Court Opinion

ID: 4697315
Source: CourtListenerOpinion
Date Created: 2021-06-21 21:02:30.065413+00
Date Added: 2024-06-11T08:05:45.444230
License: Public Domain

Filed 6/21/21
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                SECOND APPELLATE DISTRICT

                       DIVISION SEVEN

SANDRA CORRALES                    B304841
FAVILA, as Executor, etc.,
                                   (Los Angeles County
       Plaintiff and Respondent,   Super. Ct. No. BC379462)

       v.

HELENA PASQUARELLA,

       Defendant and Appellant.

     APPEAL from an order of the Superior Court of
Los Angeles County, Stuart M. Rice, Judge. Affirmed.
     Barnhill & Vaynerov, Maxim Vaynerov; Walton & Walton
and L. Richard Walton for Defendant and Appellant.
     Miller Barondess, Christopher D. Beatty and
Bernadette M. Bolan for Plaintiff and Respondent.
                    ______________________
      The trial court granted the motion of Sandra Corrales
Favila, as executor of the Estate of Richard Charles Corrales
(Estate), to further amend the judgment entered against Raleigh
Souther and Get Flipped, Inc. by adding Helena Pasquarella as a
judgment debtor. Emphasizing that she had successfully moved
for summary judgment and been dismissed as a defendant many
years earlier and that the Estate had already obtained a
judgment against her in a separate fraudulent conveyance action,
Pasquarella contends on appeal that the court exceeded its
equitable authority under Code of Civil Procedure section 187 1 by
granting the motion. Pasquarella also contends the evidence was
insufficient in any event to justify adding her as a judgment
debtor. We affirm.
      FACTUAL AND PROCEDURAL BACKGROUND
      1. The Get Flipped Lawsuit
      As described in detail in this court’s opinions resolving
prior appeals, 2 Richard Corrales, a photographer and inventor,
and Souther incorporated Motion Graphix, Inc. in 2000 to license
and sell photographic and imaging technologies Corrales had
developed or improved for the creation of animated lenticular
images. 3 Corrales owned 51 percent of the company; Souther
49 percent.

1     Statutory references are to this code.
2     Favila v. Souther (Jan. 21, 2015, B253740) [nonpub. opn.];
Favila v. Souther (Oct. 23, 2012, B230264) [nonpub. opn.]; Favila
v. Katten Muchin Rosenman LLP (2010) 188 Cal.App.4th 189.
3     We explained in our 2012 opinion, “Popularized in the
1940s, lenticular imaging interlaces two photographs into a
single image that, when covered with a prismatic lens, displays
each photograph separately depending on the angle by which the

                                 2
      Corrales died in November 2005. In February 2007
Souther, purportedly acting on behalf of Motion Graphix, sold the
company’s assets to Get Flipped, a company created in 2006 and
wholly owned by Souther (90 percent) and Pasquarella
(10 percent), Souther’s then-wife, for $5,000. Motion Graphix
was dissolved by Souther in March 2007.
      In October 2007 Favila, Corrales’s sister, as executor of his
estate, filed a complaint asserting causes of action for conversion,
breach of fiduciary duty, fraud, breach of contract and breach of
the implied covenant of good faith and fair dealing against
Souther, Get Flipped and fictitiously named Doe defendants. The
complaint alleged Corrales had still owned 51 percent of the
shares of Motion Graphix when he died, those shares passed to
the Estate, the Estate never approved the sale of Motion
Graphix’s assets to Get Flipped or Motion Graphix’s dissolution,
the fair market value of Motion Graphix’s intellectual property
was between $8 million and $12 million and Souther had engaged
in wrongdoing by orchestrating the fraudulent and unauthorized
sale of Motion Graphix’s assets to Get Flipped. In addition to
damages the complaint sought imposition of constructive and
resulting trusts.
      In April 2008 the Estate amended the complaint to name
Pasquarella as an additional defendant. Pasquarella’s motion for

image is viewed and creates the illusion of motion. As described
in a 2002 press release, Motion Graphix offered a turnkey
hardware and software system allowing users, such as theme
parks, in a matter of seconds and for very low cost, to capture
images from any source, add artwork and print animated
lenticular souvenir cards or security identification badges that
were impossible to duplicate or falsify.” (Favila v. Souther,
supra, B230264.)

