Court Opinion

ID: 9839915
Source: CourtListenerOpinion
Date Created: 2023-09-14 17:05:23.990011+00
Date Added: 2024-06-11T09:42:06.060940
License: Public Domain

Filed 9/14/23 Straiton v. Binder CA2/7
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION SEVEN

 DAVID STRAITON,                                              B319912

           Plaintiff and Appellant,                           (Los Angeles County
                                                              Super. Ct. No. BC720375)
           v.

 MITCHELL BINDER, et al.,

      Defendants and
 Respondents.

      APPEAL from a judgment of the Los Angeles County
Superior Court, Daniel S. Murphy, Judge. Affirmed in part and
reversed in part.
      Keiter Appellate Law and Mitchell Keiter for Plaintiff and
Appellant.
      Beitchman & Zekian, P.C., David P. Beitchman, and Andre
Boniadi for Defendants and Respondents.
                       INTRODUCTION

       In 2002, when e-commerce was still in its infancy, David
Straiton entered into an oral contract with Mitchell Binder, a
jewelry designer. The alleged agreement called for Straiton to
provide financial and technical assistance to help Binder start an
internet jewelry business and for Binder to give Straiton a
percentage of the revenues generated each year. Straiton
claimed that he did his part by providing seed money and
technical assistance to launch the website, but that Binder did
not do his—he never shared with Straiton any of the profits he
earned selling jewelry.
       Sixteen years later Straiton filed this action for, among
other things, breach of the oral agreement. In the intervening
years, however, Binder had stopped selling jewelry individually
and formed King Baby Studio, Inc. (KBSI), a corporation that
sold jewelry on the internet and that, according to Binder, was
not a party to the alleged oral contract between Straiton and
Binder.
       After the court sustained a demurrer by Binder and KBSI
to one of Straiton’s causes of action, the defendants moved for
summary adjudication on the remaining causes of action and for
summary judgment. The trial court granted the motion for
summary judgment and entered judgment in favor of Binder and
KBSI. We affirm the judgment in favor of KBSI, affirm the order
granting the motion for summary adjudication on one of
Straiton’s causes of action, reverse the order granting the motion
for summary adjudication on the others, and reverse the
judgment in favor of Binder.

                                2
      FACTUAL AND PROCEDURAL BACKGROUND

      A.     Straiton and Binder Enter into an Oral Contract;
             Straiton Performs, but Binder Does Not
       In 2002 Binder was looking for financing to set up an online
jewelry business. Binder and Straiton entered into an oral
contract (which Binder assumed for purposes of his motion for
summary judgment) with the following principal terms: Straiton
would invest $25,000 to $30,000 in the internet jewelry business,
provide technical support to create the website, and receive
“12% of the revenues from all sources” each year that “revenues
were generated”; Binder would report to Straiton annually “the
amount of gross revenues.” Although starting up the new
business “was extremely risky in nature,” the parties anticipated
the business “could generate substantial profits and spin-off
related enterprises.” Straiton provided the services he agreed to
provide, and Binder launched “King Baby,” an internet company
that, in subsequent years, also operated retail stores in several
cities. Binder, however, did not pay Straiton any money or
provide any accountings. Instead, Binder, doing business as King
Baby, “transferred” the jewelry business to KBSI, a corporation
wholly owned by Binder.

       B.    Straiton (Eventually) Files This Action
       Straiton filed this action on August 31, 2018, alleging five
causes of action against Binder, “an individual, d/b/a King Baby”
(Binder), KBSI, and “Does 1 through 100”: (1) breach of oral
contract, (2) fraud, (3) common count for money had and received,
(4) accounting, and (5) voidable transfer. In his breach of
contract cause of action, Straiton alleged that he performed “in

                                 3
accordance with the terms and conditions” of the oral contract,
that Binder and KBSI breached the contract “by failing to report
and to account to” him, and that he suffered damages. In his
fraud cause of action Straiton alleged Binder made the promises
in the oral contract “with the intent to induce [Straiton] to invest
monies and provide services to the startup business but not to
ever pay or report to [him].” In his common count Straiton
alleged Binder and KBSI became indebted to Straiton for money
had and received by Binder and KBSI, that Straiton demanded
payment, and that neither defendant paid him anything. In his
cause of action for an accounting Straiton alleged Binder and
KBSI have “undertaken numerous sales transactions,” “received
money, a portion of which is due to [Straiton],” but “have failed
and refused” “to render the accounting and pay [Straiton].” In
his cause of action for voidable transfer Straiton alleged King
Baby transferred “its Jewelry business” to KBSI “wholly and
surreptitiously,” with the intent to deprive Straiton “of property
or legal rights.” Regarding all causes of action, Straiton alleged
that Binder created KBSI “as an attempt to enable . . . Binder to
escape liability” and that there “existed a unity of interest and
ownership” between Binder and KBSI such that KBSI was the
“alter ego” of Binder. The trial court subsequently ruled on
demurrer the statute of limitations barred Straiton’s cause of
action for fraud, a ruling Straiton does not challenge.

