Court Opinion

ID: 4583313
Source: CourtListenerOpinion
Date Created: 2020-11-03 20:02:20.159978+00
Date Added: 2024-06-11T13:42:51.860172
License: Public Domain

Filed 11/3/20 Choy v. Ribeiro CA3
                                                NOT TO BE PUBLISHED
           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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115.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
                                            THIRD APPELLATE DISTRICT
                                                           (El Dorado)
                                                                 ----

SEAN CHOY et al.,                                                                              C080715

                   Plaintiffs and Respondents,                                  (Super. Ct. No. PC20120295)

         v.

JOHNNY R. RIBEIRO et al.,

                   Defendants and Appellants.

         This appeal questions who is liable for the severance pay owed two employees
under their employment contracts—their employer alone or also their employer’s owner
and president? Johnny R. Ribeiro, the company’s president, signed one of these contracts
in his individual capacity and in his representative capacity on behalf of the company.
He signed the other contract in his individual capacity and in his capacity as the trustee
for his trust, the Johnny R. Ribeiro Separate Property Trust (the Trust), which owns the
company. Under both contracts, Ribeiro and the company offered separate performances
to the two employees—the company would pay the employees’ salary, bonuses, and

                                                                   1
severance pay in the event of early termination, and Ribeiro would pay the employees a
portion of certain distributions he received relating to the company’s projects. The Trust,
although a signatory to one of the contracts, was never mentioned in the body of either
contract. The issue raised here is whether Ribeiro and the Trust, to the extent they signed
these contracts, are jointly and severally liable for the company’s obligations under the
contracts, even though neither contract speaks to this issue.
       The trial court found they were, reasoning that Ribeiro, the Trust, and the
company were all alter egos of one another. The two employees agree with the finding of
liability, though they rely on different grounds. First, they contend Ribeiro and the Trust
are the company’s successors and assigns and are, for that reason, liable for the
company’s obligations. Second, they claim Ribeiro and his Trust, to the extent they
signed the employment contracts, agreed to act as guarantors who would cover the
company’s obligations in the event of the company’s default.
       Like Ribeiro and the Trust, we find none of these three theories of liability
persuasive. First, the two employees offered insufficient evidence to show that Ribeiro,
the Trust, and the company were all alter egos of one another. Among other
shortcomings, they failed to provide any evidence to show Ribeiro or the Trust acted in
bad faith—a necessary requirement to invoke the alter ego doctrine.
       Second, we reject the employees’ argument that Ribeiro and the Trust are the
company’s successors and assigns. According to the employees, because the Trust owns
the company and Ribeiro is the Trust’s beneficiary, it follows that Ribeiro and the Trust
are the company’s successors and assigns. But the employees confuse a company’s
successors and assigns with its shareholders. A company’s successor or assignee is a
separate entity that acquires some or all the company’s assets and liabilities. But a
shareholder is different. Although a shareholder may wholly own a corporation, it does
not for that reason own the corporation’s assets and liabilities. The employees’ contrary

                                                 2
position is inconsistent with the basic corporate principle that shareholders are not
personally liable for a corporation’s debts.
       Finally, we reject the employees’ contention that Ribeiro is liable as a guarantor
who promised to answer for the company’s debts, though we find the Trust’s potential
liability on this ground more complicated and ultimately conclude that remand is
appropriate to determine the Trust’s liability, if any. The employees’ argument here is
principally premised on the rule that an officer of a company who twice signs a
promissory note—once in his representative capacity and once in his individual
capacity—is presumed to have personally endorsed the note rather than merely witnessed
it. In addressing this argument, we distinguish between Ribeiro and the Trust. Ribeiro,
to begin, did not simply affix his personal signature to his company’s contracts. He
instead signed contracts that imposed certain obligations on him personally and separate
obligations on the company. Under established rules of contract interpretation, Ribeiro’s
and his company’s separate promises under the contracts created several, not joint,
obligations. But the Trust sits in a different position. Unlike Ribeiro, the Trust promised
nothing under the one contract it signed, and it was not once mentioned in the body of
either contract. These facts created an ambiguity about the Trust’s intended role that
warranted the consideration of extrinsic evidence, if any were offered, to resolve the
ambiguity. Because, however, the court below improperly refused to consider Ribeiro
and the Trust’s offered extrinsic evidence about this ambiguity, we remand on this point
to allow the court to reevaluate the Trust’s potential liability in light of this evidence.
                                      BACKGROUND
                                               I
       Ribeiro Development, Inc. (RDI) develops and manages commercial real estate.
Ribeiro is its president and the Trust is its owner.