                                 3
summary judgment was granted, and she was dismissed from the
lawsuit in January 2009. The Estate did not appeal that ruling.
      At the conclusion of a lengthy bench trial ultimately held in
the action, the court found in favor of the Estate on its claims for
breach of contract, conversion, fraud and breach of fiduciary duty
and awarded it $4,003,311.70 in damages against Souther and
Get Flipped: $1,700,191 in compensatory damages, which
included both the value of the Estate’s interest in the wrongfully
transferred assets of Motion Graphix and the Estate’s share of
the income generated by those assets from which it had been
excluded; $2,125,238.70 in punitive damages; and $177,882 in
prejudgment interest. The court also imposed both a constructive
trust and resulting trust in favor of the Estate on all the Motion
Graphix assets fraudulently transferred to Get Flipped including
computer equipment, software code, trademarks, copyrights and
license agreements.
      On appeal we rejected most of Souther’s challenges to the
judgment but agreed the trial court had erroneously imposed a
constructive/resulting trust on 100 percent of the assets
improperly transferred to Get Flipped, rather than 51 percent.
In addition, we held the Estate was not entitled to both damages
to compensate it for the improper transfer of assets to Get
Flipped and a constructive trust on those same assets: The
Estate was required to elect its remedy. Accordingly, we
remanded the matter for further proceedings to address those
issues.
      Following additional briefing and oral argument on
remand, the trial court entered an amended judgment that
reduced the compensatory damage award by $530,677, the
valuation of the Estate’s 51 percent interest in the assets

                                 4
wrongfully transferred to Get Flipped, eliminated the resulting
trust and imposed a constructive trust on all assets of Motion
Graphix held by Get Flipped. There was no change in the
punitive damage award. On Souther’s appeal from the amended
judgment we held it was proper for the trial court both to impose
a constructive trust on the assets Souther had misappropriated
from Motion Graphix and to award consequential damages for
the Estate’s lost income during the period Souther and
Get Flipped held and used those assets. However, we held (and
the Estate conceded) the trial court had again mistakenly
imposed a constructive trust on 100 percent of the assets
improperly transferred to Get Flipped. We modified the amended
judgment to reflect the constructive trust imposed in favor of the
Estate and against Souther and Get Flipped covered an
undivided 51 percent (not 100 percent) of all the assets of Motion
Graphix fraudulently transferred to Get Flipped and affirmed the
amended judgment as modified.
      2. The Moofly Productions Lawsuit
       Following entry of the judgment in the Estate’s lawsuit
against Souther and Get Flipped, Souther and Pasquarella
created Moofly Productions, LLC, doing business as 3D Cheeze.
Pasquarella owned 90 percent of the new company; Souther
owned the remaining 10 percent. In 2011 Get Flipped announced
on social media it was rebranding as Moofly/3D Cheeze and
transferred all of its assets to Moofly Productions. (See Moofly
Productions, LLC v. Favila (2020) 46 Cal.App.5th 1, 6.) In 2013
Moofly Productions sued Favila for intentional interference with
prospective economic advantage, unfair competition and related
claims based on actions taken by the Estate when attempting to
collect its judgment in the Get Flipped litigation. The Estate

                                5
filed a cross-complaint alleging causes of action against Moofly
Productions, Pasquarella and Souther (by then, Pasquarella’s
former husband) for fraudulent conveyance, conversion, unfair
competition and copyright infringement. (Ibid.)
       Following removal to federal court based on the federal
copyright claim and remand to state court, the trial court granted
the Estate’s motion to dismiss Moofly Production’s complaint as a
discovery sanction. (Moofly Productions, LLC v. Favila, supra,
46 Cal.App.5th at p. 6.) In a bifurcated bench trial on the
Estate’s fraudulent conveyance claim, the court found that the
transfer of assets from Get Flipped to Moofly Productions was a
fraudulent conveyance designed to prevent the Estate from
collecting on the judgment in the Get Flipped action. The court
granted a mandatory injunction directing Moofly Productions,
Pasquarella and Souther to transfer back to Get Flipped all the
assets that had previously been transferred from Get Flipped to
Moofly Productions. The court also ordered restitution of the
profits earned from the fraudulently transferred property and
issued a prohibitory injunction to prevent any further transfers of
property. (Id. at p. 7.) The Estate voluntarily dismissed its
remaining causes of action. (Id. at p. 7, fn. 3.) Our colleagues in
Division One of this court affirmed the judgment on appeal. (Id.
at p. 13.) 4

