Filed 5/21/21 Medical Acquisition v. Valero 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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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 This opinion has not been certified for publication or ordered published for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
SECOND APPELLATE DISTRICT
DIVISION THREE
MEDICAL ACQUISITION COMPANY, B302409
INC.,
(Los Angeles County
Plaintiff and Appellant, Super. Ct. No. BC585918)
v.
GELLY YUKON VALERO et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of
Los Angeles County, Steven J. Kleifield, Judge. Affirmed.
David A. Kay for Plaintiff and Appellant.
Southwest Legal Group, L. Dean Smith, Jr., for Defendants
and Respondents.
_________________________
Appellant Medical Acquisition Company, Inc. (Medical)
sued Southwest Law Center (Southwest) and two of its attorneys,
respondents Gelly Valero and Anthony Lopez, on a variety of
contract and tort theories. Although Medical had no contract
with Valero and Lopez, it alleged they were Southwest’s alter
egos and thus liable for its misconduct. Valero and Lopez moved
for summary judgment or, alternatively, for summary
adjudication on the ground they had no unity of interest with
Southwest. The trial court initially denied that motion but, when
Valero and Lopez renewed it months later, the trial court granted
the renewed motion for summary judgment. Medical appeals,
contending that the trial court had no jurisdiction to grant the
renewed motion and that triable issues of material fact precluded
summary judgment. We affirm.
BACKGROUND
I. The lawsuit
Medical manages personal injury liens for its medical
provider clients. When an uninsured person is injured by a third
party, Medical provides the uninsured person access to medical
providers, who treat the injured person subject to liens to be paid
from any recovery on the underlying personal injury case.
Southwest1 represents plaintiffs in personal injury cases. Valero
and Lopez (collectively, defendants) worked at Southwest.
Although Valero is an attorney, he resigned his license to practice
law in California years ago. Lopez owns Southwest and is also an
attorney. Since 2008, Medical has provided Southwest’s clients
1
Southwest Legal Group is Southwest’s fictitious business
name.
2
access to medical providers willing to treat them pursuant to
medical liens.
Claiming that Southwest failed to pay liens for medical
treatment provided to Southwest’s clients, Medical sued
Southwest in 2014. Medical’s operative second amended
complaint named, among others, Lopez, Valero, and Southwest,
each of whom was alleged to be the alter ego of the other. The
complaint further alleged that Southwest resolved liens without
informing or paying Medical and told medical providers that it
had paid Medical for liens when it had not, thereby insinuating
that Medical was keeping money owed to medical providers.
Using these false statements, Southwest convinced medical
providers to work directly with it and not with Medical. The
complaint further alleged that Southwest received settlement
funds and distributed them to Southwest’s clients without
informing Medical or the medical providers. This allowed
Southwest to withhold funds from its clients under the pretense
the withheld funds would go to pay the liens. Southwest would
then negotiate to pay off the liens for an amount less than it had
withheld from its clients and pocket the difference in addition to
its legal fees.
Medical’s complaint asserted causes of action for breach of
contract, breach of the implied covenant of good faith and fair
dealing, common counts, conversion, intentional and negligent
interference with prospective economic advantage, and
defamation. In the breach of contract and related contractual
causes of action, Medical alleged that Southwest entered into lien
contracts with medical providers, and the contracts were
assigned to Medical. Southwest breached the contracts by failing
to pay the liens. As to the interference with prospective economic
3
advantage causes of action, the complaint alleged that Medical
had prospective relationships with personal injury lawyers and
health-related entities. Southwest interfered with those
relationships by misrepresenting that Medical withheld funds
and persuading medical providers to work directly with
Southwest instead. This allegation also formed the basis for the
defamation cause of action.
II. The first motion for summary judgment
In September 2018, Lopez and Valero moved for summary
judgment or, alternatively, summary adjudication.2 They argued,
among other things, that they were not proper defendants in
their personal capacities because they had no unity of interest
with Southwest.
Valero and Lopez submitted declarations in support of the
motion. Valero declared that although he resigned from
practicing law in California in 1998, he remained licensed in
Texas and still practiced law there. He was Southwest’s office
manager but never had an ownership interest in Southwest and
had never been its officer. He denied ever signing a pleading,
appearing at court, attending a deposition, or filing a lawsuit on a
client’s behalf. Valero also denied ever signing a lien from any
medical provider on Southwest’s behalf, holding himself out to be
personally liable for Southwest’s debts, or personally
guaranteeing a contract. He denied saying or writing anything
negative about Medical or its president to identified medical
providers with whom Medical did business, trying to dissuade the
A year earlier, they had filed a motion for summary
2
judgment which apparently was never heard.