                                                   3
       Sean Choy and Joseph Oloriz joined RDI as employees in 2003. Oloriz joined as
the head of RDI’s design department, and Choy joined as a project manager and was later
promoted to vice president of the company.
       Both Oloriz and Choy at some point entered into multiyear employment
agreements with RDI that were largely identical. Each contract included three parties:
(1) the “Employee,” defined as either Choy or Oloriz; (2) the “Employer,” defined as
RDI; and (3) “Ribeiro,” defined as Ribeiro. Under their respective contracts, Choy and
Oloriz would perform services on behalf of both RDI and Ribeiro. Choy’s contract, for
example, noted that RDI “wishe[d]” to use Choy’s “experience and skills . . . in various
aspects of its business and in the business of its affiliates,” and Ribeiro, “either directly or
indirectly through controlled entities,” also “wish[ed]” to use Choy’s “expertise and skills
. . . in locating, acquiring, planning, developing, and, constructing, commercial real estate
projects.” The contract added that Ribeiro, through various LLCs he owned, intended to
purchase real estate and then contract with RDI to develop these properties, with Choy
playing a supervisory role in RDI’s development of the properties. Oloriz’s contract,
although phrased somewhat differently, was substantively similar. Like Choy’s, Oloriz’s
agreement noted that RDI “wishe[d]” to use his “experience and skills . . . in design and
construction related services.” And like Choy’s, Oloriz’s contract signaled that he would
play a role in RDI’s development of certain real estate projects that Ribeiro’s LLCs
owned.
       In exchange for Choy’s and Oloriz’s services, RDI agreed to pay their base salary
and bonuses and Ribeiro agreed to grant them a share of the distributions he personally
received from his LLCs. Specifically, RDI would pay Choy’s and Oloriz’s base salary
and bonuses, and in the event of their early termination, would also pay their “current
base salary for three (3) years” following termination. Ribeiro, in turn, would pay Choy
and Oloriz 10 percent of the distributions he received from his LLCs.

                                                   4
       Choy and Oloriz signed their respective contracts in their individual capacities,
and Ribeiro signed each twice in different capacities. He signed Oloriz’s contract in his
individual capacity and in his representative capacity on behalf of RDI. And he signed
Choy’s contract in his individual capacity and in his representative capacity on behalf of
the Trust.
       In late 2010—about three years before the two employment contracts were to
expire—RDI fired both Choy and Oloriz. Their terminations followed a steep decline in
RDI’s fortunes following the recession that began in 2008. Before the recession, RDI
had over 20 employees. But following years of substantial losses, RDI was left with only
four employees at the time of Choy’s and Oloriz’s terminations. RDI declined to pay
either Choy or Oloriz their salaries following their terminations.
                                             II
       Shortly after being fired, Choy and Oloriz filed suit against RDI, Ribeiro, the
Trust, and several others,1 alleging, among other things, that Ribeiro and the Trust were
obligated to pay their “current base salary for three (3) years” following their
terminations per the terms of their employment agreements. Their complaint also
included several other causes of action that were later stayed after the court found them
subject to arbitration.
       After a bench trial, on April 17, 2015, the trial court issued a statement of intended
decision finding both Choy and Oloriz were entitled to severance pay under the terms of
their employment contracts, though it did not say which of the three defendants were
responsible for paying these amounts. The court notified the parties that they could file

1      Choy and Oloriz also named Ribeiro’s father—the similarly named Johnny A.
Ribeiro—and his father’s trust in their complaint. But Choy and Oloriz later dropped
both from their suit.

                                                  5
“a proposal or objection to its contents within the time limits specified by applicable
rule,” and if they did not, the court’s intended decision would become its statement of
decision.
       Shortly after, RDI, Ribeiro, and the Trust requested a statement of decision per
California Rules of Court,2 rule 3.1590(d)—a rule allowing parties, within 10 days of the
service of a tentative decision, to request a statement of decision addressing specified
controverted issues. Relying on this authority, they asked the court, among other things,
to issue a decision addressing whether RDI alone was responsible for paying Choy’s and
Oloriz’s severance pay—something the court’s April 17, 2015 statement of intended
decision did not cover. In response, the court updated its earlier statement of intended
decision and, in its June 3, 2015 statement of decision, held all defendants jointly and
severally liable for paying the ordered severance amounts. It reasoned that sufficient
evidence in the record supported a finding that RDI, Ribeiro, and the Trust should be
jointly and severally liable, and to the extent defendants sought to rebut this evidence, it
was too late as any argument on that point was now waived.
       On June 17, 2015, RDI, Ribeiro, and the Trust filed an objection to the court’s
statement of decision per rule 3.1590(g)—a rule allowing parties to file objections to a
“proposed statement of decision” within 15 days of service of the decision. Among other
things, RDI, Ribeiro, and the Trust contested the court’s finding that they had not raised
at trial the question of who should be liable for severance pay. In their view, they had
offered significant evidence to show that only RDI should be liable to pay any ordered
severance amount. But the trial court rejected these objections, finding them untimely.
The court reasoned that its April 17, 2015 statement of intended decision, not the later
June 3, 2015 statement of decision, was the “proposed statement of decision” that

2      All further rule references are to the California Rules of Court.

                                                  6
triggered the 15-day clock of rule 3.1590(g). Even if the objections were timely,
moreover, the court wrote that it would have rejected them anyway. Echoing its June 3,
2015 statement of decision, the court explained that its decision was supported by the
evidence offered at trial, and to the extent defendants sought to rebut this evidence, those
arguments were now untimely.
       RDI, Ribeiro, and the Trust afterward filed a motion for a new trial or a
modification of the statement of decision under Code of Civil Procedure section 657 and
662, again contending that RDI alone should be liable to pay the ordered severance
amounts. But the court again found that RDI, Ribeiro, and the Trust had failed to
preserve the issue by “not present[ing] [it] at trial” and “only briefly and incompletely
rais[ing]” the issue in their pretrial brief. The court then concluded that substantial
evidence supported a finding that Ribeiro was jointly and severally liable for both Choy’s
and Oloriz’s severance pay. It also found sufficient evidence supported a finding that the
Trust was jointly and severally liable for Choy’s severance pay, since it had signed
Choy’s employment agreement.
       Following Choy’s and Oloriz’s dismissal of their remaining claims that had earlier
been stayed pending arbitration, the trial entered a final judgment in favor of Choy and
Oloriz. The court found RDI, Ribeiro, and the Trust were jointly and severally liable to
pay the ordered severance amounts—$466,856.40 to Choy and $350,142.30 to Oloriz.
       Ribeiro and the Trust timely appealed the court’s judgment.
                                STANDARD OF REVIEW
       Our standard of review on this appeal is generally de novo. We review de novo a
trial court’s application of the law to undisputed facts. (Ghirardo v. Antonioli (1994) 8
Cal. 4th 791, 799.) We also generally review de novo a trial court’s interpretation of a
contract, as the meaning of a contract is a question of law. (Parsons v. Bristol
Development Co. (1965) 62 Cal. 2d 861, 866.) But in the event the parties have offered
conflicting extrinsic evidence to aid in the contract’s interpretation, we will affirm the

