Court Opinion

ID: 8417903
Source: CourtListenerOpinion
Date Created: 2022-11-03 18:02:02.429042+00
Date Added: 2024-06-11T16:48:18.096575
License: Public Domain

Filed 11/3/22 Atiz Innovation Co. v. Warnock CA2/3
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION THREE

 ATIZ INNOVATION                                               B314203
 COMPANY LIMITED,

           Plaintiff and Respondent,                           (Los Angeles County
                                                               Super. Ct.
           v.                                                  No. 19LBCV00104)

 NICHOLAS WARNOCK,

           Defendant and Appellant.

      APPEAL from a judgment of the Superior Court of
Los Angeles County, Mark C. Kim, Judge. Affirmed.
      Law Office of Jeff A. Mann and Jeff A. Mann; Jeff Lewis
Law, Jeffrey Lewis and Sean C. Rotstan for Defendant and
Appellant.
      Niddrie|Addams|Fuller|Singh and Rupa G. Singh for
Plaintiff and Respondent.
                      ——————————
       This appeal arises from an international dispute over
several unpaid debts. Plaintiff Atiz Innovation Company
Limited, a book scanner manufacturer based in Thailand,
brought this action against its then-North American distributors,
Nicholas Warnock and Atiz Innovation, Inc., alleging failure to
render payment for several scanning units. After a bench trial,
the trial court concluded that Atiz Innovation, Inc. breached its
contracts with plaintiff, imposed alter ego liability upon Warnock,
and awarded damages. Warnock appeals, arguing that plaintiff’s
failure to meet Corporations Code section 2203, subdivision (c)’s1
prerequisites for a foreign corporation to maintain an action in
California state courts deprived plaintiff of standing, and that
plaintiff inadequately pleaded alter ego liability, thereby
impairing Warnock’s ability to prepare a defense. We are
unpersuaded, and therefore affirm.
                          BACKGROUND
I.     Underlying facts
       The following facts have been gleaned from evidence
presented at the May 2021 bench trial unless otherwise
indicated.
       When he was a Ph.D. student, Sarasin Booppanon devised
a device to automate the scanning of books. His book scanner has
since become the standard method for digitizing books, utilized
by universities, government, organizations, and museums,
including the U.S. Supreme Court, U.C. Berkeley, Harvard,
Stanford, Yale, and the Library of Congress.

      1All undesignated statutory references that follow are to
the Corporations Code.

                                2
       Booppanon saw defendant Warnock, a photocopier
salesman, on a reality TV show called “The Apprentice” in 2004.
He contacted Warnock to ask whether he would be interested in a
business partnership. In or around 2006, Booppanon and
Warnock agreed that Booppanon would set up a company in
Thailand, Plaintiff Atiz Innovation Company Limited
(hereinafter Atiz Thailand), to manufacture the scanners, and
Warnock would set up a company in California, Defendant Atiz
Innovation, Inc. (hereinafter Atiz California), to sell the book
scanners exclusively in North America, including the United
States, Canada, and Mexico. Booppanon would serve as Atiz
Thailand’s CEO. Atiz Thailand was not itself certified to do
business in California.
       Atiz Thailand held 66.7% of shares in Atiz California, while
Warnock was a 33.3% shareholder. The shareholder agreement
provided that two of Atiz California’s three directors could be
designated by Atiz Thailand, while Warnock designated the
third.
       However, no directors or officers were appointed for Atiz
California, and Warnock alone served as its president, CEO,
CFO, secretary, director, and employee, while running the
company from his home. Atiz Thailand never received any
statements regarding Atiz Thailand’s capital contributions, Atiz
California’s annual tax returns, invitations to Atiz California’s
shareholder meetings, documentation of Atiz Thailand’s capital
account, or corporate minutes related to Atiz California. Atiz
California’s sole line of products and sole line of income was
through selling Atiz Thailand’s units in the United States.
       Warnock obtained the book scanners on credit from Atiz
Thailand, sold them at a markup, paid Atiz Thailand its retail