4
doctors from working with Medical or its president, or instructing
Southwest to stop working with them.
Lopez declared that he has been Southwest’s sole owner
since it was formed. He did not commingle funds with
Southwest, and instead maintained a separate bank account,
kept his home and vehicles in his name, and never had
Southwest cosign a loan. Southwest always has been fully
capitalized and never declared bankruptcy. Lopez never held
himself out to be personally liable for any lien or bill from a
medical provider. And, similar to Valero’s declaration, Lopez
denied saying or writing anything negative about Medical or its
president to the doctors or trying to dissuade them from working
with Medical.
Medical opposed the motion and submitted voluminous
exhibits, many of which concerned disciplinary actions against
Lopez in California, Oregon, Nevada, and Arizona. The gist of
Medical’s opposition was its claim that Valero and Lopez,
through Southwest and other law offices, would settle personal
injury cases brought by largely non-English-speaking clients,
present medical liens at full face value to the underlying
defendants’ insurance companies, and deduct liens at their full
face value from the settlement amounts to calculate the amount
they reported as payable to their clients. They then would
negotiate and delay payment to lienholder Medical, and
sometimes misrepresent that a case was still pending when it
had settled.
The trial court found that Valero and Lopez had failed to
meet their summary judgment burden because they failed to
refer to the complaint’s allegations. The trial court asked
rhetorically, what “activities does plaintiff allege the moving
5
parties engaged in, and their relationship to any other entity?
What facts are alleged in support of the ‘alter ego allegations’, if
any? What allegations are the moving parties addressing? The
reader is left in the dark without a book light. [¶] The
declarations submitted in support of the motion can accordingly
only be viewed in a vacuum. It cannot be determined what
allegations they address, and why they are material.”
The trial court also found that moving defendants failed to
demonstrate that Medical had no evidence to establish its causes
of action. It explained, “By virtue of the failure to delineate the
pleadings at issue, and failure to present any evidence of
plaintiff’s inability to produce evidence in support of its
allegations, defendants have not made a prima facie showing that
there are no triable issues of material fact. The Court therefore
need not address the sufficiency of Plaintiff’s evidence; indeed,
Plaintiff has no obligation to present any evidence at all.”
III. The second motion for summary judgment
A. Valero and Lopez’s moving papers
Six months after the trial court denied the first motion for
summary judgment, Lopez and Valero filed a second motion for
summary judgment or, in the alternative, summary adjudication
on the same grounds, i.e., that they were not proper defendants
because they had no unity of interest with Southwest, and there
were no triable issues of material fact as to the causes of action
for interference with prospective economic relationships and for
defamation.
As to the causes of action for interference with prospective
economic relationships, Valero and Lopez asserted that the
doctors had declared that defendants never urged them to stop
6
doing business with Medical, and the doctors never agreed to use
Medical’s services exclusively to factor their medical liens. As to
the defamation cause of action, there was no evidence Lopez said
or wrote anything defamatory.
Valero and Lopez supported the motion with declarations
essentially identical to their earlier ones. Lopez added that
Southwest had been in good standing in California during its
entire existence and that he received a W-2 from Southwest. His
personal accountant had never worked for Southwest, which has
its own accounting service and bookkeeper.
Defendants also submitted declarations from doctors with
whom Medical and Southwest had business relationships. Drs.
Sam Bakshian and Mark Ganjianpour said that Medical factored
liens for their uninsured patients’ hospital bills; however, they
never agreed to use Medical exclusively. Dr. Bakshian did not
believe that Valero, Lopez or anyone else at Southwest had ever
suggested he stop doing business with Medical or do business
directly with Southwest. Dr. Ganjianpour denied having any
such conversations with defendants. Dr. Vatche Cabayan
testified at his deposition that he made the decision not to use
Medical and instead took collections in-house.
In his deposition, Medical’s president admitted that
Medical had no contract with the doctors requiring them to use
Medical to factor all of their hospital bill liens, and the doctors
were free to use whatever company they wanted.