                                                  7
lower court’s ruling on that conflict if supported by substantial evidence. (In re Marriage
of Fonstein (1976) 17 Cal. 3d 738, 746-747.) We will also affirm the trial court’s findings
on other disputed factual issues if supported by substantial evidence. (Winograd v.
American Broadcasting Co. (1998) 68 Cal. App. 4th 624, 632.)
                                       DISCUSSION
                                              I
       At the outset, we consider Ribeiro and the Trust’s claim that the trial court erred in
finding they waived their argument that liability should have been limited to RDI alone.
Ribeiro and the Trust contend this error was twofold. First, they assert the court, in its
June 3, 2015 statement of decision, wrongly found they failed to offer any evidence at
trial that liability should have been limited to RDI. Second, when they objected to the
statement of decision on this ground, they contend the court erred in finding their
objections to the court’s decision untimely. We agree with Ribeiro and the Trust on both
counts.
                                              A
       In its June 3, 2015 statement of decision, the trial court found Ribeiro and the
Trust failed to “put on any evidence” or raise “any argument that the judgment should
have been limited to one Defendant or the other,” and as a result, “waive[d]” any
argument they may have had on this point.
       We find, however, ample evidence in the record showing Ribeiro and the Trust
raised this very issue both before and during trial. In their trial brief, for example, RDI,
Ribeiro, and the Trust contended that Choy’s and Oloriz’s “claim [wa]s essentially one
for unpaid wages” that could only be asserted against their employing entity, RDI, and
not the owner or officer of that entity. Ribeiro afterward testified in support of this
contention. Although he signed both Choy’s and Oloriz’s employment contracts in his
personal capacity and also signed Choy’s contract on behalf of his Trust, he testified that
neither he nor the Trust was thereby agreeing to cover RDI’s obligations under the

                                                  8
contracts. Rather, according to his testimony, he signed the contracts in his individual
capacity because the contracts imposed obligations on him personally, which were
separate from RDI’s obligations, and he signed Choy’s contract on behalf of the Trust in
error. On the latter point, he testified that he should have signed Choy’s agreement on
behalf of RDI, but instead mistakenly signed on behalf of the Trust. RDI, Ribeiro, and
the Trust’s counsel later reiterated these points during closing arguments, contending that
neither Ribeiro nor the Trust should be found liable for RDI’s obligations under the
employment contracts.
       In light of this record, we cannot sustain the court’s finding that Ribeiro and the
Trust waived their argument about joint and several liability by failing to offer argument
or evidence on the issue at trial.
                                                B
       We also cannot sustain the court’s later finding that Ribeiro and the Trust were
untimely in filing, in response to the June 3, 2015 statement of decision, their objections
in which they cited the above evidence and asked the court to reconsider its finding of
waiver.
       A party may file objections to a “proposed statement of decision” within 15 days
of service of the decision. (Rule 3.1590(g).) The issue here is which of the court’s
decisions qualified as the “proposed statement of decision”—the April 17, 2015
statement of intended decision, as the court believed, or the June 3, 2015 statement of
decision, as Ribeiro and the Trust contend? In answering this question, we consider first
the various forms that a court’s tentative decision can take. As Ribeiro and the Trust
note, a court may, in its tentative decision following trial, (1) “[s]tate that it is the court’s
proposed statement of decision, subject to a party’s objection”; (2) “[i]ndicate that the
court will prepare a statement of decision”; (3) “[o]rder a party to prepare a statement of
decision”; or (4) “[d]irect that the tentative decision will become the statement of
decision unless, within 10 days after announcement or service of the tentative decision, a

                                                    9
party specifies those principal controverted issues as to which the party is requesting a
statement of decision or makes proposals not included in the tentative decision.” (Rule
3.1590(c).)
       Beginning generally along the path allowed under the fourth option, the trial court
issued its April 17, 2015 statement of intended decision and informed the parties that the
intended decision would become the statement of decision unless a party timely filed “a
proposal or objection to its contents.” In response, RDI, Ribeiro, and the Trust timely
filed “a proposal” to the decision’s contents. Specifically, they requested that the court
address in a statement of decision whether RDI alone was responsible for paying Choy’s
and Oloriz’s severance pay—something the court’s April 17 intended decision did not
cover. The court afterward, as requested, addressed this issue in its June 3, 2015
statement of decision, finding all defendants jointly and severally liable. But the court
then deprived RDI, Ribeiro, and the Trust of any opportunity to object to the court’s
decision on this newly addressed matter.
       We find the court erred in doing so. Had the court informed the parties in its April
17, 2015 statement of intended decision that the decision was “the court’s proposed
statement of decision, subject to a party’s objection,” we would perhaps agree with the
court’s reasoning that the objections had been filed too late. An instruction of that sort is
a permissible one under rule 3.1590(c)(1). The court, however, could not invite the
parties to offer proposals to the content of its April 17 intended decision, apparently
under rule 3.1590(c)(4), and then once the parties proposed those controverted matters to
be addressed, deprive them of any opportunity to object to the newly added content. Rule
3.1590(c)(4) contemplates that after a party timely “specifies those principal controverted
issues as to which the party is requesting a statement of decision or makes proposals,” the
court will issue a statement of decision covering those controverted issues and then allow
the parties to raise objections to the resulting statement of decision. (Rule 3.1590(c)(4),
(f), (g).) But although the court here issued a statement of decision covering those

