Opinion
NOT TO BE PUBLISHED
Appeal from a judgment and postjudgment orders of the Superior Court of Orange County, Franz Miller, Judge.
Boudreau Williams and Jon R. Williams for Defendants, Cross-complainants and Appellants.
Benedon & Serline, Douglas G. Benedon, Gerald M. Serline, and Peter Polos for Plaintiff, Cross-defendant and Appellant.
IKOLA, J.
Defendants and cross-complainants Titan Electric Corporation (Titan), John Nelson (Nelson) and Maria Nelson appeal from a judgment for plaintiff and cross-defendant Kemp Bros. Construction, Inc. (Kemp). The jury found Titan, an electrical subcontractor, had breached its contracts with Kemp, the general contractor on two school construction projects.
Titan asserts two claims. It contends the court misconstrued the contracts’ “notice and cure” provisions whereby Kemp agreed to notify Titan 48 hours before terminating it for any breach by Titan. Titan further contends the court wrongly instructed the jury by refusing to give its special jury instructions on strict compliance and contract modification, and giving confusing instructions on quantum meruit.
The court did not misconstrue the contracts. Instead, the court merely submitted to the jury the issue of whether Kemp had substantially complied with its contractual obligations, including the notice and cure provisions. The jury expressly found Kemp had done so. And substantial evidence supports that finding.
And the court properly instructed the jury. First, Titan’s proposed instruction on strict compliance was an argumentative, “formula” instruction that required the jury to find for Titan if certain facts were true. Second, Titan’s proposed instruction on contract modification misleadingly suggested any oral modification to a written contract provides its own consideration. Third, the quantum meruit instructions in the record were correct, and those omitted from the record presumably cured any error.
Kemp cross-appeals from the judgment, challenging the court’s failure to impose alter ego liability upon the Nelsons for Titan’s acts. Substantial evidence supports the court’s finding that the Nelsons operated Titan as a distinct entity with a separate corporate existence. Accordingly, we affirm the judgment in its entirety.
We affirm posttrial attorney fees orders for Kemp on its claims against Titan, and for the Nelsons on the alter ego claims. These orders were challenged only on the grounds the underlying judgment (for Kemp; for the Nelsons) must be reversed.
FACTS
The Subcontracts
Kemp was the prime contractor on two Los Angeles Unified School District (the District) construction projects: Huntington Park Elementary School (Huntington Park) and the Los Angeles Center for Enriched Studies (LACES). Kemp retained Titan as the electrical subcontractor on these projects in April 2003.
Titan agreed to use enough workers to complete the jobs on time. The subcontracts required Titan to “furnish all labor, materials, equipment and other facilities required to perform the [electrical] work” on the projects. They also obligated Titan to “provide adequate manpower... to diligently prosecute [its] work to comply with the project schedule.”
Kemp agreed in “notice and cure” clauses to give written notice to Titan 48 hours before terminating the subcontracts for Titan’s breach. Each subcontract provided: “14.1.2 Notice to Cure. If [Titan] at any time refuses or neglects to supply enough properly skilled workers and proper materials, or fails to properly and diligently prosecute the work covered by this Agreement, or fails to make prompt payment to its workers, sub-contractors or suppliers... or is otherwise guilty of a material breach of a provision of this Agreement, and fails within forty-eight (48) hours after receipt of written notice to commence and continue satisfactory correction of such default with diligence and promptness, then [Kemp], without prejudice to any rights or remedies, shall have the right to any or all of the following remedies: [¶] (a) supply such number of workers and quantity of materials, equipment and other facilities as [Kemp] deems necessary.... [¶] (b) contract with one or more additional contractors to perform such part of [Titan’s] work as [Kemp] shall determine will provide the most expeditious completion of the total work and charge the cost thereof to [Titan].”
Similarly, the subcontracts set forth procedures for Kemp to terminate Titan. Each provided: “14.1.3. Termination for Default. If [Titan] fails to commence and satisfactorily continue correction of a default within forty-eight (48) hours after receipt by [Titan] of the notice issued under Section 14.1.2, then [Kemp] may terminate [Titan’s] right to perform under this Agreement....”