B. Medical’s opposition
Medical submitted an opposition almost identical to the one
it had previously submitted in opposition to the earlier motion for
summary judgment. In it, Medical again depicted Valero and
Lopez as running a multistate personal injury law firm using
7
deceptive practices to deprive lienholders like Medical of funds
due them. In short, Valero and Lopez told clients that the full
face value of medical expenses had to be deducted from any
recovery, but then negotiated discounts from lienholders,
pocketing the savings for themselves.
In its responsive separate statement, Medical primarily
responded to Valero and Lopez’s material facts with “Undisputed
but immaterial” or “Unknown but immaterial.” When Medical
responded that a material fact was undisputed but immaterial, it
would then add the following string of its own facts: Valero and
Lopez formed Southwest; Valero was its agent for service of
process; Lopez was its incorporator; Valero could not hold stock or
be a corporate officer because he was disbarred; Valero managed
and operated Southwest and exercised dominion and control over
it as de facto owner; and Valero was compensated as an owner
based on Southwest’s performance. String citations to evidence
followed the string of facts.
When Medical responded that the material fact was
unknown but immaterial, Medical then stated the following facts:
Lopez was the sole stockholder and officer and manager of a law
firm with operations in three other states in which he is not
licensed; Valero, as de facto owner, operated a multistate law
firm in four states in which he is not licensed; and defendants
were using Southwest to perpetrate a fraud and injustice such
that they are personally liable.
Medical clearly disputed just one material fact. It
disagreed that Lopez signed only one lien in his capacity as
Southwest’s employee. But Medical did not cite evidence to
support its disagreement.
8
C. The trial court’s ruling
After describing the evidence in the moving and opposing
papers, the trial court began its analysis by finding that errors in
Medical’s responsive separate statement rendered it “effectively
useless.” By responding “unknown,” Medical violated Code of
Civil Procedure3 section 437c and California Rules of Court, rule
3.1350, and made it impossible to determine whether facts were
in dispute. Also, Medical responded to most material facts with
argument—not facts—followed by long string citations. The trial
court could not ascertain what evidence and arguments
corresponded and whether any evidence in the string citations
put the alleged facts in dispute. Also, Medical’s “essential
directive” to the trial court to review 1,000 pages of submitted
evidence was improper, as the trial court was not required to
consider evidence outside the separate statement. The trial court
therefore exercised its discretion to disregard Medical’s separate
statement.
The trial court thus turned to the merits of the alter ego
theory alleged against Valero and Lopez. Citing primarily
Valero’s and Lopez’s declarations, the trial court found they had
met their moving burden of showing they did not have a unity of
interest with Southwest. The trial court found no reason to hold
Valero or Lopez liable on any cause of action, as no cause of
action referenced Valero and Lopez individually, and instead all
referred to Southwest’s liability. The trial court therefore
granted summary judgment in Valero and Lopez’s favor.
This timely appeal followed.
3All further undesignated statutory references are to the
Code of Civil Procedure.
9
DISCUSSION
I. Procedural issues
The parties each assert this appeal is procedurally barred.
Lopez and Valero contend the appeal must be dismissed, while
Medical contends that the trial court lacked jurisdiction to hear
the second motion for summary judgment. We reject both
assertions.
A. Appealability
Lopez and Valero contend there is no appealable final
judgment because the case remains pending as to Southwest.
However, the trial court entered an order granting Valero and
Lopez’s motion for summary judgment and dismissed them. Such
an order in a multiparty action that leaves no issue remaining to
be resolved as to a party is final as to that party and appealable.
(Justus v. Atchison (1977) 19 Cal.3d 564, 567–568.) The appeal is
properly before us.
B. The trial court’s authority to consider the second motion
for summary judgment
Medical argues that the trial court lacked jurisdiction to
hear the second motion for summary judgment under section
437c, subdivision (f)(2). That section provides, “A party shall not
move for summary judgment based on issues asserted in a prior
motion for summary adjudication and denied by the court unless
that party establishes, to the satisfaction of the court, newly
discovered facts or circumstances or a change of law supporting
the issues reasserted in the summary judgment motion.” (§ 437c,
subd. (f)(2).)
10
Le Francois v. Goel (2005) 35 Cal.4th 1094 (Le Francois)
describes how section 437c, subdivision (f)(2), should be applied.
In Le Francois, the defendants moved for summary judgment or,
alternatively, summary adjudication. The trial court found a
triable issue of material fact and denied the motion. (Id. at p.