                                                 10
controverted issues raised by RDI, Ribeiro, and the Trust, it never afforded them this
opportunity to raise objections. That was error. (Rule 3.1590(c)(4), (f), (g); cf. Miramar
Hotel Corp. v. Frank B. Hall & Co. (1985) 163 Cal. App. 3d 1126, 1129 [court wrongly
deprived the appellants of an opportunity to object to the court’s statement of decision
“[b]y labeling the minute order a statement of decision and ignoring appellants’ request
for the issuance of such a statement”].)
                                              II
       We next turn to Ribeiro and the Trust’s contention that the court erred in finding
them, along with RDI, jointly and severally liable for paying the severance amounts owed
Choy and Oloriz.
       The trial court concluded that Ribeiro was jointly and severally liable to pay
Choy’s and Oloriz’s severance pay because he had signed both their contracts in his
individual capacity, and it concluded that the Trust was also jointly and severally liable to
pay Choy’s severance pay because Ribeiro, while purportedly acting on behalf of the
Trust, had signed Choy’s contract. Although the court never clearly explained its legal
rationale in its statement of decision, it appeared to adhere to the alter ego theory of
liability alleged in Choy and Oloriz’s complaint. Choy and Oloriz, abandoning this
theory on appeal, offer two additional legal theories to support the court’s ruling. First,
they contend Ribeiro and the Trust are RDI’s successors and assigns and are, as a result,
liable for RDI’s obligations. Second, they claim that Ribeiro and the Trust, to the extent
they signed the employment contracts, agreed to act as guarantors who would cover
RDI’s obligations in the event of RDI’s default. Ribeiro and the Trust object that neither
the court’s theory nor Choy and Oloriz’s theories are legally tenable on this case’s record.
       We consider each theory of liability in turn.
                                              A
       First, for the reasons Ribeiro and the Trust offer, we cannot sustain the lower
court’s finding that RDI, Ribeiro, and the Trust are all alter egos of one another.

                                                   11
       Courts, in limited circumstances, will put aside a corporation’s separate status and
hold its shareholders or directors personally liable for the corporation’s actions or debts.
(Sonora Diamond Corp. v. Superior Court (2000) 83 Cal. App. 4th 523, 538 (Sonora
Diamond).) To disregard the corporate entity, a court must find “(1) that there be such
unity of interest and ownership that the separate personalities of the corporation and the
individual no longer exist and (2) that, if the acts are treated as those of the corporation
alone, an inequitable result will follow.” (Automotriz etc. De California v. Resnick
(1957) 47 Cal. 2d 792, 796.) In determining whether “the separate personalities of the
corporation and the individual no longer exist,” courts consider a variety of factors,
including, for example, the commingling of funds, inadequate capitalization, disregard of
corporate formalities, one entity’s representation that it is liable for a related entity’s
debts, and a shareholder’s use of corporate assets as if his or her own. (Sonora Diamond,
at pp. 538-539.) Courts have cautioned that application of the alter ego doctrine “is an
extreme remedy, sparingly used.” (Id. at p. 539.) It is not satisfied merely because a
creditor will remain unsatisfied if the corporate veil is not pierced. (Associated Vendors,
Inc. v. Oakland Meat Co. (1962) 210 Cal. App. 2d 825, 842.) Rather, there must be, in
addition to the requisite unity of interest, “some conduct amounting to bad faith mak[ing]
it inequitable . . . for the equitable owner of a corporation to hide behind its corporate
veil.” (Ibid.)
       Appearing to rely on this doctrine, the trial court found Ribeiro and the Trust
liable for RDI’s obligations because (1) Ribeiro and the Trust signed one of both of the
employment agreements, (2) RDI, Ribeiro, and the Trust all answered, demurred, and
later sought summary judgment jointly, and (3) Ribeiro persuaded Choy and Oloriz to
join RDI and promised each severance pay as an incentive to relocate from their prior
positions.
       The record, however, rejects several of the court’s factual findings. The court
found, for example, that RDI, Ribeiro, and the Trust all answered, demurred, and later