4     In rejecting the argument the fraudulent conveyance action
should have been tried to a jury, the court of appeal noted, at the
hearing in the trial court to determine that question, “the Estate
stipulated that it was not seeking monetary damages for
fraudulent transfer, and the trial court did not award the Estate
any damages.” Accordingly, the court explained, “We need not
and do not decide whether a jury trial would have been required

                                 6
      3. The Motions To Further Amend the Get Flipped
         Judgment
          a. Addition of Moofly Productions as a judgment debtor
      On July 17, 2019, several months after entry of judgment
in the Moofly Productions lawsuit and while the appeal was
pending, the Estate moved to amend the judgment in the Get
Flipped lawsuit to include Moofly Productions as a judgment
debtor pursuant to section 187. 5 The court granted the
unopposed motion on August 12, 2019, explaining in its ruling
that, under the “successor corporation” theory, “when a
corporation transfers all of its assets to another corporation
constituting its ‘mere continuation,’ the latter is also liable for the
former’s debts and liabilities. [Citation.] ‘A mere continuation’
may be found where one corporation transfers all of its assets to
another corporation in order to fraudulently escape liability for
its debts. [Citation.] [¶] Here, plaintiff has established by a
preponderance of the evidence that Moofly is the successor of
judgment debtor Get Flipped.”
          b. Addition of Pasquarella as a judgment debtor
      On December 11, 2019 the Estate moved pursuant to
section 187 to further amend the judgment in the Get Flipped
lawsuit by adding Pasquarella as a judgment debtor on the
ground Pasquarella was the alter ego of judgment debtor Moofly
Productions. Hearing on the motion was set for January 6, 2020.

if the Estate had not waived this claim.” (Moofly Productions,
LLC v. Favila, supra, 46 Cal.App.5th at p. 9, fn. 6.)
5    The judgment, originally entered on November 22, 2010,
had been renewed on June 17, 2019.

                                  7
       The Estate supported its motion with a declaration from
Bernadette Bolan, one of its attorneys, who explained, when the
Estate attempted to enforce the August 12, 2019 amended
judgment through bank levy, it discovered Pasquarella had set
up bank accounts in the name of 3D Cheeze, Moofly Productions’
registered fictitious business name, but tied the accounts to her
personal social security number, rather than Moofly Productions’
tax identification number. When the Estate attempted to levy on
several accounts in 3D Cheeze’s name, the bank informed the
Estate’s counsel it could not locate any responsive account
because the social security or tax identification number(s) on the
accounts had to match a named judgment debtor. Thus, the
Estate argued, Moofly Productions’ assets were, in fact, being
held by Pasquarella as an individual.
       The Estate also argued Pasquarella was the alter ego of
Moofly Productions, contending Moofly Productions was
inadequately capitalized because all its assets were held by
Pasquarella; Pasquarella had commingled Moofly Productions’
assets with her own; Pasquarella used Moofly Productions and
3D Cheeze as mere shell entities; and Moofly Productions had
failed to observe corporate formalities and operated out of
Pasquarella’s home. In addition, because of the fraudulent
transfer by Get Flipped, effected with the assistance of
Pasquarella, the underlying judgment remained uncollected,
which would lead to an inequitable result unless Pasquarella was
found personally responsible based on her control of the assets
that had flowed from Motion Graphix to Get Flipped to Moofly
Productions to Pasquarella. These contentions were supported
by various exhibits attached to Bolan’s declaration.