1097.) A year later, the defendants filed a second motion for
summary judgment based on the same grounds as the first
motion. The plaintiffs objected under section 437c, subdivision
(f)(2). The motion was transferred to a new judge, who granted
it. On review, the California Supreme Court acknowledged that
section 437c, subdivision (f)(2), and its counterpart governing
motions for reconsideration, section 1008,4 limit parties’ ability to
file repetitive motions. (Le Francois, at p. 1104.) The sections
thus prohibit a party from making, and the trial court from
granting, a motion for reconsideration unless the requirements of
sections 437c, subdivision (f)(2), or 1008 are satisfied.
(Le Francois, at p. 1108.) However, the statutes do not limit a
trial court’s inherent authority to reconsider a prior interim order
on its own motion. (Ibid.; accord, Marshall v. County of San
Diego (2015) 238 Cal.App.4th 1095, 1104.) If a trial court
believes it should reconsider a prior order, then the trial court
should inform the parties of its concern, solicit briefing, and hold
a hearing. (Le Francois, at p. 1108.)
In Le Francois, the trial court did not act pursuant to its
inherent authority but in response to a second motion for
summary judgment that did not satisfy the requirements of
section 437c, subdivision (f)(2); that is, the motion was not based
4
Section 1008, subdivision (a), allows a party to move for
reconsideration of a prior order based on new or different facts or
a change in law.
11
on newly discovered facts, circumstances or a change of law. The
Supreme Court held that the trial court therefore erred in
granting the motion. It remanded the case to the trial court with
the direction that it could reconsider its prior ruling on its own
motion.5 (Le Francois, supra, 35 Cal.4th at p. 1109.)
We review a trial court’s decision to allow a party to file a
renewed or subsequent motion for summary judgment for abuse
of discretion. (Nieto v. Blue Shield of California Life & Health
Ins. Co. (2010) 181 Cal.App.4th 60, 72.)
Here, the trial court did not err in considering the motion
for summary judgment. First, Medical did not raise an objection
based on section 437c, subdivision (f)(2), in the trial court, and
instead cited it for the first time on appeal. Failure to raise an
issue in the trial court forfeits the claim on appeal. (K.C.
Multimedia, Inc. v. Bank of America Technology & Operations,
Inc. (2009) 171 Cal.App.4th 939, 949–950.) Had the parties
raised this objection in the trial court, the trial court could have
addressed the issue; therefore, we find the issue was forfeited.
Nonetheless, even if we consider the merits of Medical’s
arguments, we discern no abuse of discretion. Even though the
second motion did not raise any newly discovered facts,
circumstances or a change of law, section 437c, subdivision (f)(2),
did not preclude the renewed motion. The trial court here denied
the first motion for a procedural reason: the motion failed to
specifically address the allegations in the complaint. As a result,
the trial court never reached the merits of the first motion. In
5
One justice agreed that the trial court erred but would
have affirmed the judgment because the error did not result in a
miscarriage of justice. (Le Francois, supra, 35 Cal.App.4th at
pp. 1109–1110 (conc. & dis. opn. of Kennard, J.).)
12
essence, the trial court in making its ruling directed the parties
how to cure the deficiencies in its motion. Because the second
motion did refer to the allegations in the complaint, the trial
court apparently believed that the perceived procedural defects in
the first motion had been cured so that it could now reach the
motion’s merits. Thus, where, as here, the first denial was not
merits-based, the concerns underlying section 437c, subdivision
(f)(2), regarding repetitive meritless motions are not implicated.
The trial court could exercise its inherent discretion to hear the
renewed motion, this time on the merits, even though the second
motion did not present newly discovered facts, circumstances or a
change of law. Also, Medical had adequate notice and
opportunity to oppose the renewed motion. (See, e.g., Abassi v.
Welke (2004) 118 Cal.App.4th 1353, 1360 [trial court invited
renewed motion and all parties had opportunity for briefing].)
The trial court therefore did not abuse its discretion to consider
the renewed motion.
We now turn to the merits of the renewed motion,
beginning with the standard of review.
II. Standard of review
A motion for summary judgment shall be granted if the
papers show that there is no triable issue of material fact and the
moving party is entitled to judgment as a matter of law. (§ 437c,
subd. (c).) A defendant meets its burden in moving for summary
judgment by showing that one or more essential elements of the
cause of action cannot be established, or there is a complete
defense thereto. (§ 437c, subd. (p)(2); Aguilar v. Atlantic
Richfield Co. (2001) 25 Cal.4th 826, 849.) A defendant has shown
that the plaintiff cannot establish at least one element of the
cause of action “by showing that the plaintiff does not possess,
13
and cannot reasonably obtain, needed evidence.” (Aguilar, at
p. 854.) Once the moving defendant has met its initial burden,
the burden shifts to the plaintiff to show that a triable issue of
one or more material facts exists as to that cause of action or
defense. (Id. at p. 849.)