      C.     The Trial Court Grants a Motion by Binder and KBSI
             for Summary Judgment
      Binder and KBSI moved for summary judgment or, in the
alternative, for summary adjudication on each of Straiton’s four
remaining causes of action (breach of oral contract, money had

                                 4
and received, accounting, and voidable transfer). Binder stated
in his supporting declaration that neither he “personally” nor any
“fictitious business” of his had “marketed, offered for sale, or sold
any jewelry” since August 31, 2014 and that therefore neither he
nor any fictitious business of his ever “earned, received, made, or
otherwise generated any such revenues, income, or profit during
this period of time.” Binder also stated that KBSI “has never
been a party to any contract with Straiton and that “in fact was
not in existence” in 2002. Finally, Binder stated he never
commingled any assets with KBSI or transferred assets to KBSI
“without adequate consideration.”
        Binder argued that, for all of Straiton’s remaining causes of
action, there were no triable issues of fact on the element of
damages because the two-year statute of limitations barred
claims for damages before 2016. Citing his declaration, Binder
asserted that, because he (“in his individual capacity and/or as a
fictitious business (d/b/a)”) did not sell any jewelry after
August 31, 2014, he (ditto) did not earn any revenues, income, or
profit during “the applicable limitations period.” Thus, Binder
argued, Straiton could not establish “any ascertainable damages
during the applicable limitations period, an essential element to
his claims.”
        KBSI argued that it “has never been a party to any contract
with Straiton” and that the court in Postal Instant Press, Inc. v.
Kaswa Corp. (2008) 162 Cal.App.4th 1510, 1513 (Postal Instant
Press) rejected the alter ego doctrine known as “reverse piercing,”
which allows a creditor to reach corporate assets to satisfy claims
against an individual shareholder. KBSI also argued that, even
if the court decided to apply the doctrine of reverse piercing,
Straiton did not “satisfy its basic elements” because he did not

                                 5
present any evidence of undercapitalization, commingling of
assets, or transfer of assets without adequate consideration.
      Straiton opposed the motion, arguing that there was “no
question that damages exist” because the “King Baby jewelry
business” sold “millions of dollars of jewelry annually,” that
Straiton was “entitled to his share,” and that “the assignment
and transfer” of the jewelry business to KBSI did not “eliminate
the contractual obligation to pay Straiton 12% of the revenue
from the business.” Citing cases distinguishing Postal Instant
Press, supra, 162 Cal.App.4th 1510, Straiton argued Binder did
not submit facts disproving he was the alter ego of KBSI.
Straiton asserted that, because Binder and KBSI did not
“factually overcome” the allegation there was a unity of interest
between the two entities, KBSI should be held liable for the acts
of Binder. Finally, Straiton argued that the statute of limitations
did not bar his fifth cause of action for voidable transfer and that
Binder and KBSI did not provide evidence Binder transferred the
King Baby trademark to KBSI for adequate consideration. In
addition to his declaration, Straiton submitted the declaration of
Tanya Pontep, a certified public accountant, who stated that she
reviewed an “incomplete general ledger” of KBSI and that,
without examining “source documents,” her ability “to uncover
misuse[ ] of corporate assets or comingling [was] severely
limited.” With these disclaimers, Pontep said she found “multiple
large sums of payments” that appeared “to be personal in
nature.”
      The trial court granted the motion for summary judgment.
The court observed that the parties had agreed Straiton “would
only be entitled to damages incurred starting [in] January 2016”
(because of the two-year statute of limitations) and that Binder

                                 6
asserted he had not sold jewelry in his individual capacity or
through a fictitious business since 2014.1 On whether Straiton
could sue Binder as an alter ego of KBSI, the court found Straiton
failed to raise a triable issue of material fact regarding whether
KBSI was Binder’s alter ego. The court ruled that “the mere fact
that Binder wholly owns KBSI [was] insufficient” and that
Straiton did not present “evidence of commingling of funds.” The
court ruled Pontep’s declaration did not create a factual issue
because it was based on “incomplete” records.
       Following Postal Instant Press, supra, 162 Cal.App.4th
1510, the court concluded that Straiton could not maintain his
claims against KBSI under the theory of “outside reverse
piercing” and that, in any event, Straiton had not created a
triable issue of material fact regarding whether Binder and KBSI
were “alter egos of one another.” The court also ruled the
applicable statute of limitations under the Uniform Voidable
Transactions Act (Civ. Code, § 3439.04 et seq.) barred Straiton’s
cause of action for voidable transfer because Binder transferred
the King Baby trademark to KBSI in 2008. (See Civ. Code,
§ 3439.09, subds. (a)(1), (c).) The court entered judgment in favor
of Binder and KBSI, and Straiton timely appealed.

1      The statute of limitations for a breach of oral contract is
two years. (See Code Civ. Proc., § 339; Calvary SPV I, LLC v.
Watkins (2019) 36 Cal.App.5th 1070, 1081; Lucioni v. Bank of
America, N.A. (2016) 3 Cal.App.5th 150, 164.) Thus, Straiton
may only seek damages after August 31, 2016, two years before
he filed this action. It appears the court ruled the parties agreed
Straiton could seek damages beginning in January 2016, rather
than August 2016, based on Straiton’s response to an
interrogatory.