                                                  12
sought summary judgment jointly. But only Ribeiro and the Trust, and not RDI,
demurred to Choy and Oloriz’s complaint. And RDI, Ribeiro, and the Trust never sought
summary judgment at all; only Choy and Oloriz did so. The court’s finding that Ribeiro
persuaded Oloriz to join RDI also strayed from the facts. According to Oloriz, Ribeiro’s
father, not Ribeiro, convinced him to join RDI.
       But even accepting the court’s factual findings as true, these findings still could
not sustain the legal conclusion that RDI, Ribeiro, and the Trust are each other’s alter
egos. To begin, two of the court’s three findings on this topic have limited, if any,
relevance. First, we find it largely irrelevant that RDI, Ribeiro, and the Trust jointly filed
papers contesting Choy and Oloriz’s allegations. For reasons of economy, related entities
often defend suits collectively, and we do not find it remarkable that RDI, Ribeiro, and
the Trust did so here. For similar reasons, we would not consider Choy and Oloriz one
and the same simply because they acted collectively in this action. Second, assuming
Ribeiro persuaded Choy and Oloriz to join RDI, we also find that fact to be of marginal
relevance. Ribeiro, as the president of a small company, would be expected to play some
role in the recruitment of upper management like Choy and Oloriz. We find nothing
particularly significant in his doing so.
       In the end, we are left principally with the fact that Ribeiro and the Trust signed
one of both of the employment agreements. But that fact alone could not sustain the
finding that RDI, Ribeiro, and the Trust were all effectively one under the alter ego
doctrine—which again, offers “an extreme remedy, sparingly used.” (See Sonora
Diamond, supra, 83 Cal.App.4th at p. 539.) And we do not find other evidence in the
record sufficient to support this finding. Nor do we find any evidence that would support
a finding that Ribeiro or the Trust acted in bad faith with respect to Choy and Oloriz—a
necessary requirement to invoking the alter ego doctrine. (Hollywood Cleaning &
Pressing Co. v. Hollywood Laundry Service, Inc. (1932) 217 Cal. 124, 129 [“Bad faith in
one form or another must be shown before the court may disregard the fiction of separate

                                                  13
corporate existence.”]; Sonora Diamond, at p. 539 [without evidence of wrongdoing, the
“alter ego doctrine cannot be invoked”].) Choy and Oloriz, in fact, never appear to have
even alleged bad faith.
       In sum, even after making all reasonable inferences in favor of Choy and Oloriz,
we simply cannot find evidence sufficient to support the invocation of the alter ego
doctrine.
                                              B
       We also find no merit to Choy and Oloriz’s alternative argument that the court’s
judgment should be affirmed on the theory that Ribeiro and the Trust are RDI’s
successors and assigns.
       As Choy and Oloriz note, RDI’s obligations under the employment contracts also
applied to RDI’s “successors and assigns.” Because the Trust owns RDI and Ribeiro is
the Trust’s beneficiary and trustee, Choy and Oloriz contend Ribeiro and the Trust are
RDI’s successors and assigns and are thus responsible for RDI’s obligations.
       Choy and Oloriz, however, confuse a company’s shareholders with its successors
and assigns. A company’s successor or assignee is a separate entity that acquires some or
all the company’s assets and liabilities. (See Black’s Law Dict. (10th ed. 2014) p. 142,
col. 2 [an assignee is “[o]ne to whom property rights or powers are transferred by
another”]; id., p. 1660, col. 2 [a successor corporation is an entity “vested with the rights
and duties of an earlier corporation”].) A shareholder, in contrast, may wholly own a
corporation, but it does not for that reason own or have legal title to the company’s assets
and liabilities. (See Dole Food Co. v. Patrickson (2003) 538 U.S. 468, 475 [155 L. Ed. 2d
643] [“A corporate parent which owns the shares of a subsidiary does not, for that reason
alone, own or have legal title to the assets of the subsidiary”].)
       Although Choy and Oloriz attempt to characterize Ribeiro and the Trust as RDI’s
successors and assigns, they never allege that Ribeiro and the Trust have somehow
acquired RDI’s obligation to provide for their severance pay. They instead suggest that

                                                  14
RDI maintains this obligation to pay these amounts—in which case there has been no
successor or assignee of these liabilities—yet also contend that Ribeiro and the Trust,
simply because of their ownership interest in RDI, are simultaneously responsible for
these same liabilities. That position, however, ignores the “basic tenet of American
corporate law . . . that the corporation and its shareholders are distinct entities,” and
cannot be accepted. (Dole Food Co. v. Patrickson, supra, 538 U.S. at p. 474; see also
United States v. Armour & Co. (1971) 402 U.S. 673, 680 [29 L. Ed. 2d 256]
[distinguishing between a corporation’s successors and assigns and the corporation’s
stockholders’ successors and assigns]; Bing Crosby Minute Maid Corp. v. Eaton (1956)
46 Cal. 2d 484, 487 [“In this state a shareholder is ordinarily not personally liable for the
debts of the corporation; he undertakes only the risk that his shares may become
worthless.”].)
                                               C
       Finally, we reject Choy and Oloriz’s contention that Ribeiro is liable as a
guarantor who promised to answer for RDI’s debts. But we find the Trust’s potential
liability on this ground more complicated and ultimately conclude that remand is
appropriate to determine the Trust’s liability, if any, for RDI’s obligations.
                                               1
       In support of their guarantor theory of liability, Choy and Oloriz first cite several
decisions from other jurisdictions finding that an officer of a company who twice signed
a promissory note—once in his representative capacity and once in his individual
capacity—was presumed, as a result, to have personally endorsed the note.3 The Ninth

3       Choy and Oloriz also cite a California case they suggest stands for the same, but
their cited case did not concern someone who was presumed to have guaranteed a loan in
his individual capacity; rather, it concerned someone who expressly guaranteed the loan
in his individual capacity. (See Sebastian International, Inc. v. Peck (1987) 195