A plaintiff cannot defeat the motion with mere allegations
or arguments but must instead set forth specific facts supported
by admissible evidence showing a triable issue of material fact.
Papers opposing a summary judgment motion must include a
separate statement that (1) indicates whether the opposing party
agrees or disagrees with the moving party’s assertion that
specific material facts are undisputed, (2) sets forth plainly and
concisely any other material facts the opposing party contends
are disputed, and (3) refers to the supporting evidence for each
contention. (§ 437c, subd. (b)(3); Cal. Rules of Court, rule
3.1350(f) [content of separate statement] & (h) [format example].)
Failure to comply with the requirement of a separate statement
may, in the trial court’s discretion, constitute a sufficient ground
for granting the motion. (§ 437c, subd. (b)(3); see also Kojababian
v. Genuine Home Loans, Inc. (2009) 174 Cal.App.4th 408, 416.)
However, a trial court may not grant the motion without first
determining that the moving party has met its initial burden of
proof. (Kojababian, at p. 416.) Only if the burden has shifted
may a trial court find that the opposing party has not satisfied its
burden of production to show a triable issue of fact by virtue of a
deficient separate statement. (Ibid.)
We review an order granting summary judgment de novo,
considering all the evidence in the moving and opposing papers
except that to which objections have been sustained. (Sakai v.
Massco Investments, LLC (2018) 20 Cal.App.5th 1178, 1183.) We
14
view the evidence in a light favorable to the plaintiff as the losing
party, liberally construing its evidentiary submission while
strictly scrutinizing the defendants’ showing, and resolve any
evidentiary doubts or ambiguities in the plaintiff’s favor. (Ibid.)
III. Alter ego liability
The trial court found that Valero and Lopez met their
moving burden of showing there was no triable issue of material
fact as to whether they were Southwest’s alter egos, and Medical
had not met its opposing burden because it submitted a deficient
responsive separate statement, which the trial court exercised its
discretion to disregard under section 437c, subdivision (b). As we
now explain, we agree that defendants met their moving burden
but that Medical did not meet its opposing one.
The alter ego doctrine is designed to prevent individuals or
corporations from misusing corporate laws by forming or using a
corporate entity to commit fraud or other misdeeds. (Sonora
Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538
(Sonora).) “Alter ego is an extreme remedy, sparingly used.”
(Id. at p. 539.) It will be invoked if two conditions are met. First,
there must be such a unity of interest and ownership between the
corporation and its equitable owner that their separate
personalities do not in reality exist. (Id. at p. 538.) Second, there
must be an inequitable result if the acts in question are treated
as those of the corporation alone. (Ibid.) To determine whether
there is sufficient unity of interest, factors to consider are
commingling of funds and assets, the holding out by one entity
that it is liable for the other’s debts, identical equitable
ownership in the two entities, use of the same offices and
employees, use of one as a mere shell or conduit for the affairs of
the other, inadequate capitalization, disregard of corporate
15
formalities, failure to segregate corporate records, and identical
directors and officers. (Id. at pp. 538–539; Associated Vendors,
Inc. v. Oakland Meat Co. (1962) 210 Cal.App.2d 825, 842.) No
one characteristic governs, and courts must look at all the
circumstances to determine whether to apply the doctrine.
(Sonora, at p. 539; Zoran Corp. v. Chen (2010) 185 Cal.App.4th
799, 811.)
Before we examine these factors, it is first helpful to frame
Medical’s argument. As we understand it, Medical’s contention
that Valero and Lopez are Southwest’s alter egos—and, as such,
liable on all causes of action—hinges on Valero’s and Lopez’s
alleged violations of laws governing attorneys. The theory
appears to be that defendants’ legal malpractice and disregard of
rules governing attorneys compels an alter ego finding. Medical,
however, cites no authority for this novel application of the alter
ego doctrine. While the alter ego doctrine is certainly a vehicle to
prevent individuals from hiding behind a corporate entity to
commit fraud, Medical provides no authority to suggest it is
applicable to the situation here. (See, e.g., Sonora, supra,
83 Cal.App.4th at p. 539 [alter ego doctrine is not a tool for every
unsatisfied corporate creditor to use to recover debt].) When a
party pursues the alter ego doctrine, the party must address and
satisfy the first condition of that doctrine, unity of interest, by
establishing the relevant factors. A party cannot, as Medical
attempts to do, persuasively claim those factors are immaterial.