                                 7
                          DISCUSSION

      A.    The Trial Court Erred in Granting Binder’s Motion
            for Summary Adjudication on Straiton’s Causes of
            Action for Breach of Contract, Money Had and
            Received, and an Accounting

               1.     Applicable Law and Standard of Review
       “‘A court may grant a motion for summary judgment or
summary adjudication “only when ‘all the papers submitted show
that there is no triable issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.’”’
[Citations.] ‘A defendant moving for summary adjudication of a
cause of action must show that one or more elements cannot be
established or that there is a complete defense.’ [Citations.] We
review an order granting a motion for summary adjudication
de novo [citation] and ‘decide independently whether the facts not
subject to triable dispute warrant judgment for the moving party
as a matter of law.’” (Childhelp, Inc. v. City of Los Angeles (2023)
91 Cal.App.5th 224, 241.).
       “A moving defendant’s initial burden is to present evidence
that either conclusively negates an element of each of the
plaintiffs’ causes of action or shows that plaintiffs do not possess,
and cannot reasonably obtain, evidence necessary to establish at
least one element of each cause of action. [Citation.] ‘Once the
defendant satisfies its initial burden, “the burden shifts to the
plaintiff . . . to show that a triable issue of one or more material
facts exists as to the cause of action or a defense thereto.”’”
(Taylor v. Financial Casualty & Surety, Inc. (2021)
67 Cal.App.5th 966, 979; see Code Civ. Proc., § 437c, subd. (p)(2);

                                 8
Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849-850.)
“There is a triable issue of material fact if, and only if, the
evidence would allow a reasonable trier of fact to find the
underlying fact in favor of the party opposing the motion in
accordance with the applicable standard of proof.” (Aguilar, at
p. 850; accord, Esplanade Prods., Inc. v. The Walt Disney Co.
(2023) 93 Cal.App.5th 793, 804-805; Harris v. Thomas Dee
Engineering Co., Inc. (2021) 68 Cal.App.5th 594, 600.) “‘“We
liberally construe the evidence in support of the party opposing
summary judgment and resolve doubts concerning the evidence
in favor of that party.”’” (Gonzales v. Mathis (2021) 12 Cal.5th
29, 39; see Hampton v. County of San Diego (2015) 62 Cal.4th
340, 347.).

            2.     Binder Did Not Meet His Moving Burden To
                   Negate the Damages Element of Straiton’s
                   Causes of Action for Breach of Oral Contract,
                   Money Had and Received, and an Accounting
      Binder sought summary adjudication on Straiton’s
remaining causes of action by arguing Straiton could not show he
suffered damages within the applicable limitations period. (See
Kaney v. Custance (2022) 74 Cal.App.5th 201, 213 [“‘“we
determine whether the moving party has established facts which
negate the opponents’ claim and justify a judgment in the
movant’s favor”’”].) To meet his moving burden, Binder had to
negate, or show Straiton could not obtain evidence on, the
damages element of each cause of action. This was true for
breach of contract (Oasis West Realty, LLC v. Goldman (2011)
51 Cal.4th 811, 821; CSAA Ins. Exch. v. Hodroj (2022)
72 Cal.App.5th 272, 276), money had and received (Title Ins. Co.

                                 9
v. State Bd. of Equalization (1992) 4 Cal.4th 715, 731; Rutherford
Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 230;
Avidor v. Sutter’s Place, Inc. (2013) 212 Cal.App.4th 1439, 1454),
and an accounting2 (Sass v. Cohen (2020) 10 Cal.5th 861, 869; see
Fleet v. Bank of America N.A. (2014) 229 Cal.App.4th 1403, 1413;
Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872,
910).
       Binder did not meet his burden. Straiton alleged that, in
exchange for his “investment and efforts” to help Binder start the
internet jewelry business, Binder agreed to pay Straiton
12 percent of the revenues from “all sources” and that Binder
failed to pay him “each and every year.” Relying on Straiton’s
admission he was seeking damages only after January 2016,
Binder argued he did not personally or through any fictitious
business sell any jewelry, and thus did not earn or receive any
revenue, after August 2014. Therefore, Binder argued, Straiton
“utterly fails to establish any ascertainable damages.”
       But Binder’s carefully crafted statement in his declaration
that neither he nor his fictitious business earned or received any
revenues after August 2014 did not cover all of the sources from
which he may have earned or received revenue generated by the
sale of the jewelry. Binder identified two sources from which he

2     To the extent an accounting is an independent cause of
action and not just a type of remedy that depends on the validity
of underlying claims. (See Batt v. City and County of San
Francisco (2007) 155 Cal.App.4th 65, 82, disapproved on another
ground in McWilliams v. City of Long Beach (2013) 56 Cal.4th
613, 626; Duggal v. G.E. Capital Communications Services, Inc.
(2000) 81 Cal.App.4th 81, 95; see also Janis v. California State
Lottery Com. (1998) 68 Cal.App.4th 824, 833 [“an accounting is
derivative; it must be based on other claims”].)