                                3
manufacturing costs, and kept the rest of the profit. Warnock
handled all aspects of the distribution in California and all of
North America, including attending trade shows and calling and
traveling to see potential customers whose inquiries on Atiz
Thailand’s website were forwarded to him;2 closing sales with
added insurance or warranties at extra cost; clearing scanners
from customs; shipping the scanners from Atiz California’s
warehouse to customers; collecting payments; training customers’
staff and helping with installation; troubleshooting any repairs or
shipping-related damages; and paying Atiz Thailand.
       Atiz Thailand’s only role in the sales process was shipping
the product and invoicing Warnock and Atiz California;
customers directed any complaints to Warnock. Atiz Thailand
used United States customers of the product in Atiz Thailand’s
worldwide marketing. Atiz California, through Warnock,
coordinated introductions of potential non-U.S. customers of Atiz
Thailand to meet with U.S. customers of the product.
       Starting in 2015, Atiz California fell behind on payments
and then stopped paying Atiz Thailand its share from sales. Atiz
California acknowledged the debts in letters that Warnock
signed, and agreed to a payment plan, but discontinued payments
after a few months, leaving an outstanding balance of

      2 Warnock   counted the U.S. Supreme Court, the State
Department, Guantanamo Bay, Stanford, U.C. Berkeley,
Harvard, Yale, the University of British Columbia, and
“prestigious libraries all over the world” as among his and Atiz
California’s “clients.”

                                 4
$310,038.96 after Atiz Thailand forgave some of the debt.
According to Warnock, the quality of the units dropped in 2015.3
       Still, between 2015 and 2018, Atiz California collected
nearly $2.3 million in gross revenue. Around 2016, Atiz Thailand
gave its shares in Atiz California to Warnock, making Warnock
Atiz California’s sole 100% shareholder, in addition to serving as
the company’s sole officer, director, employee, and decision-
maker. According to Warnock, Booppanon explained to Warnock
that Booppanon needed to relinquish his shares in Atiz
California, without receiving anything in return, because Atiz
Thailand had decided to go public in Thailand, In 2018, Atiz
Thailand terminated its agreements with Atiz California.
II.    Relevant proceedings below
       Atiz Thailand filed the underlying breach of contract action
against Atiz California and Warnock in 2019. The complaint did
not mention alter ego, alleging only that each defendant was
acting as an agent of the other and within the scope of such
agency. It also alleged that Warnock filed paperwork with the
California Secretary of State attesting that he served as Atiz
California’s president, CEO, Secretary, and CFO, and was its sole
owner.
       On April 3, 2019, Warnock filed a demurrer and motion to
strike. Warnock argued that the pleading of Atiz Thailand as a
foreign corporation was uncertain as to its capacity to sue. The
trial court overruled the demurrer on the issue of foreign status
and capacity to sue, reasoning that the argument was
undeveloped and could be raised as an affirmative defense.

      3 Theprincipal of Atiz Thailand’s new distributor in the
United States and Canada testified that Atiz Thailand’s product
continued to manufacture “top-quality product[s].”

                                 5
       Trial had been scheduled for March 27, 2020. In January
2020, Atiz Thailand issued third-party deposition and trial
subpoenas to defendants’ accounting firm, bank, and
transactional attorneys seeking production of defendants’
financial, tax, accounting, and banking records as well as
corporate books and records. Defendants moved to quash or
modify the subpoenas for allegedly seeking irrelevant and private
information, among other reasons.
       On February 26, 2020, Atiz Thailand filed opposition briefs
arguing that the subpoenaed records were necessary to pierce the
corporate veil under the doctrine of alter ego. The oppositions
further detailed that defendants’ depositions had made “clear
that Warnock, as the sole owner of Atiz [California], is
attempting to use the corporation to prevent any recovery by Atiz
[Thailand].” Atiz Thailand went on to explain that Warnock had
set up Atiz California as a “flimsy organization to escape personal
liability,” that he took all the money collected by the company for
his personal uses, that he undercapitalized the company to pay
its creditors, and that the failure to disregard the corporate form
under these circumstances would promote injustice. In two of its
oppositions, Atiz Thailand argued that “[d]efendants should not
be allowed to hinder discovery of facts relating to alter ego
liability by refusing to produce the documents themselves . . . and
by objecting to . . . subpoenas to third parties” for such
documents. The register of actions does not reflect that
defendants filed a reply brief.
       On March 5, 2020, defendants filed a trial brief arguing
that Atiz Thailand failed to plead any alter ego theories against
Warnock, that Warnock was “not personally liable” under an
alter ego theory, and that Atiz Thailand’s failure to register to do

