Court Opinion

ID: 6226419
Source: CourtListenerOpinion
Date Created: 2022-02-16 20:01:55.909988+00
Date Added: 2024-06-11T08:57:39.328788
License: Public Domain

Filed 2/16/22 Northern Cal. Collection Service v. Perez CA1/4

        NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not
been certified for publication or ordered published for purposes of rule 8.1115.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

                            FIRST APPELLATE DISTRICT

                                        DIVISION FOUR

 NORTHERN CALIFORNIA
 COLLECTION SERVICE, INC.,
           Plaintiff and Respondent,                               A157907

 v.                                                                (Contra Costa County
 ADRIAN PEREZ,                                                     Super. Ct. No. MSC18-01980)
           Defendant and Appellant.

          Defendant Adrian Perez, then doing business as a sole
proprietorship under the name ALP Construction (ALP),
underpaid the State Compensation Insurance Fund (State Fund)
by almost $100,000 for workers’ compensation premiums for its
2014 policy. Sued on the debt by a collection agency, Perez argued
in opposition to summary judgment that plaintiff Northern
California Collection Service, Inc. (Northern) lacked standing to
pursue the action because State Fund’s assignment of the claim
to Northern named only ALP Construction & Painting, Inc. (ALP
Inc.) as the debtor (a corporate entity Perez formed after entering
into the 2014 policy, which was also named in final premium
bill), rather than Perez in his individual capacity or any other

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Perez entity previously insured by State Fund. The trial court
found no triable issues of material fact and granted summary
adjudication on Northern’s cause of action for an open book
account. We affirm.
                           BACKGROUND
I.    The policies
      In February 2014 Perez, doing business as ALP
Construction, purchased a workers’ compensation insurance
policy from State Fund. The policy, number 9089033-14, was for
the period from February 13, 2014 through February 13, 2015
(the 2014 policy). Perez paid State Fund $37,008.32 in premiums
for the coverage period.
      The 2014 policy automatically renewed on February 13,
2015. On March 5, 2015, Perez informed State Fund that he had
incorporated his business as ALP Inc. State Fund issued an
endorsement changing the name of its insured from Perez as an
individual to ALP Inc., effective the February 13, 2015 renewal
date. The notice sent to ALP Inc. expressly stated that the
endorsement did not otherwise “vary, alter, waive or extend” any
policy terms, conditions, agreements or limitations. State Fund
thereafter used the “ALP Inc.” corporate entity’s name on its
correspondence and documents, even if they related to the prior
coverage period for Perez’s sole proprietorship as ALP.1
      In July 2015, as a result of a standard payroll audit, State
Fund billed ALP Inc. $99,769.02 in additional premiums owed on

      1 State Fund did not require a new application for ALP
Inc.’s policy because Perez was the corporation’s sole owner.

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the 2014 policy. Then, effective August 28, 2015, it cancelled ALP
Inc.’s policy for the 2015-2016 coverage year (the 2015 policy) for
nonpayment of premiums and, in March 2016, billed ALP Inc. an
additional $731.49 for coverage from February through August of
2015. In May 2016, State Fund sent a follow-up bill for the total
$100,500.51 owed on both the 2014 and 2015 policies, broken
down by policy year. Perez neither disputed these bills with State
Fund or the Workers’ Compensation Insurance Rating Bureau
nor appealed them to the California Department of Insurance.
II.   The Litigation
      In 2016, after Perez failed to make any payments, State
Fund assigned the account to Northern for collection and
authorized it to file suit on the account. The notice of assignment
identified ALP Inc. as the insured and specified that $99,769.02
of the total $100,500.51 debt was owed for the 2014 policy and
the remaining $731.49 was for the 2015 policy.
      In September 2018, Northern sued Perez as an individual
and in his capacity as a sole proprietor doing business as ALP for
the $99,769.02 owed on the 2014 policy plus attorney fees and
interest. The complaint stated two common counts, for an open
book account and account stated.
      In February 2019 Northern moved for summary judgment.2
Supporting declarations from State Fund and Northern

