Court Opinion

ID: 8903322
Source: CourtListenerOpinion
Date Created: 2022-11-27 01:27:06.559266+00
Date Added: 2024-06-11T17:08:00.425410
License: Public Domain

ELY, Circuit Judge
(dissenting):
I respectfully dissent. While I thoroughly agree with the majority’s discussion in respect to the law which is to be applied in determining whether or not an alter ego relationship has been established, I have concluded that the majority overemphasizes a remark, obviously impromptu, made by the district judge in the course of the proceedings in his court. The judge did indeed make the statement that because Standard Beauty had failed to pay its California franchise tax, “Mr. Linden was deprived of limited liability.” My Brothers are correct, without doubt, in concluding that the specified statement of the trial judge was over-broad and incorrect. Viewing the record as a whole, however, it is quite clear that the district judge did not literally apply the specified statement. Had he in fact believed that Linden had forfeited all his rights of limited liability by reason of the corporation’s failure to pay California’s *779franchise tax, then there would have been no need for the trial judge to receive evidence, as he did, concerning the whole nature of the corporation’s relationship with Linden and to explore, in depth, the opposing equitable considerations. I therefore believe that, despite the erroneous impromptu statement made by the district judge, the record, considered as a whole, belies the fact that the statement was given the application attributed to it by my Brothers. My overview of the record convinces me that the district judge received and considered all pertinent evidence that was tendered in respect to the alter ego question. This being true, and since, as my Brothers admit, there was substantial evidence, apart from Standard Beauty’s failure to pay the franchise tax, to support the critical determination of the district judge, I would affirm.