                                 6
business in California deprived it of standing to pursue its
complaint.
       In advance of a March 10, 2020 appearance on the motions
to quash, the trial court issued an undated tentative ruling
partially granting the motion to quash, while stating that Atiz
Thailand “plead[ed] an alter ego theory.” Consistent with this
conclusion, the trial court tentatively modified the deposition
subpoenas to limit discovery of Warnock’s personal financial
records to “financial transactions between Warnock and Atiz
[California]” or his “connection/activity with Atiz [California].”
The trial court tentatively tailored the deposition and trial
subpoenas to defendants’ attorneys to materials that “support
[Atiz Thailand]’s alter ego theory.” On March 10, the parties
submitted on the tentative ruling, and the trial court issued a
final ruling consistent with it.
       Trial was continued to May 7, 2021.4 In the intervening
period defendants did not attempt to address the trial court’s
statements regarding the complaint’s alter ego allegations in its
motion to quash ruling. On April 28, 2021, Atiz Thailand filed a
trial brief outlining its evidence that Atiz California was
Warnock’s alter ego, but not addressing the pleading allegations
raised in defendants’ March 5, 2020 trial brief. On May 3, 2021,
the trial court held a final status conference, at which Atiz
Thailand’s counsel learned from defendants’ counsel that
defendants had filed their trial brief over a year before. Atiz

      4 The   record is unclear as to the reason for the continuance,
but it is likely that the original March 2020 trial date had to be
postponed due to the COVID-19 pandemic. (See Bullock v.
Superior Court (2020) 51 Cal.App.5th 134, 141 [COVID-19
protocols proper subject of judicial notice].)

                                  7
Thailand’s counsel subsequently reviewed his files and confirmed
that he had not received defendants’ trial brief, despite a proof of
service reflecting March 5, 2020 service on his firm.
       Atiz Thailand ultimately received defendants’ March 5,
2020 trial brief on May 6, 2021, and filed a trial brief on alter ego
liability the same day, also requesting to file an “addendum” to
the complaint regarding alter ego liability. Atiz Thailand
explained that its agency allegations sufficed to plead alter ego,
but also, in an abundance of caution, asked the trial court for
leave to amend its pleading to correct any inadvertence.
According to Atiz Thailand, such an amendment would not
prejudice Warnock as he was named individually in the action,
had defended himself and conducted discovery, and was aware of
the possibility of individual liability being sought against him
under an alter ego theory when he filed his trial brief over a year
ago. Declining to permit Atiz Thailand to pursue alter ego
liability would be inequitable because Atiz California’s bank
account was empty and the company had no ability to pay a
judgment. The record, including the register of actions, does not
reflect an order allowing amendment to the complaint.
       The next day, as trial commenced, the trial court overruled
defendants’ objection that evidence of alter ego liability at trial
would be a surprise, and noted that its adjudication of the motion
to quash addressed the issue extensively. The trial court
informed defendants’ counsel that it intended to “hear all of the
evidence including if there is an allegation of alter ego . . . so if
you're not ready, you need to let me know now because I intend to
hear all evidence, including allegations of alter ego.” Defendants’
counsel stated, without qualification: “We’re ready.”

                                 8
      At the ensuing bench trial, defendants attempted to
counter Atiz Thailand’s alter ego allegations in several ways.5
While cross-examining Booppanon, defendants introduced
evidence of Atiz Thailand’s accounts receivables and secured an
admission that all payments—PayPal transactions possibly
excluded— from sales of the book scanners were made by Atiz
California, not Warnock. Warnock confirmed that none of the
payments were from his personal account, nor did he receive
payments personally from Atiz Thailand.
      Defendants also introduced, with some success, evidence
that Atiz Thailand directed payment requests to Atiz California,
rather than Warnock individually. Defendants challenged
Booppanon’s statements that he did not receive any corporate
resolutions or shareholder meeting invitations from Atiz
California by unsuccessfully attempting to introduce a corporate
resolution and through Warnock’s testimony, in effect, that
Boopannon signed at least one corporate resolution in 2008.
      Warnock also surmised that Atiz California as a C
corporation might have sent out Form K-1s listing each
shareholder’s earnings; that it put Atiz Thailand’s capital
contribution on the books; and that it would have provided
distributions or copies of tax returns, held shareholder meetings
or provided ballots for voting on directors if Atiz Thailand or
Booppanon had requested such. Warnock disputed commingling