                                10
could have received (but stated he did not receive) revenue:
himself individually and doing business as a fictitious business.
Significantly, Binder did not state he did not receive any revenue
from or through KBSI, the corporation he wholly owned, during
the limitations period, nor did Binder state he did not receive
revenue from any other (in Straiton’s words) “spin-off related
enterprises.” (See Mosley v. Pacific Specialty Ins. Co. (2020)
49 Cal.App.5th 417, 423 [“‘[W]e construe the moving party’s
affidavits strictly’” and “‘construe the opponent’s affidavits
liberally.’”].) KBSI was one of the “sources” from which Straiton
alleged he was entitled to receive 12% of revenues through
Binder, and Binder did not state he received no earnings from
that source during the prior two years. That Binder (or a
fictitious business of his) did not sell any jewelry after
August 2014 did not mean Binder did not receive any revenue
from the internet jewelry business, which Straiton alleged
included the dba King Baby and the corporation KBSI, as well as
other entities and sources. Because Binder did not negate the
damages element of Straiton’s causes of action, he did not meet
his initial burden on summary judgment. (See California-
American Water Co. v. Marina Coast Water Dist. (2022)
86 Cal.App.5th 1272, 1293 [defendant was not entitled to
summary adjudication because it “failed to negate the express
allegations pled in the complaint”]; Union Pacific Railroad Co. v.
Ameron Pole Products LLC (2019) 43 Cal.App.5th 974, 982-983
[defendant was not entitled to summary judgment on the
causation element of a negligence cause of action because, even
though someone else caused the accident, the defendant did not
negate the allegation its conduct contributed to the plaintiff’s
injuries]; Moeller v. Fleming (1982) 136 Cal.App.3d 241, 244, 245

                                11
[defendant “was not entitled to summary judgment” because his
“affidavits neither negated a necessary element of [the plaintiff’s]
theory nor stated a complete defense to it”].)
       Binder contends Straiton forfeited the argument “the scope
of the agreement is ambiguous” enough to include KBSI by not
making the argument in the trial court. But Straiton’s position is
not that the terms of the oral contract were ambiguous; his
position is that Binder did not refute the allegations in the
complaint. And Straiton (more or less) made that argument in
his opposition to Binder’s motion for summary judgment by
contending “the moving party has the burden of not only
eliminating triable issues of facts, it must do so on all of
plaintiff’s theories.” In any event, an appellant challenging an
order granting a motion for summary judgment or adjudication
can always argue the moving party failed to meet its initial
burden on summary judgment, even if the appellant did not make
that argument in the trial court. (See Scheer v. Regents of the
University of California (2022) 76 Cal.App.5th 904, 914-915
[plaintiff’s failure to raise an argument in opposition to the
motion for summary judgment did not preclude the reviewing
court from considering the issue in determining whether the
defendants met their moving burden]; Y.K.A. Industries, Inc. v.
Redevelopment Agency of City of San Jose (2009) 174 Cal.App.4th
339, 366-367 [plaintiff “cannot be said to have waived the
argument [that the defendants failed to meet their moving
burden] by not having raised it below” because the “consequence”
of the defendants’ failure to demonstrate “the very applicability”
of a doctrine that would show “their entitlement to judgment” is
that “the motion should have been denied regardless of the
content of [the plaintiff’s] opposition”].)

                                12
      B.    The Trial Court Did Not Err in Granting KBSI’s
            Motion for Summary Adjudication on Straiton’s
            Causes of Action for Breach of Contract, Money Had
            and Received, and an Accounting

              1.    Alter Ego Liability
       “The alter ego doctrine arises when a plaintiff comes into
court claiming that an opposing party is using the corporate form
unjustly and in derogation of the plaintiff’s interests. [Citation.]
In certain circumstances the court will disregard the corporate
entity and will hold the individual shareholders liable for the
actions of the corporation: ‘As the separate personality of the
corporation is a statutory privilege, it must be used for legitimate
business purposes and must not be perverted. When it is abused
it will be disregarded and the corporation looked at as a collection
or association of individuals, so that the corporation will be liable
for acts of the stockholders or the stockholders liable for acts done
in the name of the corporation.’” (Mesler v. Bragg Management
Co. (1985) 39 Cal.3d 290, 300; see Lopez v. Escamilla (2022)
79 Cal.App.5th 646, 650; Curci Investments, LLC v. Baldwin
(2017) 14 Cal.App.5th 214, 221 (Curci); Leek v. Cooper (2011)
194 Cal.App.4th 399, 411 (Leek); see also Sonora Diamond Corp.
v. Superior Court (2000) 83 Cal.App.4th 523, 538 [“A corporate
identity may be disregarded—the ‘corporate veil’ pierced—where
an abuse of the corporate privilege justifies holding the equitable
ownership of a corporation liable for the actions of the
corporation.”].) “There is no litmus test to determine when the
corporate veil will be pierced; rather the result will depend on the
circumstances of each particular case. There are, nevertheless,
two general requirements: ‘(1) that there be such unity of interest

                                 13
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.’” (Mesler, at p. 300; see Curci, at p. 221; Leek, at
p. 411; Sonora Diamond Corp., at p. 538.)
       “‘Among the factors to be considered in applying the
doctrine are commingling of funds and other assets of the two
entities, the holding out by one entity that it is liable for the
debts of the other, identical equitable ownership in the two
entities, use of the same offices and employees, and use of one as
a mere shell or conduit for the affairs of the other.’ [Citations.]
Other factors which have been described in the case law include
inadequate capitalization, disregard of corporate formalities, lack
of segregation of corporate records, and identical directors and
officers. [Citations.] No one characteristic governs, but the
courts must look at all the circumstances to determine whether
the doctrine should be applied.” (Sonora Diamond Corp. v.
Superior Court, supra, 83 Cal.App.4th at p. 538; see Leek, supra,
194 Cal.App.4th at pp. 417-418.)