Titan’s Work
Titan’s vice-president for field operations worried about Titan’s ability to complete the jobs. He realized in the spring of 2003 that Titan had been underestimating its bids on various projects at the same time it was trying to reduce its staffing. The vice-president had urged John Nelson, Titan’s president, not to take on additional work like the two Kemp projects because Titan could not provide adequate manpower to complete the jobs on time. After Titan had signed the subcontracts, the vice-president and Titan’s foreman for the Huntington Park project discovered Titan had underbid that job too. The vice president and the foreman each quit Titan the same week. The vice-president concluded Titan was “getting more work and [Nelson] wanted to cut manpower and there was just no way that we could operate the way he was planning to operate.”
By June 2003, the new foreman for the Huntington Park job thought he had “inherited... a big mess.” The project was “behind right from the start.” From then on, “we were always behind.” There was “not enough manpower”; “I asked for it. Didn’t get it.” He only stopped “asking for more guys” “at the end of the job when [he] wished most of them would go away.” Titan could get only “the bottom of the barrel” from the electrician’s union.
Kemp worried about Titan’s performance, too. Kemp sent “seven or eight” letters to Titan from May 2003 to January 2004 asking it to use more workers on the Huntington Park job to keep on schedule. At Titan’s request in January 2004, Kemp temporarily began advancing funds to Titan so it could hire more workers and meet its weekly payroll. In the following weeks, Kemp advanced $371,000 to Titan. Even so, Titan continued to under staff and fall behind.
Kemp, concerned Titan was hopelessly overextended, withheld an advance and asked Titan for a cash flow analysis on April 28, 2004. Kemp wanted to ensure Titan would be able to complete the Huntington Park project and reimburse Kemp for its prior advances. Titan faxed over documents showing it expected to lose money on the project. Kemp called Nelson and suggested Titan use money set aside for end-of-the-month payroll taxes to cover the week’s payroll. Nelson replied, “‘the money is already gone.’” Nelson told Kemp that Titan needed the advance that day or it would “pull off” the job. Later, Kemp called back Titan and announced it would not make the advance.
The next day, April 29, Titan sent no workers to the Huntington Park or LACES sites. When Kemp called Titan to see if its workers would show up, a Titan officer stated, “‘No. We’re winding down operations. We’re done.” The officer told Kemp it could come to Titan’s warehouse and pick up the project materials.
Titan workers began showing up at the job sites that day, but not to work — they were looking for their paychecks. To meet union regulations, Kemp arranged for another subcontractor, A&R Electric, to pay Titan’s workers their back wages. A&R Electric also agreed to provide temporary assistance on the electrical work on a “time and materials” basis, not by subcontract. By the afternoon, the now-paid Titan workers and A&R electricians resumed work on the projects. Meanwhile, Kemp faxed a letters to the union stating it had “hired... A & R Electric to replace Titan Electric.” “We have instructed A & R Electric to cover the payroll of Titan for the period of April 19 through 23, for the... project.” Kemp also faxed a written request to the District to substitute A&R Electric for Titan. Kemp faxed copies of these letters to Titan.
On April 30, Kemp sent two “notice to cure” letters to Titan concerning the Huntington Park and LACES projects. Each letter provided: “On April 28, 2004, Titan Electric advised Kemp Bros. that it was abandoning the referenced project due to its inability to pay its electrical employees working on the project. [¶] As a result of Titan Electric’s actions, you are hereby given notice to cure this condition within forty-eight (48) hours from the time of abandonment in accordance with your Subcontract Agreement.... Failure to cure this condition will result in immediate termination and substitution.”
Kemp would have allowed Titan to resume working on the projects after April 30 — it hoped Titan would return. But Titan did not respond to the letters. It did not dispute its repudiation. It did not claim Kemp was preventing it from working on the projects. It did not state it wanted to work. And it did not send workers to the jobsites. Kemp did not hear from Titan until May 5, when Titan asked for an administrative hearing with the District to determine the propriety of the substitution. The District later approved the substitution retroactively — a procedure held to be in substantial compliance with public contracting statutes. (Titan Electric Corp. v. Los Angeles Unified School Dist. (2008) 160 Cal.App.4th 188, 205-208.)