      5 A party asserting alter ego must demonstrate (1) a unity
of interest and ownership such that the separate personalities of
the corporation and the individual(s) no longer exist, and (2) that,
if the acts are treated as those of the corporation alone, an
inequitable result will follow. (Associated Vendors, Inc. v.
Oakland Meat Co. (1962) 210 Cal.App.2d 825.)

                                 9
funds, denying that he paid personal bills from Atiz California’s
bank account, otherwise taken money out of it, or put his own
money into its account.
       After determining that Atiz California failed to pay
approximately $310,000 in unpaid invoices, the trial court heard
argument as to whether Warnock should be held personally liable
for those obligations. As to the first element of alter ego, Atiz
Thailand argued that the evidence showed that Warnock, as sole
employee, officer, director, and shareholder, used the company in
such a way that it had no separateness from himself, observing
no corporate formalities, undercapitalizing it, and commingling
funds.
       Defendants’ counsel reasserted that Atiz Thailand had
inadequately pleaded alter ego, and the trial court overruled the
objection, reminding counsel of his pre-trial assurance that
defendants were ready for trial on the issue. Counsel then added
that there was nothing unusual for a small company like Atiz
California to have Warnock as its only shareholder, officer,
director, or decision-maker. Further, the evidence was
inconclusive whether Atiz California followed corporate rules
governing C corporations because Warnock testified he left such
matters to his accountant and attorneys. The trial court
indicated that position was unpersuasive because Warnock held
all officer positions.
       On the second alter ego element, Atiz Thailand argued that
Warnock, as Atiz California’s sole employee and shareholder and
employee, made $2.2 million in gross income during the three
years that defendants failed to pay Atiz Thailand’s invoices.
Allowing him to shield himself from liability and retaining money
rightfully belonging to Atiz Thailand would be unjust. In

                               10
response, defendants argued that Atiz Thailand’s mere
dissatisfaction as a creditor of a business venture that ultimately
did not work out did not suffice for equitable relief. This dispute
only arose when problems began with the equipment. Injustice
could not be established simply because a corporation does not
have the funds to pay a judgment. Rebutting that latter point,
Atiz Thailand provided case law establishing the contrary
proposition.
       The trial court ruled that there was substantial evidence of
alter ego liability, finding Warnock’s testimony not credible on
this issue.
       Defendants’ counsel then reasserted that Atiz Thailand
lacked standing because it did not register as a foreign company
authorized to do business in California under Corporations Code
section 2105. Atiz Thailand countered that the statute did not
apply because it only requires foreign companies to register to
conduct intrastate business in California, not interstate or foreign
commerce, as was the case with Atiz Thailand. The trial court
rejected the standing argument without elaboration.6
       Warnock timely appealed.
                            DISCUSSION
I.     Standard of review
       The parties agree, as do we, that because the two issues
framed on appeal involve only application of law to undisputed
facts, we apply de novo review. (Harustak v. Wilkins (2000) 84
Cal.App.4th 208, 212–213.)

      6 Neither   party requested a statement of decision.

                                  11
II.    Atiz Thailand had standing
       Warnock contends that Atiz Thailand lacked standing to
pursue this action because it failed to register with the state at
any point during this matter, as California law requires foreign
corporations transacting intrastate business to do before
pursuing litigation within its courts. We concur with the trial
court that Atiz Thailand was not transacting intrastate business
under the meaning of the relevant statutes, and therefore reject
Warnock’s standing argument.
       We begin with the relevant statutory backdrop. A foreign
corporation is prohibited from transacting intrastate business
without obtaining a certificate of qualification from the Secretary
of State. (§ 2105, subd. (a).) A noncompliant foreign corporation
risks a number of civil and criminal sanctions, including, as
relevant here, that it “shall not maintain any action or
proceeding upon any intrastate business so transacted in any
court of this state, commenced prior to compliance with [s]ection
2105, until it has complied with the provisions thereof and has
paid to the Secretary of State a penalty of two hundred fifty
dollars ($250) in addition to the fees due for filing the statement
and designation required by [s]ection 2105 and has filed with the
clerk of the court in which the action is pending receipts showing
the payment of the fees and penalty and all franchise taxes and
any other taxes on business or property in this state that should
have been paid for the period during which it transacted
intrastate business.” (§ 2203, subd. (c); see §§ 2203, subd. (a);
2258; 2259.) This requirement serves the important purpose of
facilitating service of process, protecting against tax evasion,
ensuring fair dealing by foreign corporations, and equalizing the
regulation of foreign and domestic corporations. (Neogard Corp.