                                8
       On the morning of January 6, 2020 Pasquarella filed what
she captioned a preliminary opposition to the motion to further
amend the judgment and a request for a continuance of the
hearing on the Estate’s motion. Pasquarella argued the motion
was barred by res judicata based on her successful motion for
summary judgment and the ensuing final judgment. She also
argued the motion was procedurally improper because it had not
been served on her counsel (that is, counsel representing her in
the Moofly Productions litigation). 6 Finally, although stating she
had not had sufficient time since learning of the motion to
marshal the relevant documents, Pasquarella disputed the
Estate’s assertion the Moofly Productions’ bank records used her
personal social security number.
       The minute order from the January 6, 2020 hearing states
the court received and considered the late-filed preliminary
opposition and heard argument from counsel. 7 The court granted
the motion and signed a further amended judgment the same day
to include Pasquarella as a judgment debtor. As further
amended the judgment states, “The Judgment against all
judgment debtors consists of: [¶] (1) The constructive trust
imposed in connection with the seventh cause of action; and [¶]

6     The proof of service attached as an exhibit to Pasquarella’s
preliminary opposition indicated the motion had been served by
hand delivery on Souther, Get Flipped through its registered
agent for service of process, Moofly Productions through its
registered agent for service of process (Pasquarella at an address
in Ojai, California), and “Judgment Debtor in Pro Per,” at the
Ojai address.
7     There is no reporter’s transcript of the hearing.

                                 9
(2) $7,502,656.00 as the amount entered when the judgment was
renewed on June 17, 2019.”
       Pasquarella filed a timely notice of appeal.
                           DISCUSSION
      1. Governing Law and Standard of Review
       Section 187 provides, “When jurisdiction is, by the
Constitution or this Code, or by any other statute, conferred on a
Court of 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 is 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.” Pursuant to its authority under section 187, the trial
court may amend a judgment to add a judgment debtor. (Triyar
Hospitality Management, LLC v. WSI (II)-HWP, LLC (2020)
57 Cal.App.5th 636, 641 (Triyar); Relentless Air Racing, LLC v.
Airborne Turbine Ltd. Partnership (2013) 222 Cal.App.4th 811,
815 (Relentless Air Racing); Greenspan v. LADT LLC (2010)
191 Cal.App.4th 486, 508.)
       As this court explained in Carolina Casualty Ins. Co. v.
L.M. Ross Law Group, LLP (2012) 212 Cal.App.4th 1181, 1188-
1189 (Carolina Casualty), “As a general rule, a court may amend
its judgment at any time so that the judgment will properly
designate the real defendants. . . . Judgments may be amended
to add additional judgment debtors on the ground that a person
or entity is the alter ego of the original judgment debtor . . . .
Amendment of a judgment to add an alter ego is an equitable
procedure based on the theory that the court is not amending the
judgment to add a new defendant but is merely inserting the
correct name of the real defendant. [Citation.] In addition, even

                                  10
if all the formal elements necessary to establish alter ego liability
are not present, an unnamed party may be included as a
judgment debtor if the equities overwhelmingly favor the
amendment and it is necessary to prevent an injustice.” (Internal
quotation marks omitted.) (See Carr v. Barnabey’s Hotel Corp.
(1994) 23 Cal.App.4th 14, 21-23 [although the evidence in the
record was insufficient to establish that Peppercorn Ltd. No. 9
was the alter ego of defendant Barnabey’s Hotel Corp., “the
equities overwhelmingly favor affirmance”; “[a] reversal of that
ruling would work an injustice, and we decline to make such an
order”].)
        The trial court’s decision to amend a judgment to add a
judgment debtor is reviewed for an abuse of discretion. (Triyar,
supra, 57 Cal.App.5th at p. 640; Relentless Air Racing, supra,
222 Cal.App.4th at p. 815; see Misik v. D’Arco (2011)
197 Cal.App.4th 1065, 1073 [“[i]n order to see that justice is done,
great liberality is encouraged in the allowance of amendments
brought pursuant to Code of Civil Procedure section 187”].)
Factual findings necessary to the court’s decision are reviewed to
determine whether they are supported by substantial evidence.
(Highland Springs Conference & Training Center v. City of
Banning (2016) 244 Cal.App.4th 267, 280; Carolina Casualty,
supra, 212 Cal.App.4th at p. 1189.)
      2. Adding Pasquarella as a Judgment Debtor Is Neither
         Unnecessary Nor Unfair
      Although Pasquarella raises several specific legal
challenges to the trial court’s order adding her as a judgment
debtor, her primary argument on appeal is that the order
constituted an unjustified expansion of the trial court’s
concededly broad authority under section 187 that was both