After the hearing but before the appeal was decided, we held the hearing officer’s decision approving the substitution was not collateral estoppel on the issue of whether Titan breached the subcontract. (Kemp Bros. Construction Inc. v. Titan Electric Corp. (2007) 146 Cal.App.4th 1474, 1483-1484 [reversing order granting writ of attachment to Kemp].) The hearing decided whether Kemp complied with public contracting statutes when it substituted Titan. The issue here is whether Kemp may recover breach of contract damages from Titan.
The Litigation
Kemp filed this suit against Titan, asserting causes of action including breach of contract. Titan filed a cross-complaint against Kemp, asserting causes of action including breach of contract, conversion, and quantum meruit.
Other claims among Kemp, Titan, and other parties are not at issue here.
After a six month trial, the jury awarded over $1.1 million to Kemp on its breach of contract cause of action arising from the Huntington Park project. It awarded over $650,000 to Kemp on its breach of contract cause of action arising from the LACES project. Notably, the jury expressly found Kemp had done “all, or substantially all of the significant things that the... subcontract required it to do” for each project. It also found the parties agreed to modify the Huntington Park subcontract, but the modification was not supported by consideration.
And the jury found for Kemp on Titan’s breach of contract causes of action. It found Kemp had not breached the LACES subcontract. And although the jury found Kemp made two late progress payments to Titan on the Huntington Park job, it also found Titan had not done “all, or substantially all, of the significant things that the Huntington Park subcontract required it to do.” The jury found Kemp converted some of Titan’s tools, awarding Titan less than $38,000. And on Titan’s quantum meruit claims, the jury found Titan had not performed any services not required by the subcontracts.
After the jury trial, the court tried the remaining equitable issues, including Kemp’s alter ego claim against the Nelsons. The court found the Nelsons were not Titan’s alter egos. It further found the two late progress payments were unfair business practices and awarded restitution to Titan of $28. Posttrial, the court awarded to Kemp its attorney fees incurred in litigating against Titan, and awarded to the Nelsons their attorney fees incurred in defending against the alter ego claim. Final judgment for Kemp and against Titan was entered for over $3 million, and for the Nelsons and against Kemp for just under $75,000.
DISCUSSION
The Court Properly Submitted the Contract Claims to the Jury, Whose Findings Are Supported by Substantial Evidence
Titan challenges the judgment against it on Kemp’s breach of contract causes of action. It does not dispute the parties entered into enforceable subcontracts. Nor does Titan dispute it breached the subcontracts and injured Kemp.
Titan instead maintains only that the court misconstrued the subcontracts to relieve Kemp from complying with the notice and cure requirements. This claim is puzzling at first. The terms of the notice and cure clauses are plain and neither party introduced extrinsic evidence on their meaning. And Titan does not specify how the court construed the clauses or what different meaning it should have given them.
The true nature of Titan’s contention is revealed in its reply brief. Titan states, “what those ‘notice and cure’ provisions meant — and how they operated — was not a factual dispute for the jury to decide, but was a legal issue solely for the trial court. Consequently, the trial court erred as a matter of law when it failed to interpret those provisions and apply them to Kemp. Had it done so, it would have properly found that as a matter of law, Titan was entitled to a directed verdict on Kemp’s breach of contract claim.”
Thus, Titan’s real dispute is with the court’s decision to submit Kemp’s contract claim to the jury. To be sure, contract interpretation, in the absence of conflicting extrinsic evidence, is a legal issue for the court. But whether Kemp complied with the notice and cure requirement is not. What the parties did, and whether their actions satisfied contract terms, are questions of fact for the jury. The jury resolves the factual issues of whether a party substantially performed a condition precedent, whether any breach was material, and whether a party repudiated the contract. (See, e.g., Cline v. Yamaga (1979) 97 Cal.App.3d 239, 248 [substantial performance]; Brown v. Watt (1967) 256 Cal.App.2d 44, 48 [condition precedent]; Porter v. Arthur Murray, Inc. (1967) 249 Cal.App.2d 410, 421 [materiality]; Singh v. Burkhart (1963) 218 Cal.App.2d 285, 293 (Singh) [repudiation].)