            2.     The Alter Ego Variant of Outside Reverse
                   Piercing Does Not Apply
      “In appropriate circumstances, traditional veil piercing
permits a party to pierce the corporate or limited liability
company (LLC) veil ‘so that an individual shareholder [or LLC
member] may be held personally liable for claims against the
corporation [or LLC].’ [Citation.] ‘Rather than seeking to hold an
individual responsible for the acts of an entity, reverse veil
piercing seeks to satisfy the debt of an individual through the
assets of an entity of which the individual is an insider.’

                                14
[Citation.] ‘Outside reverse veil piercing arises when the request
for piercing comes from a third party outside the targeted
business entity.’” (Blizzard Energy, Inc. v. Schaefers (2021)
71 Cal.App.5th 832, 840 (Blizzard Energy); see Postal Instant
Press, supra, 162 Cal.App.4th at p. 1518.) However, in cases
involving a corporation, as opposed to a limited liability company,
“a third party creditor may not pierce the corporate veil to reach
corporate assets to satisfy a shareholder’s personal
liability.” (Postal Instant Press, at pp. 1512-1513.)
       Because KBSI is a corporation, the doctrine of reverse
piercing does not allow Straiton to reach KBSI’s assets to satisfy
Binder’s personal liability to Straiton. (See Postal Instant Press,
supra, 162 Cal.App.4th at pp. 1512-1513.) As the court in Postal
Instant Press explained, “[o]utside reverse piercing can harm
innocent shareholders and corporate creditors, and allow
judgment creditors to bypass normal judgment collection
procedures. . . . [¶] To address the many concerns created by
outside reverse piercing, the courts recognizing the doctrine have
created significant qualifications to its application,” including
that legal remedies are inadequate and that “innocent creditors”
will not be harmed. (Id. at p. 1513.)
       The cases Straiton relies on to support his assertion that
“California law authorizes ‘reverse piercing’” are distinguishable.
In Curci, supra, 14 Cal.App.5th 214 the judgment creditor moved
under Code of Civil Procedure section 187 to add a limited
liability company as a judgment debtor; the individual debtor
held virtually all the interest in the limited liability company and
controlled its actions. (Id. at p. 217.) The court in Curci
concluded Postal Instant Press, supra, 162 Cal.App.4th 1510 did
not “preclude application of outside reverse veil piercing” in the

                                15
case because the decision in Postal Instant Press “was expressly
limited to corporations,” the individual debtor held a 99 percent
interest in the limited liability company (so that there was “no
‘innocent’ member” of the limited liability company who could be
adversely affected), and a creditor “does not have the same
options against a member of [a limited liability company] as it
has against the shareholder of a corporation.”3 (Curci, at pp. 222-
223.) The court in Curci also stated that the purpose of the
limited liability company in that case, “to serve as a vehicle for
holding and investing” the individual debtor’s money, and the
individual debtor’s decision to cease making distributions to
himself when the court entered judgment against him, among
other facts, presented a situation “where reverse veil piercing
might well be appropriate.” (Id. at p. 224.) As discussed, KBSI is
a corporation, not a limited liability company, and there is no
evidence that it was a repository of Binder’s money or that
Binder refused to pay himself from the proceeds of KBSI’s jewelry
sales.
       In Blizzard Energy, supra, 71 Cal.App.5th 832 the court,
without much analysis, followed Curci, supra, 14 Cal.App.5th
214, and concluded the case did not present the same concerns
with outside reverse piercing the court in Postal Instant Press,
supra, 162 Cal.App.4th 1510 identified. (Blizzard Energy, at

3      The court in Curci explained: “When the debtor is a
shareholder, the creditor may step straight into the shoes of the
debtor. It may acquire the shares and, thereafter, ‘have whatever
rights the shareholder had in the corporation,’ including the right
to dividends, to vote, and to sell the shares,” but “in stark
contrast,” if the debtor is a member of an LLC, “the creditor may
only obtain a charging order against distributions made to the
member.” (Curci, supra, 14 Cal.App.5th at p. 223.)

                                16
p. 847.) The court in Blizzard Energy concluded the creditor did
not have an adequate legal remedy because the individual debtor
had filed for bankruptcy protection and, to thwart the creditor’s
attempt to collect on the judgment, made clear he would prevent
his limited liability companies from making distributions. (Id. at
p. 848.) There is no such evidence here. Straiton has the legal
remedy of suing for breach of the oral contract, and nothing
indicates that Binder is bankrupt.4

            3.      Even if Reverse Piercing Applied, Straiton Did
                    Not Create a Triable Issue of Material Fact
       Even if the doctrine of outside reverse piercing applied, the
trial court correctly concluded Straiton did not create a triable
issue of material fact regarding whether “Binder and KBSI are

4      The recent case of Reliant Life Shares, LLC v. Cooper
(2023) 90 Cal.App.5th 14, like Curci, supra, 14 Cal.App.5th 214
and Blizzard Energy, supra, 71 Cal.App.5th 832, involved
whether the plaintiff could hold a limited liability company and
other related entities financially responsible for the misdeeds of
two individuals. (Reliant Life Shares, at pp. 37-38.) The court in
Reliant Life Shares cited Curci, which as discussed concluded the
holding of Postal Instant Press, supra, 162 Cal.App.4th 1510
applied only to corporations* and further distinguished Postal
Instant Press on the ground the “equities of the case did not
justify disregarding the corporate form.” (Reliant Life Shares, at
p. 38.) As discussed, KBSI is a corporation, and, as we will
discuss, the equities here do not justify disregarding the
corporate form.
      * Although it appears one of the various entities in Reliant Life
      Shares was a corporation, the court did not distinguish this
      corporate entity from the other limited liability companies in the
      case. (Id. at p. 37.)