                                 11
unnecessary and unfair in light of her earlier successful motion
for summary judgment on the merits in this case and the Estate’s
judgment against her in the Moofly Productions fraudulent
conveyance lawsuit. 8 In this regard, Pasquarella emphasizes she
does not object to being added to the constructive trust portion of
the Get Flipped judgment, only to the award of monetary
damages.
       The trial court’s order amending the judgment to add
Pasquarella as a judgment debtor notwithstanding her successful
summary judgment motion is not unprecedented. In Danko v.
O’Reilly (2014) 232 Cal.App.4th 732 Michael Danko sued his
former law firm, O’Reilly & Collins, and its controlling
shareholder, Terry O’Reilly, for breach of contract and quantum
meruit seeking unpaid compensation for his work while at the
firm. The trial court granted O’Reilly’s motion for a directed
verdict. The jury then found in favor of Danko. After a judgment
for more than $2.4 million was entered against the law firm (id.
at p. 737), Danko moved to amend the judgment to add O’Reilly
as a judgment debtor. In his motion Danko alleged O’Reilly had
systematically drained the law firm of all its assets, thereby
knowingly frustrating Danko’s ability to collect the judgment.
(Id. at p. 738.) The trial court granted the motion and amended
the judgment to add O’Reilly as a judgment debtor. (Id. at
p. 744.) The court of appeal affirmed, explaining Danko’s
addition of O’Reilly as a judgment debtor did not increase the
amount of the judgment and was unrelated to the liability
determinations made at trial. (Id. at 751.) Instead, the trial
court had found adding the judgment debtor was necessary to

8    In her opening brief Pasquarella describes her appeal as
presenting “a unique question of first impression.”

                                12
avoid sanctioning a fraud or promoting an injustice, a
determination the court of appeal ruled was well within the
court’s discretion on the record before it. (Id. at p. 752.)
       Similarly, in Wells Fargo Bank, N.A. v. Weinberg (2014)
227 Cal.App.4th 1 (Wells Fargo) the bank sued Steven J.
Weinberg and his law firm for repayment of $57,000 from a
business line of credit. Only the law firm was found liable. The
bank moved to amend the judgment to add Weinberg as a
judgment debtor on an alter ego theory. The motion was granted;
and the court of appeal affirmed, holding, “[T]he motion to add
Weinberg to the judgment sought a remedy, not for breach of
contract, but for Weinberg’s exercise of control over the law
corporation that deprived Wells Fargo of the ability to collect the
judgment against the law corporation for breach of contract.
These are separate and distinct wrongs.” (Id. at p. 7.)
       As was true as to the individual defendants in Danko v.
O’Reilly, supra, 232 Cal.App.4th 732 and Wells Fargo, supra,
227 Cal.App.4th 1, in granting Pasquarella’s summary judgment
motion in 2009, the trial court determined she was not personally
liable for the actions at issue in this lawsuit, a decision the Estate
did not challenge on appeal. However, as in those cases, the
theory that supports adding her as a judgment debtor is not her
personal culpability for the breach of contract, conversion, fraud
and breaches of fiduciary duty committed by her former
husband—the issue resolved in her favor on summary
judgment—but Pasquarella’s postjudgment actions that have
effectively made her the successor to Get Flipped. (See Danko, at
p. 742 [the effect of a section 187 motion to add a judgment
debtor on alter ego grounds is not to add a new defendant but to
insert the correct name of the real defendant].) If that theory is