                                12
v. Malott & Peterson-Grundy (1980) 106 Cal.App.3d 213, 219, 223
(Neogard).)
       Moreover, “ ‘transact[ing] intrastate business’ means
entering into repeated and successive transactions of its business
in this state, other than interstate or foreign commerce.” (§ 191,
subd. (a).) As another panel of this division previously opined
regarding an earlier iteration of this provision, this definition
entails “substantial[]” and “continuing” activities within the
state. (Beirut Universal Bank v. Superior Court (1969) 268
Cal.App.2d 832, 841; accord, Detsch & Co. v. Calbar, Inc. (1964)
228 Cal.App.2d 556, 567 [foreign corporation’s activities need not
be “entirely” intrastate, only “substantial[ly]” intrastate].)
Whether a corporation’s activities satisfy this standard typically
hinges upon the particular facts of each case. (West Publishing
Co. v. Superior Court (1942) 20 Cal.2d 720, 727.)
       However, by statute, a foreign corporation does not
transact intrastate business “solely by reason of” seeking sales
orders where the orders are accepted outside the state, among
other enumerated activities. (§ 191, subd. (c).) Importantly, our
Supreme Court has interpreted this provision to apply more
narrowly than the statute governing service of process, which
concerns whether an entity is merely “doing business” in the
state. (Borgward v. Superior Court (1958) 51 Cal.2d 72, 76
[legislature “clearly recognized that a corporation may do
business in this state without transacting intrastate business”];
see United Medical Management Ltd. v. Gatto (1996) 49
Cal.App.4th 1732, 1740 [“[s]ection 2203, subdivision (c) is . . .
narrowly construed to effect its remedial purpose”].)
       Here, Warnock argues that the California activities of Atiz
Thailand—a foreign corporation that was uncontestably never

                               13
certified to do business within the state—were sufficiently
substantial to warrant the conclusion that it was “ ‘transact[ing]
intrastate business’ ” under section 191, subdivision (a).
Specifically, Warnock points to his receiving orders in California
as Atiz Thailand’s sole North American distributor (including
$2.3 million in sales during the last three years of their
relationship), Atiz Thailand’s shipping most of its North
American sales directly to California, their several California-
based customers, and that payments for sales flowed through
California.
       Atiz Thailand counters that it engaged in a singular
transaction in California—its agreement with Atiz California, a
California company, to exclusively distribute its products within
North America. Moreover, that agreement’s purpose and effect
was for Atiz California to conduct interstate and foreign
commerce, which is specifically excluded from section 191,
subdivision (a)’s definition of transacting intrastate business.
Thus, the activities within California, as well as throughout
North America, that Warnock invokes were not attributable to
Atiz Thailand, but were “delegated . . . to defendants as its
distributors.”
       Atiz Thailand has the better argument. Boiled down, the
intrastate activities to which Warnock refers were his and Atiz
California’s own, not those of Atiz Thailand. While Atiz Thailand
was technically a beneficiary of several sales that Warnock and
Atiz California completed, Atiz Thailand’s only role in those
transactions was shipping their product and receiving payments
from their location outside of California. Concluding that Atiz
Thailand was transacting intrastate business on this basis, as
Warnock urges, would directly contravene the statutory exclusion