Turning to those factors, the trial court found that Valero
and Lopez met their moving burden of establishing they did not
have a unity of interest with Southwest. The material facts
presented were: Valero had no ownership interest in Southwest
and had never been its corporate officer; Lopez never commingled
16
funds with Southwest and instead maintained separate bank
accounts; Lopez received a salary from Southwest; Southwest
never cosigned a loan for Lopez; Lopez’s cars and house are in his
name; Lopez and Southwest use different accountants; Southwest
has never been undercapitalized or declared bankruptcy; and
neither Valero nor Lopez has held himself out to be personally
liable for or personally guaranteed any lien owed by Southwest.
Valero’s and Lopez’s declarations supported these material facts.
As the trial court found, this evidence was sufficient to meet
defendants’ moving burden of showing they did not have a unity
of interest with Southwest. (See generally Sonora, supra, 83
Cal.App.4th at pp. 538–539.) The burden therefore shifted to
Medical.
The trial court concluded that Medical submitted a
deficient responsive separate statement. A proper separate
statement affords due process to opposing parties and permits
trial courts to expeditiously review complex motions for summary
judgment so that they may efficiently determine whether
material facts are disputed. (Whitehead v. Habig (2008) 163
Cal.App.4th 896, 902.) Where Medical’s statement fell
particularly short of meeting that purpose was in its attempt to
state additional material facts. Medical did not set its material
facts apart in a separate section. Worse, Medical’s string of facts
was followed by a long string of cites to the voluminous record.
As the trial court said, it was impossible to tell what evidence
corresponded to what material fact. It was not the trial court’s
job to piece together the separate statement to make that
determination. (See Mills v. Forestex Co. (2003) 108 Cal.App.4th
625, 640–641.) A trial court cannot be forced to wade through
stacks of documents to determine what evidence is admitted and
17
what remains at issue. (Collins v. Hertz Corp. (2006) 144
Cal.App.4th 64, 72; San Diego Watercrafts, Inc. v. Wells Fargo
Bank (2002) 102 Cal.App.4th 308, 316 [trial court need not
consider unreferenced evidence hidden in voluminous record].)
We therefore sympathize with the trial court’s decision here to
disregard Medical’s responsive separate statement.
However, without deciding whether the trial court abused
its discretion by disregarding Medical’s separate statement, we
consider it on our de novo review. We begin by noting that
Medical conceded almost all of the moving undisputed material
facts. That is, Medical either did not dispute material facts or
responded “unknown” to them. Responding “unknown” at the
summary judgment stage of proceedings, where discovery has
taken place and there is no claim that further discovery is
necessary, is tantamount to a failure to dispute the material
fact.6 (See § 437c, subd. (b)(3) [opposing statement must agree or
disagree with material facts].) Therefore, Medical failed to
dispute the material facts showing that Valero and Lopez were
not Southwest’s alter ego.
We therefore turn to whether the additional material facts
Medical attempted to assert raised a triable issue of material fact
as to alter ego. Medical asserted that Valero used to be
Southwest’s agent for service of process and that Lopez
incorporated Southwest. Neither fact, alone or together,
establishes alter ego. It is hardly surprising that an office
manager is a company’s agent for service of process and that
Lopez incorporated his own law firm.
6
Medical alludes to a petition for writ of mandate it filed in
this court regarding the trial court’s orders on discovery disputes.
We denied the petition, and no discovery issue is before us.
18
Next, Medical stated that Valero could not hold stock or be
an officer of the firm because he was disbarred. These mere
observations are not particularly revelatory in the absence of
evidence Valero owned stock in Southwest or was its officer. As
to the latter point, Medical did not dispute that Valero has never
been an officer of Southwest. The point of these observations is
therefore unclear.
Next, Medical asserts that Valero was compensated based
on Southwest’s performance, which Medical says is how owners
are usually compensated. However, from what we can discern,
Lopez testified that Valero received a salary and a bonus based
on the firm’s performance. It is unclear how tying a bonus into
company performance shows alter ego.