                                 13
legally sound and factually supported, it is not unfair to hold her
responsible for Get Flipped’s obligations on the judgment.
       Neither is the order adding Pasquarella as a judgment
debtor unnecessary. As modified by our 2015 opinion the
November 2010 judgment in this case had two primary
components: a constructive trust covering 51 percent of the
assets of Motion Graphix fraudulently transferred by Souther to
Get Flipped and a money judgment against Souther and Get
Flipped for the profits generated by those assets through the time
of judgment. The judgment in the Moofly Productions litigation,
in essence, simply followed the assets subject to the constructive
trust from Get Flipped to Moofly Productions and from Moofly
Productions to Pasquarella.
       As discussed, in the fraudulent conveyance action the
Estate was awarded restitution for profits earned from the assets
fraudulently transferred from Get Flipped to Moofly Productions
after the Get Flipped judgment was entered. Although the
Estate waived any claim it might have for additional monetary
damages suffered as a result of the fraudulent conveyance,
neither the restitution awarded nor the damage claims waived
included the profits Get Flipped had earned with the Motion
Graphix assets, the basis for the damage award in the Get
Flipped judgment. Contrary to Pasquarella’s contention, because
the Moofly Productions judgment does not obligate Pasquarella to
pay that damage award, the Moofly Productions judgment did not
make the Estate whole. 9

9      Because the portion of the Get Flipped judgment awarding
damages and the restitution awarded in the Moofly Productions
litigation cover different time periods, Pasquarella’s concern
about a potential double recovery by the Estate is illusory.

                                14
      3. The Order Is Not Barred by Claim or Issue Preclusion
       Pasquarella concedes it would have been proper for the
Estate to move to add her as a judgment debtor in 2011 or 2012,
shortly after Moofly Productions was formed. However,
Pasquarella insists, by instead filing its cross-complaint for
fraudulent conveyance in the Moofly Productions litigation and
obtaining a judgment against her in that action, the Estate
triggered, in some not quite defined combination, claim
preclusion, issue preclusion and the bar of the one judgment rule.
None of those contentions has merit.
       “Claim preclusion ‘prevents relitigation of the same cause of
action in a second suit between the same parties or parties in
privity with them.’ [Citation.] Claim preclusion arises if a second
suit involves (1) the same cause of action (2) between the same
parties [or those in privity with them] (3) after a final judgment
on the merits in the first suit. [Citations.] If claim preclusion is
established, it operates to bar relitigation of the claim altogether.”
(DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 824, italics
omitted (DKN Holdings); accord, Mycogen Corp. v. Monsanto Co.
(2002) 28 Cal.4th 888, 896.)
       Issue preclusion “prohibits the relitigation of issues argued
and decided in a previous case even if the second suit raises a
different cause of action. [Citation.] Under issue preclusion, the
prior judgment conclusively resolves an issue actually litigated
and determined in the first action.” (DKN Holdings, supra,
61 Cal.4th at p. 824; accord, Boeken v. Philip Morris USA, Inc.
(2010) 48 Cal.4th 788, 797.) The doctrine applies “(1) after final
adjudication (2) of an identical issue (3) actually litigated and
necessarily decided in the first suit and (4) asserted against one
who was a party in the first suit or one in privity with that party.”

                                 15
(DKN Holdings, at p. 825.) The doctrine differs from claim
preclusion in that it operates as a conclusive determination of
issues; it does not bar a cause of action. (Ibid.) Also, unlike claim
preclusion, “issue preclusion can be invoked by one not a party to
the first proceeding” (id. at p. 826) and “operates ‘as a shield
against one who was a party to the prior action to prevent’ that
party from relitigating an issue already settled in the previous
case” (id. at p. 827).
       The doctrine of claim preclusion does not bar the
amendment of the Get Flipped judgment to add Pasquarella as a
judgment debtor whether one looks to the Get Flipped lawsuit or
the Moofly Productions litigation. With respect to the Get
Flipped action, the motion to add Pasquarella as a judgment
debtor did not seek to relitigate the substantive causes of action
resolved in her favor on summary judgment. A motion to add a
judgment debtor under equitable principles pursuant to
section 187 does not involve the same cause of action (or the same
“primary right”) for purposes of claim preclusion as asserted on
the merits in the underlying lawsuit. (See Danko v. O’Reilly,
supra, 232 Cal.App.4th at p. 250 [“the alter ego issue did not
qualify as either ‘“‘the same cause of action’”’ or ‘“‘a different
cause of action’”’ that would activate the protection of res judicata
or collateral estoppel”]; Wells Fargo, supra, 227 Cal.App.4th at
p. 7 [“[r]es judicata also does not operate because Weinberg’s
alter ego conduct was a separate and distinct harm from the law
corporation’s breach of contract”]; see generally Slater v.
Blackwood (1975) 15 Cal.3d 791, 795 [“‘a judgment for the
defendant is a bar to a subsequent action by the plaintiff based
on the same injury to the same right’”].) And, obviously, the
Estate could not have litigated the issue of Pasquarella’s