                                                   15
Circuit in FDIC v. Woodside Construction, Inc. (9th Cir. 1992) 979 F.2d 172, one
example of their cited cases, held as much based on the Uniform Commercial Code (the
UCC), which provides that representatives who sign their names to an instrument,
without showing they signed in a representative capacity, are personally liable. (FDIC, at
p. 175.)
       Although Choy and Oloriz focus on the law in other jurisdictions, California law,
which has codified the UCC, provides the very same rule for signatories of promissory
notes and similar negotiable instruments. (See Cal. U. Com. Code, § 3402, subd. (b)(2).)
But the UCC does not govern employment contracts, and so these authorities are of
limited relevance here. (See, e.g., Wall Street Network, Ltd. v. New York Times Co.
(2008) 164 Cal. App. 4th 1171, 1187 [contracts for services fall outside the scope of the
UCC].)
       California law on contracts generally, however, provides certain presumptions that
are somewhat comparable to those found in the UCC. We note two in particular here.
First, a “promise, made in the singular number, but executed by several persons, is
presumed to be joint and several.” (Civ. Code, § 1660; see also Bagley v. Cohen (1898)
121 Cal. 604, 605-606 [a promise in the first person singular (“ ‘I, E. A. Cohen, do
hereby guarantee . . .’ ”), but executed by several persons, created a joint and several
obligation].) Second, “[w]here all the parties who unite in a promise receive some
benefit from the consideration, whether past or present, their promise is presumed to be
joint and several.” (Civ. Code, § 1659; see also Shelton v. Michael (1916) 31 Cal. App.
328, 330 [the defendants who together agreed to pay a contractor to build a road, which
would be beneficial to each of them, were jointly and severally liable for the contractor’s
fees].) But neither of these presumptions help Choy and Oloriz.

Cal.App.3d 803, 806 [the “terms of the guaranty referred to [the appellant] in his
individual capacity”].)

                                                 16
       Starting with Ribeiro, had Ribeiro and RDI stated that they together promised to
pay Choy’s and Oloriz’s base salary for three years following termination, we would
presume the promise to be joint and several in nature. (See Civ. Code, § 1659.) Or
instead had the employment contracts been between the employees and RDI only, and
had Ribeiro still signed the contracts in both his representative and individual capacity,
we would perhaps presume that Ribeiro was agreeing to be personally liable for RDI’s
obligations. (See id., § 1660.) On those facts, we might say that RDI’s promises under
the contracts were executed by both RDI and Ribeiro, suggesting that Ribeiro was in
effect saying, “I agree.” (See 1 Witkin, Summary of Cal. Law (11th ed. 2017) Contracts,
§ 109, p. 153.) But the facts here are quite different. RDI and Ribeiro offered separate
promises for different performances under the employment contracts. RDI, labeled
“Employer” under the contracts, promised to pay Choy’s and Oloriz’s base salary and
bonuses, and in the event of their early termination, would also pay their “current base
salary for three (3) years” following termination. Ribeiro, separately, promised to pay
Choy and Oloriz a share of the distributions he received from certain LLCs. Under
established precedent, these separate promises created several, not joint, obligations with
respect to Ribeiro and RDI. (See Freeman v. Jergins (1954) 125 Cal. App. 2d 536, 562
[“ ‘Where two or more parties to a contract promise separate performance, to be rendered
respectively by each of them, . . . each is severally bound for the performance which he
promises and is not bound jointly with any of the others.’ ”]; see also Spangenberg v.
Spangenberg (1912) 19 Cal. App. 439, 450 [“where several persons obligate themselves
to pay several sums of money, their obligation is several and not joint, notwithstanding
that the sum agreed to be paid by each goes to make up an aggregate sum”]; Moss v.
Wilson (1870) 40 Cal. 159, 162-163 [same]; 9 Corbin on Contracts (rev. ed. 1995) § 52.5,
p. 294.)
       We also find neither of these statutory presumptions applicable against the Trust
under Choy’s contract—the one contract the Trust signed. First, we cannot say, under

                                                17
Civil Code section 1659, that the Trust “unite[d]” in a joint promise with RDI to cover
Choy’s severance pay. The contract referred not to RDI’s and the Trust’s united
obligation to cover Choy’s severance pay, but rather referred only to the obligation of
“Employer,” defined as RDI, to cover this pay. We also cannot find, under Civil Code
section 1660, that Choy’s contract included a “promise, made in the singular number, but
executed by several persons.” Choy’s contract, as already discussed, did not involve a
promise “made in the singular number”; rather, it involved multiple parties (namely,
Ribeiro and RDI) offering separate promises. The Trust’s role, whatever it may be, thus
cannot be resolved by either of these statutory presumptions.
                                             2
       Choy and Oloriz next maintain that Ribeiro and the Trust must nonetheless be
found liable as guarantors because, per Civil Code section 1654, ambiguities in a contract
should be interpreted “most strongly” against the party who drafted the contract, unless
the ambiguity can be resolved by another rule of interpretation.
       Beginning with Ribeiro, we find no ambiguity in terms of whether he was
responsible for Choy’s and Oloriz’s severance pay. Again, RDI and Ribeiro offered
separate promises for different performances under the employment contracts, and only
RDI promised to cover severance pay. These separate promises—under well-established
rules of contract interpretation—created several, not joint, obligations with respect to
Ribeiro and RDI. (See, e.g., Freeman v. Jergins, supra, 125 Cal.App.2d at p. 562.) In
other words, under these separate promises, RDI would be responsible for its promises
and Ribeiro would be responsible for his; but neither would be responsible for the
other’s. Finding no ambiguity here, we thus need not result to the rule for interpreting
ambiguities to determine Ribeiro’s obligations. (See Burr v. Western States Life Ins. Co.
(1931) 211 Cal. 568, 576 [“No term of a contract is either uncertain or ambiguous if its
meaning can be ascertained by fair inference from other terms thereof”].)