Medical then generally asserted that Valero managed and
operated Southwest and had such control over it that he was a
de facto owner. To the trial court, and to us, this is argument or
a legal conclusion to be drawn from the evidence rather than a
proper responsive material fact. Medical should have cited facts
to support this conclusion. Moreover, the evidence that appears
to be cited to support this “fact” merely shows that Valero
engaged in activities consistent with being an officer manager:
advertising, marketing, helping with hiring, and supervising
nonlitigation employees.
Other evidence Medical cited is also not indicative of alter
ego. Medical states that Valero’s family trust owned the property
where Southwest’s office was located, and some of his relatives
worked at the firm. Something more than this is required to
show alter ego. In Eleanor Licensing LLC v. Classic Recreations
LLC (2018) 21 Cal.App.5th 599, 615, for example, the individual
co-owner of the corporate defendants said that he and the
19
corporations were one and the same, and he personally agreed to
honor an agreement. The trial court found that this evidence was
sufficient to show a unity of interest between the individual
owners and their companies, but the Court of Appeal disagreed.
That the co-owners of the closely held family businesses were
authorized to make all decisions in no way indicated “any
commingling of personal and corporate assets, use of corporate
assets for personal purposes, gross undercapitalization of the
corporate entities, disregard of corporate formalities or any other
of the many circumstances that might support the conclusion
that no separation actually existed between these two individuals
and the two corporate entities.” (Id. at p. 616.) Similarly, Valero
may be Southwest’s landlord, but this fact does not otherwise
show, for example, that he has commingled assets or disregarded
corporate formalities.
Next, a considerable portion of Medical’s evidence was
directed at showing that Valero, who was not licensed to practice
law in California, illegally controlled Southwest (see, e.g., Bus.
& Prof. Code, § 6165 [each director, shareholder, officer of law
corporation shall be a licensed person]) and that he and Lopez
were otherwise committing malpractice. To these points, Medical
submitted evidence showing that Valero and Lopez have been
disciplined in other states, sometimes for conduct similar to the
conduct alleged here. Valero represented in social media and on
Southwest’s website that he is one of its attorneys.7 Also, an
attorney who had worked at Southwest testified that Valero was
“actively involved” with clients, although the attorney did not
elaborate. Another former employee thought that Valero was a
7
Medical fails to point out that Southwest’s website states
that Valero is not licensed in California.
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part owner of Southwest because she reported to and discussed
cases with him. Valero and Lopez also sometimes discussed
cases, and Valero acted as a go-between with medical providers,
but he never suggested what Lopez should demand for a case.
Finally, Southwest has been holding settlement funds in trust, in
one case for five years.
As we have said, this evidence may be relevant to a theory
that defendants have committed malpractice or otherwise
violated their ethical duties. But they do not show that
defendants are Southwest’s alter egos. Disregard of laws
governing the practice of law is not tantamount to disregard of
corporate formalities for the purpose of applying the alter ego
doctrine. Whatever the merits of Medical’s contention that
Valero and Lopez committed legal malpractice or otherwise
violated the rules of professional conduct, Medical has cited no
authority holding that such conduct is a conduit to apply the alter
ego doctrine.8 If Valero and Lopez are personally liable in some
way to Medical, it is not via that doctrine.
IV. The intentional and negligent interference with prospective
economic advantage and defamation causes of action
The trial court found that Medical’s inability to raise a
triable issue of material fact as to the alter ego issue was fatal to
all causes of action, because no cause of action referenced Valero
and Lopez specifically but instead referred only to Southwest.
We agree that Medical never alleged any specific acts Valero and
Lopez personally committed to show their personal liability on
the tort-based causes of action, i.e., interference with prospective
8
We express no opinion whether Medical’s evidence shows
that defendants have committed malpractice.
21
economic advantage and defamation. Moreover, Medical does not
address these causes of action in its briefs on appeal, other than
peripherally in the context of the alter ego doctrine. Therefore,
any other contention that might be made as to these causes of
action has been abandoned. (Landry v. Berryessa Union School
Dist. (1995) 39 Cal.App.4th 691, 699–700 [issue not supported by
pertinent or cognizable legal argument may be deemed
abandoned].)
DISPOSITION
The judgment is affirmed. Gelly Valero and Anthony Lopez
may recover their costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL
REPORTS
EDMON, P. J.
We concur:
LAVIN, J.
EGERTON, J.
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