The court did not misconstrue the subcontracts by submitting factual issues concerning Kemp’s breach of contract claim to the jury — as it must. (Code Civ. Proc., § 592 [right to jury trial in contract action].) It properly let the jury find whether Kemp substantially complied with its contractual obligations, whether any breach on Kemp’s part was immaterial, and whether Titan had repudiated the subcontracts.
And the jury’s express findings on those issues are sufficiently supported by the record. Substantial evidence shows Kemp did “all, or substantially all of the significant things” it was required to do under the subcontracts.
First, the jury reasonably could have found Titan had repudiated the subcontracts by telling Kemp on April 28 and 29 that Titan was going to “pull off the job” and start “winding down operations.” Titan’s repudiation excuses Kemp from all of its contract duties, including the notice and cure provision. “[I]f one party notifies the other, before the latter is in default, that he will not perform the contract on his part, the other party may enforce the contract without previously performing conditions in favor of the party giving such notice of nonperformance.” (Singh, supra, 218 Cal.App.2d at pp. 292-293.)
Second, the jury reasonably could have found Kemp substantially complied with the notice and cure provisions. Kemp sent the notice and cure letters to Titan on April 30, 2004. While Kemp had already hired A&R Electric to pay Titan’s workers their back wages and keep the projects running, Kemp did so on a “time and materials” basis — not with a new subcontract. Kemp’s representatives testified it would have discharged A&R Electric and welcomed Titan back had Titan returned to the jobs. Instead, Titan did nothing until May 5. The jury could have credited this testimony and found Kemp gave Titan at least 48 hours to return to work after April 30; Titan simply chose not to come back.
Third, the jury reasonably could have found any failure by Kemp to comply with the notice and cure provisions was immaterial. It could have inferred Titan would have stopped working on both projects once Kemp stopped making payroll advances on the Huntington Park project, regardless of how much notice Kemp may have given Titan.
Titan’s primary response, besides denying Kemp’s right to a jury trial, is to reargue the evidence. Titan notes Nelson denied telling Kemp on April 28 that Titan was going to quit any project. Nelson also testified Kemp prevented Titan on April 29 from returning to the job by bringing in A&R Electric, hiring away Titan’s workers, and locking up its tools. — all before Kemp sent the April 30 letters purporting to give Titan 48 hours to cure as of April 28. But the jury was free to discredit Nelson’s denial, reject his conclusions, and credit the contrary evidence offered by Kemp — including Titan’s failure to show up for either job on April 29, the statements that Titan was “winding down operations” and returning the job materials, and Titan’s ensuing inactivity. “‘It is not our task to weigh conflicts and disputes in the evidence; that is the province of the trier of fact. Our authority begins and ends with a determination as to whether, on the entire record, there is any substantial evidence, contradicted or uncontradicted, in support of the judgment.’” (ASP Properties Group, L.P. v. Fard, Inc. (2005) 133 Cal.App.4th 1257, 1266 (ASP Properties).)
Titan also contends its repudiation would not excuse Kemp from complying with the notice and cure provision. It notes the subcontracts required Kemp to provide 48 hours notice to Titan before terminating it for “refus[ing]” to provide adequate workers. Titan concludes the subcontracts contemplated Kemp providing notice even if Titan repudiated. Even so, once Titan repudiated the subcontracts, Kemp was relieved from performing its contractual duties— even its duties to notify Titan. (See Singh, supra, 218 Cal.App.2d at pp. 292-293.)
The Court Properly Instructed the Jury
Titan contends the court wrongly instructed the jury in three ways. First, the court refused Titan’s proposed special instruction directing the jury to find for Titan if it found Kemp failed to strictly comply with the notice and cure provisions. Second, the court refused Titan’s proposed special instruction informing the jury that the consideration needed to support an oral modification of a written contract (i.e., Kemp’s agreement to advance payroll funds to Titan) can consist of the modification itself. Third, the court gave (arguably) confusing responses to jury questions on the quantum meruit instructions.