                               14
for entities that “[solicit] or procur[e] orders, . . . where [such]
orders require acceptance outside this state before becoming
binding contracts.” (§ 191, subd. (c)(6); see W. W. Kimball Co. v.
Read (1919) 43 Cal.App. 342, 345 [“Manifestly, the sales, followed
by the delivery of the pianos in this state, upon orders sent from
this state to the appellant in the state of Illinois, are transactions
in interstate commerce and beyond the scope of the statute.”];
Thorner v. Selective Cam Transmission Co. (1960) 180 Cal.App.2d
89, 91 [no intrastate business where final acceptance of the offer
is made outside the state, even when negotiations are carried out
within the state by an agent of a foreign corporation]; cf.
Neogard, supra, 106 Cal.App.3d at p. 226 [corporation transacted
intrastate business where California activities extended beyond
interstate sales contracts, e.g., “induc[ing] contracts between . . .
in-state parties” and supervising in-state activities].7) This rule
applies with no less force to multiple transactions over a span of
time, as occurred here. (Detsch & Co. v. Calbar, Inc., supra, 228
Cal.App.2d at p. 567.)
       The significance of Atiz Thailand’s, by its own admission,
“delegat[ing]” several apparently intrastate activities to Atiz
California does not escape us, especially given the important
goals that corporate registration serves. (See Neogard, supra,
106 Cal.App.3d at p. 226 [considering foreign corporation’s
“strategic[]” conduct to circumvent registration requirements];
id. at pp. 219, 223 [discussing policies undergirding registration
requirement].) However, the statutory scheme grants us no

      7 Though  Warnock’s opening brief primarily relied on
Neogard, supra, 106 Cal.App.3d at page 216, he acknowledged
that the case was factually distinct in several senses in his reply
brief, and we therefore do not address it further.

                                 15
license to disregard corporate formalities, and, in fact, strongly
counsels against doing so. (See, e.g., § 191, subd. (b) [foreign
corporation not “transacting intrastate business” merely because
subsidiary does so or because of its holdings or statuses].)
       However, even if we could deem Atiz California as standing
in Atiz Thailand’s shoes for the purposes of this analysis, a
significant portion of Atiz California’s sales and activities
spanned throughout the continent, not just California, and
therefore fell outside the statute’s reach. (§ 191, subd. (a)
[excluding interstate and foreign commerce from definition of
transacting intrastate business].)8 Moreover, even Atiz
California’s sales to California buyers had an indispensable
international character, given that Atiz Thailand was required to
ship its products from Thailand to effectuate every sale. In other
words, given the narrow construction we must apply to section
2203, subdivision (c) (United Medical Management Ltd. v. Gatto,
supra, 49 Cal.App.4th at p. 1740), we are compelled to conclude
that Atiz Thailand’s intrastate activities were insufficiently
“substantial[ ]” to require it to obtain a certificate in order to
maintain this action. (Beirut Universal Bank v. Superior Court,
supra, 268 Cal.App.2d at p. 841.)

      8 The  precise geographic reach of the transactions giving
rise to the $310,000 in unpaid invoices is unclear from the record.
(See Detsch & Co. v. Calbar, Inc., supra, 228 Cal.App.2d at p. 567
[analyzing corporate activities during period relevant to lawsuit’s
allegations only].) However, we assume for argument’s sake that,
like Atiz California’s other sales over duration of its relationship
with Atiz Thailand, the transactions involved a mix of in-state
and out-of-state purchasers.

                                16
       For these reasons, Atiz Thailand had standing to pursue its
complaint.
II.    Warnock has failed to demonstrate any alter ego
pleading defect was prejudicial
       Warnock further claims that the trial court’s imposition of
alter ego liability against him was reversible error because Atiz
Thailand did not adequately plead alter ego. Because Warnock
has failed to demonstrate that any infirmity in Atiz Thailand’s
pleadings prejudiced him, we reject this argument.
       California courts liberally construe complaints, but a
plaintiff must at least “set forth the actionable facts relied upon
with sufficient precision to inform the defendant of what plaintiff
is complaining, and what remedies are being sought.” (Signal
Hill Aviation Co. v. Stroppe (1979) 96 Cal.App.3d 627, 636.)
Fairness requires that a defendant have adequate notice to
defend a cause of action. (Bradley v. Hartford Acc. & Indem. Co.
(1973) 30 Cal.App.3d 818, 825.)
       Authorities have long been split as to whether alter ego
must be pleaded in a complaint. (See Leek v. Cooper (2011) 194
Cal.App.4th 399, 413–415 [surveying cases].) Several say that it
must be, while others state that a defendant’s denial of liability is
sufficient to place the alter ego doctrine at issue. (Id. at p. 413.)
Courts often apply a more exacting standard to pleading
deficiencies at the pleadings stage, but excuse such infirmities
where a case proceeds to trial, and a defendant has received
sufficient notice such that it is not “ ‘misled to its prejudice by
any variance between pleadings and proof. ’ ” (Id. at p. 414.)
       We decline to join the alter ego pleadings fray, and instead
reject Warnock’s invitation to reverse because, even assuming
Atiz Thailand was legally obliged to plead alter ego and did not