                                  17
alter egos of one another.” Straiton alleged that KBSI was the
alter ego of Binder, that Binder “controls and dominates” KBSI,
that “any individuality and separateness” between Binder and
KBSI “has ceased,” and that recognizing the separate existence of
KBSI “would constitute an abuse of the corporate privilege and
would sanction fraud.” As discussed, Binder stated in his
declaration: “There does not and has never existed such a unity
of interest in [his] ownership of [KBSI] such that any
separateness has ceased to exist between the two, particularly
because there has never been any commingling of assets or
transfers of assets without adequate consideration.” Binder also
stated that “there has not been any transfer between [him] and
[KBSI] within the past seven (7) years, whether related to any
contract between Straiton and [himself] or otherwise.” Though
sparse, this evidence was sufficient to shift the burden to Straiton
to create a triable issue of material fact. (Cf. Krantz v. BT Visual
Images (2001) 89 Cal.App.4th 164, 173 [declarations from
attorneys and a company executive “stating that the alter ego
and agency allegations of the amended complaint were untrue”
did not shift the burden of proof to the plaintiff].)
       Straiton did not meet his responsive burden. Straiton did
not dispute in his separate statement that Binder did not
transfer any assets without adequate consideration, and Straiton
did not submit admissible evidence Binder and KBSI commingled
their assets. As discussed, the only evidence Straiton presented
in opposition to the motion for summary judgment was that
Binder wholly owns KBSI, that Binder and KBSI share the same
address, and that Binder is the only officer and director of KBSI.
This evidence was insufficient to create a triable issue of material
fact on whether KBSI was Binder’s alter ego. (See Leek, supra,

                                18
194 Cal.App.4th at p. 415 [“[a]n allegation that a person owns all
of the corporate stock and makes all of the management decisions
is insufficient to cause the court to disregard the corporate
entity”]; cf. Zoran Corp. v. Chen (2010) 185 Cal.App.4th 799, 812-
813 [plaintiff’s evidence the defendant provided startup funding
for the corporation, “ensured a low cash balance,” and was
involved in all “‘movement in the company,’” created a triable
issue of material fact regarding whether the defendant and the
corporation “had such a unity of interest that ‘“the separate
personalities of the corporation and the individual no longer
exist[ed]”’”].)
       Straiton’s accounting expert, Pontep, reviewed a general
ledger of KBSI and said it revealed various payments that did not
seem related to the business. The trial court did not err in ruling
this statement was not sufficient to create a triable issue of
material fact. Pontep admitted the record she reviewed was
incomplete. She went so far as to conclude that reviewing the
general ledger to uncover commingling of assets was “pointless”
because she would need to examine source documents, such as
vendor invoices, credit card statements, bank statements, and
canceled checks, which her declaration suggests she didn’t have.
(See San Francisco Print Media Co. v. The Hearst Corp. (2020)
44 Cal.App.5th 952, 961-962 [an ““‘expert’s opinion may not be
based ‘on assumptions of fact without evidentiary support
[citation], or on speculative or conjectural factors’’””]; Sanchez v.
Kern Emergency Medical Transportation Corp. (2017)
8 Cal.App.5th 146, 155 [“‘Cases dismissing expert declarations in
connection with summary judgment motions do so on the basis
that the declarations established that the opinions were either

                                 19
speculative, lacked foundation, or were stated without sufficient
certainty.’”].)5
      Straiton also failed to create a triable issue of material fact
regarding whether adherence to the separate entities would
produce “an unjust or inequitable result.” (Misik v. D’Arco (2011)
197 Cal.App.4th 1065, 1073; see Mesler v. Bragg Management
Co., supra, 39 Cal.3d at p. 300.) Straiton did not present any
evidence that Binder will escape liability from his obligations
under the contract or that, if Straiton prevails in this action, he
will not be able to collect on a judgment against Binder.
(Cf. JPV I L.P. v. Koetting (2023) 88 Cal.App.5th 172, 200
[evidence the limited liability company’s “bank accounts were
emptied” a “month after the judgment was entered,” which left
the judgment creditor “unable to collect on the sizeable damages
award,” “when combined with the other factors indicating
inequitable uses of the corporate form, may satisfy the unjust
result element for alter ego liability”]; Toho-Towa Co., Ltd. v.
Morgan Creek Productions, Inc. (2013) 217 Cal.App.4th 1096,
1109 [“it would be inequitable to permit [the defendant], the alter
ego of [the judgment debtor], to shift liability to [the judgment
debtor] after ensuring that [the judgment debtor] would have no
funds to pay its debts”]; Claremont Press Publishing Co. v.
Barksdale (1960) 187 Cal.App.2d 813, 817 [“To recognize the
separate entity of the corporation here would permit [the]

5     Straiton does not argue that he did not have a sufficient
opportunity to conduct discovery or that he asked the court to
continue the hearing on the motion for summary judgment under
Code of Civil Procedure section 437c, subdivision (h), to conduct
additional discovery.