                                                 18
       But we agree that the Trust’s obligations under Choy’s contract were less clear.
The contract never explained the role, if any, that the Trust was intended to play. Perhaps
the Trust was mistakenly listed, as Ribeiro and the Trust contend. Or perhaps the Trust
was intended to act as a guarantor, as Choy and Oloriz counter. None of this, however, is
clear from the face of the contract. We thus agree Choy’s contract includes a patent
ambiguity in terms of the Trust’s obligations. But we do not find that this ambiguity
mandates a decision in Choy’s favor. It might have done so were no other evidence
offered to resolve the ambiguity. But RDI, Ribeiro, and the Trust did offer extrinsic
evidence to resolve the ambiguity, and as discussed in part I of the Discussion, the trial
court erroneously refused to consider this evidence.
       The court, in its June 3, 2015 statement of decision, found RDI, Ribeiro, and the
Trust failed to offer at trial “any evidence” or “any argument that the judgment should
have been limited to one Defendant or the other,” and so waived the issue as a result.
The court also offered similar sentiments in two later rulings. After RDI, Ribeiro, and the
Trust notified the court that they in fact did raise the issue, the court found their
objections to the statement of decision untimely and, in any event, again concluded they
had nonetheless waived the issue by failing to offer evidence or argument on the issue at
trial. Echoing these findings in a later ruling, the court found Ribeiro and the Trust had
only “briefly and incompletely raised” their argument that liability should be limited to
RDI and had “not presented” this argument at all at trial.
       As discussed in part I of the Discussion above, however, the court erred in finding
Ribeiro and the Trust had waived the issue. RDI, Ribeiro, and the Trust’s counsel did
object to the court’s statement of decision in a timely fashion, and did offer at trial
argument and evidence that RDI alone should have been liable for the severance
payments. Ribeiro, for example, testified that he mistakenly signed Choy’s agreement on
behalf of the Trust, and instead should have signed on behalf of RDI. RDI, Ribeiro, and
the Trust also offered the language of the contract itself. Choy’s contract identified the

                                                  19
parties to the contract as Choy, Ribeiro, and RDI, but then included signature lines for
only two of these three parties—Choy and Ribeiro. It offered no signature line for RDI,
even though this was an employment contract and RDI was the employer. And it instead
included a signature line for the Trust, even though the body of the contract made no
mention of the Trust or its relationship to the parties. Given these facts, RDI, Ribeiro,
and the Trust’s counsel maintained at trial that the Trust’s signing of Choy’s agreement
was “in error.”
       Because the court improperly refused to consider this evidence in its decision, we
cannot sustain the court’s decision on the theory that all ambiguities are to be resolved
against the drafter. The rule on construing ambiguities in Civil Code section 1654 “is to
be used only when there is no extrinsic evidence available to aid in the interpretation of
the contract or where the uncertainty cannot be remedied by other rules of interpretation.”
(Steller v. Sears, Roebuck & Co. (2010) 189 Cal. App. 4th 175, 183, italics added.) And
when, as here, a court improperly refuses to consider extrinsic evidence offered by one
party to explain an ambiguity, and then construes the ambiguity in favor of the other
party, the judgment cannot stand. (See Pacific Gas & E. Co. v. G. W. Thomas Drayage
etc. Co. (1968) 69 Cal. 2d 33, 40-41 [reversing judgment because the trial “court
erroneously refused to consider extrinsic evidence offered to” interpret an ambiguity in a
contract]; Steller, at pp. 183-184.)
       Choy and Oloriz, in response, maintain that ambiguities in the contract must be
construed against the Trust—in which case, extrinsic evidence to resolve the ambiguities
would be admissible—yet also contend that extrinsic evidence is inadmissible because
the contract contains no ambiguities. Quoting Otis Elevator Co. v. Berry (1938) 28
Cal. App. 2d 430, Choy and Oloriz assert “that where a person signs his own name to a
written contract, without . . . disclosing that he acts solely as agent, extrinsic evidence is
inadmissible to prove that he acted solely as agent and was not a party to the contract.”
(Id. at p. 432.) But the court’s reasoning in Otis Elevator Co. was premised on its finding

                                                  20
the contract there unambiguous. (Id. at pp. 432-433.) The appellant in Otis Elevator Co.
signed a contract that made no mention of his alleged principal apart from an address, and
in the court’s view, the contract unambiguously bound the appellant personally as a
result. (Id. at p. 433.)
       But Choy’s contract is quite different. The contract included three parties—Choy,
Ribeiro, and RDI—and included three signature lines. But these signature lines, rather
than matching the named parties, instead listed Choy, Ribeiro, and a fourth entity never
mentioned in the body of the contract, the Trust. These facts created an ambiguity about
the Trust’s intended role. And as discussed above, we cannot resolve this ambiguity by
resorting to the statutory presumptions dealing with additional signatories. This
unresolved ambiguity about the Trust’s role thus warranted the consideration of extrinsic
evidence. (See Pacific Gas & E. Co. v. G. W. Thomas Drayage etc. Co., supra, 69 Cal.2d
at p. 37 [“The test of admissibility of extrinsic evidence to explain the meaning of a
written instrument is not whether it appears to the court to be plain and unambiguous on
its face, but whether the offered evidence is relevant to prove a meaning to which the
language of the instrument is reasonably susceptible.”]; Hurlbut v. Quigley (1919) 180
Cal. 265, 270 [parol evidence found admissible to show whether several endorsers of a
loan were joint endorsers (who were simultaneously liable) or successive endorsers (who
were successively liable in the order in which their names appeared)]; Winet v. Price
(1992) 4 Cal. App. 4th 1159, 1165 [parol evidence is admissible to construe an ambiguous
writing]; see also Sterling v. Taylor (2007) 40 Cal. 4th 757, 767 [“Extrinsic evidence can
also support reformation of a memorandum to correct a mistake.”].)
       Although we reverse the trial court’s finding against the Trust, none of this is to
say that the court could not have found against the Trust on the theory that ambiguities
are to be construed against the drafting party. Perhaps it could. But before doing so, it
was first required to consider Ribeiro and the Trust’s offered extrinsic evidence. As the
court in Steller v. Sears, Roebuck & Co., supra, 189 Cal. App. 4th 175 explained, “[o]nly