                                 17
adequately do so, Warnock has not shown that any shortcomings
in Atiz Thailand’s pleadings sufficiently prejudiced him. In
addition to the alter ego specific authorities cited above, the
general principle of appellate jurisprudence that we will not
disturb a judgment absent an affirmative showing by appellant of
prejudicial error is among the most fundamental within this
state. (See Cal. Const., art. VI, § 13 [error must result in
“miscarriage of justice” to warrant reversal]; see also In re
Marriage of Garcia (2017) 13 Cal.App.5th 1334, 1344 [appellant
“has the burden of establishing prejudicial error”]; People v. Chun
(2009) 45 Cal.4th 1172, 1201 [California Constitution prohibits
reversal due to trial court error unless error was prejudicial].)
       Warnock has scarcely attempted to meet that burden, aside
from a vague remark that he was prejudiced because, by the time
Atiz Thailand filed its trial brief on alter ego the day before trial,
discovery was cut off under Code of Civil Procedure section
2024.020. Warnock neglects, however, that, had he required
additional discovery on account of this purported new theory, he
could have easily sought a continuance of the trial date and a
reopening of discovery. (Code Civ. Proc. §§ 2024.020, subd. (b);
2024.050.) In fact, Warnock declined to seek such a remedy when
the trial court, prior to the commencement of trial, inquired
whether he was prepared to go forward specifically on the alter
ego question. To the contrary, his counsel stated that they were
“ready.”
       Moreover, the record, by all indications, corroborates that
Warnock was, in fact, “ready.” Over a year before trial
commenced, the parties litigated the relevance of alter ego when
Warnock moved to quash several subpoenas, and the trial court
allowed discovery of Warnock’s personal finances because it

                                 18
deemed Atiz Thailand to have “plead[ed] an alter ego theory” and
that such discovery was necessary to “support” that theory. This
order left no ambiguity that alter ego was at issue, consistent
with Warnock’s trial brief, filed days before, arguing not merely
that alter ego was inadequately pleaded but also that the
allegations failed on their merits. Notably, in 2020, Warnock
submitted on the trial court’s tentative discovery ruling, and did
not attempt to correct the court’s purported misapprehensions
regarding the pleadings. Then, approximately one year passed
during which Warnock did not seek to conduct discovery,
culminating in Atiz Thailand’s two trial briefs—filed prior to the
above-discussed statement of trial readiness—regarding alter ego
liability. Taking this procedural history as a whole, Warnock
could not have been in doubt that alter ego was among the issues
for trial.
       And if this history and Warnock’s counsel’s own assurances
did not alone suffice to counter Warnock’s meager claims of
prejudice, Warnock’s vigorous trial defense of the alter ego
allegations settles the question. Alter ego was the trial’s focal
point, the primary focus of the parties’ witness examinations and
their closing arguments. Warnock has not specified what
additional evidence he might have presented or further strategies
he might have pursued at trial had Atiz Thailand more
specifically pleaded alter ego, and based upon this record, we can
discern none. As such, we cannot say that Warnock was “ ‘misled
to [his] prejudice’ ” based upon the materials before us. (Leek v.
Cooper, supra, 194 Cal.App.4th at p. 414.)
       For these reasons, Warnock has not shown that Atiz
Thailand’s alleged failure to plead alter ego was prejudicial error.

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                         DISPOSITION
     The judgment is affirmed. Atiz Innovation Company
Limited is awarded its costs on appeal.
     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                              RICHARDSON (ANNE K.), J.*

We concur:

             EDMON, P. J.

             EGERTON, J.

      * Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

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