NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT OCT 25 2013
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
CENTURY SURETY COMPANY, an No. 13-35039
Ohio corporation,
D.C. No. 2:12-cv-00823-MJP
Plaintiff - Appellee,
v. MEMORANDUM*
BELMONT SEATTLE, LLC, a California
limited liability company, and MARWAN
and JACQUELINE F. BAHU, husband
and wife, and their marital community,
Defendants - Appellants.
Appeal from the United States District Court
for the Western District of Washington
Marsha J. Pechman, Chief District Judge, Presiding
Argued and Submitted October 8, 2013
Seattle, Washington
Before: TASHIMA, GRABER, and MURGUIA, Circuit Judges.
Century Surety Company (“Century”) sued Belmont Seattle, LLC
(“Belmont”), and two of its partners, Marwan and Jacqueline F. Bahu, seeking a
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
declaration that it had no duty to defend Belmont and the Bahus in a civil suit
alleging construction defects in condominium units Belmont had converted from
rental units and subsequently sold. Century had issued a liability insurance policy
that Belmont asserts covered the units it sold. Whether any of the units were
covered by the policy – and whether Century had a duty to defend – depends on
whether Belmont had ever “rented” any of the units or “held [them] for rental”
while the policy was in effect. The district court determined that Westmoore
Management, LLC (“Westmoore”), a partner in Belmont that was also responsible
for managing the rental tenancies of units prior to their conversion and sale, “stood
in the shoes of Belmont.” On this basis it found that Belmont had “rented” the
units or “held [them] for rental,” and so granted summary judgment to Century.
However, on this record, at the summary judgment stage, it was not appropriate to
reach the conclusion that Westmoore “stood in the shoes of Belmont.”
There is no dispute that Belmont and Westmoore have always been legally
distinct entities; what is disputed is whether the district court should have
disregarded that distinction. Under governing California law,1 “‘the corporate
1
Because Belmont is a California limited liability company, Washington
state law requires courts to apply California law with regard to “its organization
and internal affairs and the liability of its members and managers.” Wash. Rev.
Code § 25.15.310(1)(a).
2
form will be disregarded only in narrowly defined circumstances and only when
the ends of justice so require.’” Zoran Corp. v. Chen, 110 Cal. Rptr. 3d 597, 606
(Ct. App. 2010) (quoting Mesler v. Bragg Mgmt. Co., 702 P.2d 601, 607 (Cal.
1985)). Summary judgment based on disregard of the corporate form is typically
not appropriate, because “[w]hether a party is liable under an alter-ego theory is
normally a question of fact.” Id. (citing Las Palmas Assocs. v. Las Palmas Ctr.
Assocs., 1 Cal. Rptr. 2d 301, 317 (Ct. App. 1991)). Depending on the
circumstances, many factors may potentially be considered, and “‘[n]o single
factor is determinative.’” Id. at 607 (quoting Virtualmagic Asia, Inc. v.
Fil-Cartoons, Inc., 121 Cal. Rptr. 2d 1, 13 (Ct. App. 2002)). The district court
based its conclusion seemingly exclusively on language in a deed transferring the
property at issue to Belmont from a joint venture that included Westmoore as a
member. The deed states that a “mere change in identity or form” distinguishes
Belmont from the joint venture it succeeded. This single document by itself is not
sufficient to prove that Belmont is Westmoore’s alter ego, and the record is unclear
as to whether other potentially relevant factors would support or undermine the
district court’s conclusion. See id. at 606-07. Because it may not be possible to
impute Westmoore’s activity to Belmont, it is not an indisputable fact that Belmont
“rented” the condominium units it later sold or “held them for rental.” Summary
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judgment may very well be appropriate on a more developed record, but it was not
appropriate on this one.
Both Belmont and the Bahus noticed appeal, but the Bahus failed to file any
briefing, nor did they join Belmont’s briefing. Consequently, their appeal is not
properly before this court. See General Order 2.3(a).
We REVERSE the district court’s order granting summary judgment to
Century as to Belmont and REMAND for further proceedings. We DISMISS the
Bahus’ appeal.
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