      2 Northern had obtained a default judgment in an earlier
action against ALP Inc., apparently for the premiums owed on
both policies, but the judgment was set aside. Northern later
dismissed that action after it determined the past due account

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personnel related the above history and attached the relevant
policy declarations, endorsements, bills, payroll audit materials,
and the assignment for collection.
      Perez adduced no opposing evidence but argued Northern
lacked standing to pursue the action against him because the
assignment named, and the post-audit bill for the 2014 policy
premiums was addressed and sent only to, ALP Inc., not ALP or
Perez as an individual. Further, he maintained there was no
evidence that State Fund had assigned any claims against Perez
or ALP to Northern.
      The trial court granted summary adjudication as to the
first cause of action, for open book account, and declined to rule
on the largely duplicative second cause of action as moot. It
explained that Perez “does not dispute that the insurance policy
and related contract documents from 2014 contractually
obligated him to pay the final, post-audit premium due under his
2014-2015 workers’ compensation insurance policy. . . . [Perez]
also does not offer opposition evidence disputing the dollar
amount of that final premium.
      “Rather, [Perez] argues that two subsequent documents
mistakenly identify his wholly owned corporation [ALP Inc.] as
the insured under the 2014-2015 policy, and that those mistakes
preclude his individual liability. The two documents are: (1) the

consisted of two bills, one for Perez’s sole proprietorship for the
2014 policy and one for ALP Inc. for 2015. It then filed the
instant action against Perez for the amount owed on the 2014
policy.

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final premium bill, dated July 27, 2015, and (2) the assignment
from the insurer to plaintiff, dated June 22, 2016. . . . These
arguments are unconvincing.
      “With regard to the final premium bill, [Perez] does not
articulate a reasoned argument as to how any technical mistake
in the form of the bill somehow relieves him of contractual
liability. [Perez’s] liability is based on the contractual documents
from 2014, and not on the July 2015 bill itself; the bill is not a
contractual document.
      “With regard to the assignment, the Court notes that this
document expressly references the 2014-2015 policy, No.
9089033-14 (top right), as well as the precise dollar amount owed
by [Perez] under the terms of that policy. . . . Further, the
insurer’s declarant affirmatively alleges that the insurer assigned
its claim under the 2014-2015 policy to [Northern], and
authorized [Northern] to commence this action against [Perez].
. . . [Perez] has not offered opposition evidence raising a triable
issue of fact on this point.”
      Northern subsequently dismissed its second cause of action
and judgment was entered against Perez. This appeal is timely.
                           DISCUSSION
I.    Legal Standards
      Summary judgment is proper when there is no triable issue
as to any material fact and the moving party is entitled to
judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).)
“[T]he party moving for summary judgment bears an initial
burden of production to make a prima facie showing of the

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nonexistence of any triable issue of material fact; if he carries his
burden of production, he causes a shift, and the opposing party is
then subjected to a burden of production of his own to make a
prima facie showing of the existence of a triable issue of material
fact.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826,
850.)
        “The court must ‘grant[ ]’ the ‘motion’ ‘if all the papers
submitted show’ that ‘there is no triable issue as to any material
fact’ [citation]—that is, there is no issue requiring a trial as to
any fact that is necessary under the pleadings and, ultimately,
the law [citations]—and that the ‘moving party is entitled to a
judgment as a matter of law’ [citation]. . . . In ruling on the
motion, the court must ‘consider all of the evidence’ and ‘all’ of
the ‘inferences’ reasonably drawn therefrom [citation], and must
view such evidence [citations] and such inferences [citations] in
the light most favorable to the opposing party.” (Aguilar v.
Atlantic Richfield Co., supra, 25 Cal.4th at p. 843.)
        We review a ruling granting summary judgment de novo.
(Horn v. Cushman & Wakefield Western, Inc. (1999)
72 Cal.App.4th 798.)
II.     Analysis
        While Perez introduced no evidence in opposition to
summary judgment, he contends material issues exist as to
(1) whether he is individually liable for the outstanding 2014
premiums even though State Fund addressed the bill to ALP Inc.,
rather than to ALP or Perez; (2) whether State Fund’s
assignment of the debt for collection to Northern constituted an

