra, 52 Cal.App.3d at p. 717.) After 

the time for an appeal from the approval passed, the 

plaintiffs sought to amend the complaint to name as 

defendant an individual who had testified at trial. (Id. at 

pp. 719-721.) The appellate court held that any such 

amendment was improper, as the plaintiffs were aware of 

the individual’s potential involvement in the action before 
21

trial. (Id. at p. 721.) Relying on McIntire, appellants argue 

that the amendment relating to SGS was improper because 

Wolf Metals conducted business with Koh before RPS’s 

bankruptcy proceedings, in which Wolf Metals, Koh, and 

SGS asserted claims. 

We reject that contention, as nothing suggests that 

prior to Koh’s January 2015 judgment debtor examination, 

Wolf Metals knew, or should have known, that SGS was a 

mere continuation of RPS. The records from the bankruptcy 

proceedings show only that SGS identified itself as an 

unsecured creditor of RPS. Although Wolf Metals conducted 

a judgment debtor examination of Koh and his wife in 

December 2012, the record does not disclose their testimony. 

As the trial court observed, RPS otherwise failed to respond 

to Wolf Metals’s post-judgment discovery prior to the 

January 2015 judgment debtor examination, which alerted 

Wolf Metals to SGS’s close relationship to RPS. The trial 

court thus reasonably rejected appellants’ contention that 

Wolf Metals failed to act with due diligence. In sum, SGS 

was properly named as a judgment debtor on a “successor 

corporation” theory.
22

DISPOSITION

The amended judgment is reversed insofar as it names 

Koh as a defendant, and is affirmed in all other respects. 

The parties are to bear their own costs on appeal.

CERTIFIED FOR PUBLICATION

MANELLA, J.

We concur:

EPSTEIN, P. J.

COLLINS, J.