                                 20
defendant and [his associate] to secure for their venture the
benefit of plaintiff’s printing services without liability therefor.”].)
      Taylor v. Newton (1953) 117 Cal.App.2d 752, cited by
Straiton, is distinguishable. In that case the trial court found the
defendant, who failed to repay money the plaintiff had loaned
him, divested himself of all property from which a judgment
could be satisfied, and formed a corporation to which the
defendant transferred “various real properties” without
consideration. (Id. at pp. 753-754, 756.) The trial court also
found that the corporation did not have meetings or by-laws and
that the defendant “used the defendant corporation for his own
purposes.” (Id. at p. 756.) The court in Taylor v. Newton
concluded the evidence “abundantly supported” the trial court’s
finding the corporation was the alter ego of the defendant, stating
that “to adhere to the fiction of a separate existence” of the
corporation “would promote an injustice” to the defendant’s
creditors.” (Id. at p. 761.) In contrast, Straiton did not present
evidence that Binder was insolvent, that KBSI failed to observe
corporate formalities, or that, as discussed, Binder transferred
his assets to KBSI without consideration.

             4.    Straiton Forfeited His Successor Liability
                   Argument
       Straiton argues for the first time on appeal that,
“[t]hrough the doctrine of successor liability, [KBSI] is
responsible for Binder’s debt to Straiton.” Straiton asserts that
the record established that KBSI was a “‘mere continuation’” of
King Baby and that “‘the transfer of assets to [KBSI]’” was for the
“‘fraudulent purpose of escaping liability.’” The argument is
forfeited and meritless.

                                  21
       When a corporation purchases the principal assets of
another corporation, the purchaser does not assume the seller’s
liabilities unless: “(1) there is an express or implied agreement of
assumption, (2) the transaction amounts to a consolidation or
merger of the two corporations, (3) the purchasing corporation is
a mere continuation of the seller, or (4) the transfer of assets to
the purchaser is for the fraudulent purpose of escaping liability
for the seller’s debts.” (Ray v. Alad Corp. (1977) 19 Cal.3d 22, 28;
see Beatrice Co. v. State Bd. of Equalization (1993) 6 Cal.4th 767,
778; Cleveland v. Johnson (2012) 209 Cal.App.4th 1315, 1327;
CenterPoint Energy, Inc. v. Superior Court (2007)
157 Cal.App.4th 1101, 1120.) A corporation acquiring the assets
of another corporation “is the latter’s mere continuation and
therefore liable for its debts . . . 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.’” (Beatrice, at p. 778; see
Cleveland, at p. 1327.) Successor liability “is an equitable
doctrine that applies when a purchasing corporation is merely a
continuation of the selling corporation or the asset sale was
fraudulently entered to escape debts and liabilities.
[Citations.] Successor liability requires an underlying cause of
action and merely extends the liability on that cause of action to
a corporation that would not otherwise be liable.” (Brown Bark
III, L.P. v. Haver (2013) 219 Cal.App.4th 809, 822-823.)
       Straiton did not allege KBSI was liable under a successor
liability theory. Nor did he plead any of the elements relevant to
establishing KBSI’s liability as a successor entity. KBSI did not

                                22
address the doctrine of successor liability in its motion for
summary judgment because Straiton did not allege that theory.
(See Jacobs v. Coldwell Banker Residential Brokerage Co. (2017)
14 Cal.App.5th 438, 444 [“‘A moving party seeking summary
judgment or adjudication is not required to go beyond the
allegations of the pleading, with respect to new theories that
could have been pled, but for which no motion to amend or
supplement the pleading was brought, prior to the hearing on the
dispositive motion.’”]; Leek, supra, 194 Cal.App.4th at p. 406
[where the plaintiffs “did not adequately plead an alter ego
theory of recovery in their complaint,” the defendant “was under
no duty to negate an alter ego claim”]; see also Conroy v. Regents
of University of California (2009) 45 Cal.4th 1244, 1250 [the
pleadings “‘set the boundaries of the issues to be resolved at
summary judgment’”]; Orange County Water Dist. v. Sabic
Innovative Plastics US, LLC (2017) 14 Cal.App.5th 343, 367
[same].)
        Nor did Straiton argue in opposition to the motion for
summary judgment that KBSI did not negate his factual
allegations under the successor liability doctrine (because there
were no such allegations). In one sentence, buried in a paragraph
under the subheading, “The Defendants Must Show that Under
No Possible Hypothesis within the Reasonable Purview of the
Allegations of the Complaint is there a Material Question of Fact
Which Requires Examination by Trial,” Straiton stated Binder
and KBSI did not “offer any facts to attempt to demonstrate that
. . . Binder dba King Baby acted different[ly] from or conducted
business in any manner different from the successor enterprise,
King Baby Studio, Inc.” Straiton, however, did not discuss any of
the elements of successor liability or cite any evidence that might