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assignment of claims against Perez as an individual under the
2014 policy; and (3) whether State Fund authorized Northern to
pursue legal action against Perez as an individual. He asserts
these inconsistencies demonstrate the existence of triable issues
of material fact that preclude summary judgment. We disagree.
      First, the documentary evidence presented at summary
judgment, which Perez concedes is genuine, demonstrates Perez
was the sole proprietor of ALP when it purchased the insurance
policy; that, at Perez’s request, the policy was transferred to the
re-formed ALP, Inc., where Perez was again the sole owner; and
that the debt associated with the policy was assigned to
Northern.
      It is clear from both the July 2015 and May 2016 bills that
the $99,769.02 amount was the balance due on the 2014 policy.
As the trial court noted, Perez remains liable for the billed
amount because he contracted with State Fund for workers’
compensation coverage for the 2014 policy year. The fact that
State Fund addressed the bill to his subsequently formed, solely
owned corporate entity, ALP Inc.—at the same address used for
his sole proprietorship, ALP— does not change the nature of that
contractual obligation. Nor does the assignment’s naming of ALP
Inc. rather than ALP or Perez as the insured account holder
when each entity is subject to the same contractual obligation.
“The law respects form less than substance.” (Civ. Code, § 3528;
see, e.g., Webber v. Inland Empire Investments, Inc.
(74 Cal.App.4th 884, 900–901 [noting, in the context of the alter
ego doctrine, that a court may disregard a corporate entity used

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to accomplish a wrongful purpose].) In fact, State Fund’s written
endorsement expressly advised Perez that its agreement to
change the name of its insured to ALP Inc. did not alter any of
his contractual obligations.3 There could have been no
conceivable confusion or “inequit[y.]” Perez was indisputably on
notice that his debt for both policy periods was assigned to
Northern, and there is no “glaring contradiction,” as he
maintains, between the notice of assignment and State Fund’s
written testimony that it assigned the bill for the 2014 policy to
Northern.
      Second, Perez’s claim that there was no evidence that State
Fund assigned any claims against Perez or ALP to Northern is
equally meritless. As repeatedly stated and agreed upon, the
$99,769.02 amount was the balance due in connection with
Perez’s policy for ALP. In transferring the policy to the newly
formed ALP Inc., Perez agreed that this transfer did not “vary,
alter, waive or extend any of the terms, conditions, agreements,
or limitations of this policy. . . .” State Fund subsequently
assigned the full and same debt amount to Northern for collection
and authorized it to file suit on the account. Although at oral
argument Perez asserted the assignment’s identification of Policy
No. 0089033-15 under the heading “assignment information”
meant that Northern could only pursue a claim as to that policy
and ALP, Inc., he overlooks that the one-page document also

      3 “Nothing in this endorsement contained shall be held to
vary, alter, waive or extend any of the terms, conditions,
agreements, or limitations of this policy other than as stated.”

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identified “Policy No. 9089033-14/15” and expressly stated an
outstanding amount of $99,769.02 owed for policy year 2014. We
remain unpersuaded.
      Perez’s remaining claim that Northern is not a real party in
interest with respect to its action against him in his individual
capacity merely rehashes the same meritless points, so we need
not address it separately. Perez cannot hide behind the company
name specified in the assignment to relieve himself or his
business entities of their contractual obligations, particularly
when all agree ALP Inc. continues to be Perez’s solely owned
entity insured under the policy he originally purchased for his
sole proprietorship.
      In summary, our independent review confirms the trial
court’s determination that there were no triable issues of
material fact.
                          DISPOSITION
      The judgment is affirmed. Northern shall recover its costs
on appeal. (Cal. Rules of Court, rule 8.278(a).)

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                                          _________________________
                                          Desautels, J.*

WE CONCUR:

_________________________
Pollak, P.J.

_________________________
Brown, J.

A157907 Northern California Collection Service, Inc. v. Perez

       Judge of the Alameda County Superior Court, assigned by
       *

the Chief Justice pursuant to article VI, section 6 of the
California Constitution.

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