                                 16
postjudgment conduct prior to the entry of the judgment.
(See Greenspan v. LADT LLC, supra, 191 Cal.App.4th at p. 514
[“‘Res judicata is not a bar to claims that arise after the initial
complaint is filed. . . . The general rule that a judgment is
conclusive as to matters that could have been litigated “does not
apply to new rights acquired pending the action which might have
been, but which were not, required to be litigated”’”].)
       As to the Moofly Productions litigation, the cross-complaint
filed by the Estate did not seek to recover for wrongful actions
that had occurred prior to the entry of judgment in the Get
Flipped lawsuit. That is, the causes of action asserted against
Pasquarella in the Moofly Productions lawsuit did not implicate
any cause of action that had been litigated, or could have been
litigated in the Get Flipped litigation prior to the entry of the
judgment in November 2010. Nor did the cross-complaint seek a
determination that Pasquarella was the alter ego of Moofly
Productions, which, in any event, is not a “cause of action.”
(See Hennessey’s Tavern, Inc. v. American Air Filter Co. (1988)
204 Cal.App.3d 1351, 1358-1359 [“[a]n alter ego defendant has no
separate primary liability to the plaintiff”; “[a] claim against a
defendant, based on an alter ego theory, is not itself a claim for
substantive relief”].)
       Pasquarella’s argument the doctrine of issue preclusion
somehow barred the motion to add her as a judgment debtor is
equally unpersuasive. None of the facts actually determined in
Pasquarella’s favor in her successful summary judgment
motion—that is, her lack of personal responsibility for the breach
of contract, conversion, fraud or breach of fiduciary duty upon
which the judgment in favor of the Estate was ultimately
entered—was pertinent to the issues raised by the motion to add

                                17
her as a judgment debtor. In contrast, her active participation in
fraudulently transferring assets from Get Flipped to Moofly
Productions to prevent the Estate from collecting the Get Flipped
judgment was highly material to the motion to amend the
judgment, as the trial court found; but those factual issues were
resolved against her. Issue preclusion supported granting the
motion, not denying it.
      4. The Record Adequately Supports the Trial Court’s Order
       To prevail on a motion to add a judgment debtor, the
judgment creditor generally must show, by a preponderance of
the evidence, that “(1) the parties to be added as judgment
debtors had control of the underlying litigation and were
virtually represented in that proceeding; (2) there is such a unity
of interest and ownership that the separate personalities of the
entity and the owners no longer exist; and (3) an inequitable
result will follow if the acts are treated as those of the entity
alone.” (Relentless Air Racing, supra, 222 Cal.App.4th at pp. 815-
816.)
       As the Estate suggests, our ability to evaluate the adequacy
of its evidentiary showing and the trial court’s subsequent
exercise of discretion in granting the motion is limited by the
absence of a reporter’s transcript of the hearing on the motion or
a settled statement prepared pursuant to California Rules of
Court, rule 8.137. However, since it appears the court’s decision
rested on the declarations submitted on behalf of the Estate and
Pasquarella, we reject the Estate’s argument the issue of
sufficiency of the evidence has been forfeited.