                                23
support liability under such a theory. Neither did Straiton
mention or cite any evidence in his separate statement of
disputed material facts in opposition to the motion for summary
judgment on the issue of successor liability. Instead, Straiton’s
factual and legal arguments focused almost exclusively on
whether he suffered damages during the two-year limitations
period and whether KBSI was Binder’s alter ego. (See Venice
Coalition to Preserve Unique Community Character v. City of Los
Angeles (2019) 31 Cal.App.5th 42, 54 [reviewing court would not
address a new theory of liability raised for the first time on
appeal because the plaintiffs “did not . . . raise this issue in the
trial court, nor did they include the underlying facts to support
this allegation in their separate statement of facts opposing
summary judgment”].) By failing to allege or argue successor
liability in the trial court, Straiton forfeited the issue.
       Straiton suggests he presented the “substance” of a
successor liability theory in the trial court when he “insisted” in
opposition to the motion for summary judgment that “summary
judgment could not derive from the fact that ‘Binder no longer
sells King Baby jewelry in his personal capacity, but instead
through his wholly owned corporation.’” Here, however, is what
Straiton actually argued: “Now, Defendants maintain a wacky
argument that Straiton’s case is over because Binder no longer
sells King Baby jewelry in his personal capacity, but instead
through his wholly owned corporation. Defendants’ argument
ignores the fundamental principles of contract law. A contracting
party is not released of his contractual obligations by assigning or
delegating the contract to another person.” Straiton was arguing
Binder was liable regardless of any steps Binder took to assign or

                                24
delegate the contract to another person; Straiton was not arguing
KBSI was liable under the successor liability theory.
       Straiton admits successor liability and alter ego liability
“are distinct concepts,” but nevertheless argues “they often
overlap.” Although Straiton’s argument on this point is not
entirely clear,6 he appears to be arguing that his allegation KBSI
“‘was incorporated to facilitate the transfer of . . . Mitchell Binder
d/b/a King Baby’s jewelry business to avoid liability’” stated a
claim against KBSI both as an alter ego and a successor
corporation. It did not. Straiton did not allege that, because
Binder created KBSI to escape liability, KBSI should be liable for
Binder’s obligations. Rather, Straiton alleged KBSI was the alter
ego of Binder “in that” Binder controlled and dominated KBSI,
“which was created” to enable Binder to “escape liability.” No
reasonable reading of this alter ego allegation suggests Straiton
intended to allege KBSI assumed the liabilities of Binder under
the successor liability doctrine. (See Brown Bark III, L.P. v.
Haver, supra, 219 Cal.App.4th at p. 823 [“the showing required to
invoke” the equitable doctrines of alter ego and successor liability
“is different”]; see also Leek, supra, 194 Cal.App.4th at p. 415 [“A
complaint must set forth the facts with sufficient precision to put
the defendant on notice about what the plaintiff is complaining
and what remedies are being sought.”].)

6      On page 31 of his opening brief Straiton states: “The law
bars a party from evading a debt by shifting assets to a new
business—or himself.” This sentence, however, appears in a
section about alter ego liability. In his reply brief Straiton argues
he alleged facts under the successor liability doctrine, but he cites
the trial court’s ruling on the demurrer by Binder and KBSI.

                                 25
      C.      Straiton Forfeited Any Challenge to the Trial Court’s
              Ruling on the Cause of Action for Voidable Transfer
       In his opening brief Straiton does not challenge the trial
court’s order granting the motion for summary adjudication on
his cause of action for voidable transfer. As discussed, the trial
court ruled that the statute of limitations (seven years) under the
Uniform Voidable Transactions Act barred Straiton’s cause of
action because the “only evidence of any transfer is a document
showing assignment of trademarks from Binder to KBSI dated
2008.” (See Civ. Code, § 3439.09, subd. (c); PGA West Residential
Assn., Inc. v. Hulven Internat., Inc. (2017) 14 Cal.App.5th 156,
170.)7 Although Straiton states in his reply brief that the statute
of limitations “does not bar [him] from recovering his 12% share
of the revenues” because he “merely seeks enforcement of the
contract” and “does not seek to reverse the 2008 asset-shifting,”
we do not consider the argument, made as it was for the first
time in his reply brief. (See Raceway Ford Cases (2016) 2 Cal.5th
161, 178; Gallo v. Wood Ranch USA, Inc. (2022) 81 Cal.App.5th
621, 646; Shih v. Starbucks Corp. (2020) 53 Cal.App.5th 1063,
1071, fn. 4.)

                         DISPOSITION

      The judgment in favor of KBSI is affirmed, and the
judgment in favor of Binder is reversed. The trial court is
directed to vacate its order granting Binder’s motion for summary

7    In 2015 the Legislature renamed the Uniform Fraudulent
Transfer Act the Uniform Voidable Transactions Act. (See
Universal Home Improvement, Inc. v. Robertson (2020)
51 Cal.App.5th 116, 120.)

                                26
judgment and enter a new order denying that motion; denying
Binder’s motion for summary adjudication on Straiton’s causes of
action for breach of oral contract, money had and received, and
accounting; and granting Binder’s motion for summary
adjudication on Straiton’s cause of action for voidable transfer.
The parties are to bear their costs on appeal.

                                    SEGAL, J.

We concur:

             PERLUSS, P. J.

             MARTINEZ, J.

                               27