                                                21
in those instances where the extrinsic evidence is either lacking or is insufficient to
resolve what the parties intended the terms of the contract to mean will the rule that
ambiguities are resolved against the drafter of the contract be applied.” (Id. at pp. 183-
184.) We thus remand on this issue to allow the court to reevaluate whether the Trust
may be held liable after considering the parties’ offered extrinsic evidence that is already
in the record.
                                              III
       Finally, we consider Choy and Oloriz’s claim that Ribeiro and the Trust, by citing
only evidence in their favor, waived their argument that the evidence is insufficient to
support the trial court’s judgment.
       As Choy and Oloriz note, an appellant “who cites and discusses only evidence in
his [or her] favor fails to demonstrate any error and waives the contention that the
evidence is insufficient to support the judgment.” (Rayii v. Gatica (2013) 218
Cal. App. 4th 1402, 1408.) Choy and Oloriz contend Ribeiro and the Trust did just that,
but in support of the claim, they cite only immaterial facts that Ribeiro and the Trust
allegedly neglected to reference.
       First, Choy and Oloriz contend Ribeiro and the Trust failed to mention that the
two employment contracts also applied to RDI’s successors and assigns. But we do not
fault Ribeiro and the Trust for failing to cite irrelevant contract details. (See part II.B of
the Discussion, ante.)
       Second, Choy and Oloriz object that Ribeiro and the Trust failed to cite the law on
interpreting contract ambiguities against the drafting party. We would not, however, say
that a party failed to fairly present the evidence simply because the party declined to
discuss all the relevant law.
       Third, they contend Ribeiro and the Trust misquoted the terms of Oloriz’s
agreements. According to Ribeiro and the Trust, Oloriz’s contract stated that “Employee
and Employer acknowledge that California is an ‘at-will’ employment state.” That

                                                    22
language, however, actually appeared only in Choy’s contract. As Choy and Oloriz note,
Oloriz’s contract used slightly different language, stating instead that “Employer and
Employee acknowledge that Employee may be terminated at any time without cause.”
Although Choy and Oloriz make much of this error, we find this slight slip immaterial.
       Fourth, Choy and Oloriz claim Ribeiro and the Trust misstated the reason for
Oloriz not receiving a share of the distributions that Ribeiro received from his LLCs.
Perhaps so, but it is an irrelevant point. This appeal has nothing to do with those
distributions.
       Fifth, Choy and Oloriz contend that Ribeiro and the Trust wrongly suggested that
their complaint alleged only an alter ego theory of liability. According to Choy and
Oloriz, they alleged more than merely an alter ego theory of liability; they also alleged
that Ribeiro was liable for RDI’s obligations because the “individuality and separateness
of [the two] have ceased to exist” and their “business affairs . . . cannot be reasonably
segregated.” But those allegations were not part of a separate theory of liability; they
were instead the alleged factual premise to invoke the alter ego doctrine. Choy and
Oloriz claimed Ribeiro and RDI were one and the same, and then based on that factual
allegation, they alleged the legal conclusion that RDI was merely the alter ego of Ribeiro.
       Finally, Choy and Oloriz raise several objections to Ribeiro and the Trust’s
characterization of their causes of action at the trial level. In their opening brief, Ribeiro
and the Trust noted, for example, that Choy and Oloriz never mentioned their cause of
action for conversation in their trial brief and appeared to have abandoned the claim as a
result. But, as Choy and Oloriz counter, they in fact did reference this cause of action in
their trial brief and the trial court specifically discussed the claim in its decision. Even
so, we do not see how this fact is material to this appeal.
       Choy and Oloriz, in sum, may have caught several minor errors in Ribeiro and the
Trust’s recitation of the facts, but insignificant errors of this sort cannot serve as a basis
for rejecting an appellant’s claims.

                                                  23
                                      DISPOSITION
       The judgment is reversed to the extent it found Ribeiro and the Trust jointly and
severally liable for Choy’s and Oloriz’s severance pay. We remand to the trial court with
directions to (1) enter judgment in favor of Ribeiro on this issue, and (2) reevaluate
whether the Trust may be held liable after considering the parties’ offered extrinsic
evidence.
       Ribeiro and the Trust are entitled to recover their costs on appeal. (Cal. Rules of
Court, rule 8.278(a).)

                                                      /s/
                                                  BLEASE, Acting P. J.

We concur:

    /s/
DUARTE, J.

    /s/
RENNER, J.

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