Metropolitan News-Enterprise


Tuesday, May 5, 2020


Page 1


Court of Appeal:

Judgment Creditor May Add Alter Ego As Debtor Through New Action


By a MetNews Staff Writer


A judgment may be amended to include an alter ego as a defendant by means of a separate action, Div. Six of this district’s Court of Appeal held yesterday.

Presiding Justice Arthur Gilbert set forth at the outset of brief opinion:

“In petitioning the trial court to amend a judgment to add an alter ego defendant, must the plaintiff proceed by a motion in the original action, or may plaintiff proceed by complaint in an independent action on the judgment? Either procedure will do.”

The opinion reinstates an action by Alice Lopez to establish that Jose Escamilla is the alter ego of a now-defunct corporation, Magnolia Home Loans, Inc., against which she has a $157,370 judgment based on fraud, negligent misrepresentation, and breach of fiduciary duty. Ventura Superior Court Judge Matthew P. Guasco granted judgment on the pleadings to Escamilla on the theory that the only way of adding him as a judgment debtor was by way of a motion in the original action.

Gilbert wrote:

“It does not matter whether the petition alleging Escamilla is an alter ego of the corporation is labeled a complaint or a motion, or whether the petition is assigned a case number different from the underlying action. The substantive question is whether Escamilla is, in fact, an alter ego.

The jurist cited Code of Civil Procedure §3528 which says:

“The law respects form less than substance.”

Lopez obtained her judgment in 2012 and filed her new action in 2018. The second action is not time-barred, Gilbert said, pointing out that under Code of Civil Procedure §683.020, the judgment is enforceable for 10 years and, under §683.110 et seq., may be renewed.

“By adding an alter ego defendant, the court is not entering a new judgment, but merely inserting the correct name of the real defendant,” he said, adding:

“This may be done at any time.”

Gilbert noted that there is no dispute as to Escamilla being the alter ego of his former corporation.

The case is Lopez v. Escamilla, 2020 S.O.S. 2168.

Oxnard attorney Malcolm R. Tator represented Lopez and Richard W. Tentler, also of Oxnard, acted for Escamilla.


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