                                18
       The evidence before the court was sufficient to support its
decision. 10 The Estate presented evidence that Moofly
Productions was inadequately capitalized since all of its assets
were being controlled by Pasquarella and, as a corollary, that the
entity and Pasquarella had commingled funds. Other factors
considered in alter ego cases, an arguable lack of adherence to
corporate formalities and business registration laws, also
supported the court’s determination. Most importantly, as
established by the fraudulent conveyance judgment when
considered together with the additional information concerning
Pasquarella’s control of the Moofly Productions’ bank accounts,
failing to formally recognize Pasquarella as a judgment debtor

10     As discussed, the Estate personally served the motion to
amend on Pasquarella, at the time no longer a party in the Get
Flipped litigation, and not her counsel of record in the Moofly
Productions litigation—a procedure that was entirely proper,
although perhaps not a model of professional courtesy.
(Cf. §§ 415.10 [requiring personal service of papers initiating a
lawsuit], 684.020, subd. (a) [requiring postjudgment papers be
served on postjudgment debtor, not debtor’s counsel, absent a
request on file with the court].) (Pasquarella was also served as
the registered agent for judgment debtor Moofly Productions.)
Based on her attorney’s lack of time to prepare a more complete
response to the motion, on the day of the hearing Pasquarella
requested a continuance and an opportunity to file a
supplemental opposition. The trial court denied the request.
Although these circumstances were described in Pasquarella’s
opening brief, she did not argue the denial of her request for a
continuance was error and a ground for reversal until her reply
brief. The issue has been forfeited. (Swain v. LaserAway
Medical Group, Inc. (2020) 57 Cal.App.5th 59, 72; Golden Door
Properties, LLC v. County of San Diego (2020) 50 Cal.App.5th
554-555.)

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would produce an inequitable result, effectively preventing the
Estate from enforcing the judgment it had obtained against Get
Flipped, precisely the corrupt goal Pasquarella sought to achieve.
       Pasquarella’s complaint there was something inappropriate
about the Estate and the trial court relying on evidence of her
wrongdoing that postdates the Get Flipped judgment and was at
issue in the Moofly Productions litigation—even if not technically
barred by claim or issue preclusion—misperceives the issue
presented by the motion to amend. Pasquarella was not added as
a judgment debtor as the alter ego of Get Flipped during the
period at issue in the Get Flipped litigation, but as the alter ego
of Moofly Productions, which was found, as a result of the
Estate’s unopposed motion, to be the postjudgment corporate
successor to Get Flipped. Necessarily it was postjudgment
actions that led to Moofly Productions and Pasquarella being
added to the judgment.
       The evidence that supports the first prong of the general
test for adding an alter ego as a judgment debtor—control of the
underlying litigation—is less compelling. Pasquarella was
dismissed from the lawsuit more than a year before the judgment
was entered against Souther and Get Flipped, while her active
role in fraudulently transferring assets away from Get Flipped to
evade enforcement of the judgment occurred only later. Yet
throughout the litigation Pasquarella was one of the two owners
of Get Flipped and its secretary and chief financial officer.
Absent contrary evidence, it was not unreasonable for the trial
court to find this aspect of the general test for adding a judgment
debtor had been satisfied.
       More importantly, the issue of control is not significant
under the circumstances here. Pasquarella was added as a

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judgment debtor as the alter ego of Moofly Productions, the
postjudgment corporate successor to Get Flipped. It was not
necessary to find Moofly Productions had control of the
underlying litigation to add it as a judgment debtor. Nor is such
a finding necessary as to its alter ego. In any event, as we held in
Carolina Casualty, supra, 212 Cal.App.4th at page 1189, a
judgment debtor may be added if the equities overwhelmingly
favor the amendment and it is necessary to prevent an injustice,
even if all the formal elements generally necessary to establish
alter ego liability are not present. Under this more flexible
standard, the trial court acted well within its discretion, based on
the record before it, to grant the motion to amend the judgment.
      5. The Amendment Is Not Barred by Laches
      Finally, Pasquarella’s assertion the motion was barred by
laches because it was not filed until 10 years after entry of the
judgment in the Get Flipped litigation lacks merit. (Lopez v.
Escamilla (2020) 48 Cal.App.5th 763, 766 [adding an alter ego
defendant may be done at any time, whether during the first
10 years following entry of a money judgment or after the
judgment has been renewed].)
                         DISPOSITION
       The order amending the judgment is affirmed. The Estate
is to recover its costs on appeal.

                                      PERLUSS, P. J.

      We concur:

            SEGAL, J.                 FEUER, J.

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