As for the two refused special instructions: “A party is entitled to an instruction on each theory of the case that is supported by the pleadings and substantial evidence if the party requests a proper instruction. [Citations.] A court may refuse a proposed instruction that incorrectly states the law or is argumentative, misleading, or incomprehensible to the average juror, and ordinarily has no duty to modify a proposed instruction. [Citations.] A court may refuse a proposed instruction if other instructions given adequately cover the legal point.” (Bullock v. Philip Morris USA, Inc. (2008) 159 Cal.App.4th 655, 684-685 (Bullock).) “An appealed judgment or challenged ruling is presumed correct.” “Accordingly, we cannot conclude that the refusal to give an instruction was error absent an adequate showing that the proposed instruction was proper.” (Id. at p. 685.) “‘“A party may not complain of the trial court’s refusal to give an instruction unless... it is not objectionable upon any grounds.”’” (Starr v. Mooslin (1971) 14 Cal.App.3d 988, 1001.) And in general, “we affirm the rulings of the trial court if they are correct on any ground.” (G.R. v. Intelligator (2010) 185 Cal.App.4th 606, 622.)
And as for the instructions given on quantum meruit: “An appellant has the burden to provide a record sufficient to support its claim of error. [Citation.] Absent an indication in the record that an error occurred, we must presume that there was no error. [Citations.] An appellant arguing instructional error must ensure that the appellate record includes the instructions given and refused and the court’s rulings on proposed instructions. [Citations.] If the record does not show which party requested an erroneous instruction, the reviewing court must presume that the appellant requested the instruction and therefore cannot complain of error.” (Bullock, supra, 159 Cal.App.4th at p. 678.)
We turn now to Titan’s claims of instructional error.
Strict Compliance. First, the court properly declined to give Titan’s proposed instruction on strictly construing the notice and cure provisions as forfeiture clauses. The instruction described Titan’s claim that Kemp violated those provisions and asked it to “determine whether Kemp strictly complied with” the provisions. It also directed the jury: “If you find that Kemp did not strictly comply with the notice and opportunity to cure provisions, you must find that Kemp breached its contracts with Titan.”
Titan’s proposed jury instruction provided in full: “Titan claims that one way in which Kemp breached its contracts with Titan is by failing to provide Titan a notice and/or opportunity to cure in accordance with the notice to cure provisions of the contracts before supplying workers, hiring a replacement subcontractor, contracting with another subcontractor, stop paying and/or terminating Titan on the Huntington Park and LACES projects. Kemp claims that they did not breach the notice to cure provisions. [¶] In determining whether Kemp breached its contracts for failing to provide Titan with a notice and/or opportunity to cure, you must determine whether Kemp strictly complied with the notice and opportunity to cure provisions. Kemp would be allowed under contract to supply workers, hire a replacement subcontractor, contract with another subcontractor, stop paying or terminate Titan, only if Kemp first strictly complied with the notice and opportunity to cure provisions in their contracts. Strict compliance means Kemp could not deviate, in any way, from the plain meaning of the notice and opportunity to cure provisions. [¶] If you find that Kemp did not strictly comply with the notice and opportunity to cure provisions, you must find that Kemp breached its contracts with Titan.”
This is an improper “formula” instruction that directs the jury to find for Titan if it decides certain facts are true. (California Shoppers, Inc. v. Royal Globe Ins. Co. (1985) 175 Cal.App.3d 1, 65.) These instructions are disfavored, argumentative, and unduly emphasize one party’s case. (Ibid.; Dodge v. San Diego Electric Ry. Co. (1949) 92 Cal.App.2d 759, 763-764.) Formula instructions may mislead the jury when they omit required elements or available affirmative defenses. (Hubbard v. Calvin (1978) 83 Cal.App.3d 529, 533-534.) Titan’s proposed instruction omitted required elements of Titan’s breach of contract cause of action, notably Titan’s own performance (or excuse), and bypassed any ramifications of Titan’s repudiation. It simply equated Kemp’s “deviat[ion], in any way, from the plain meaning of the notice and opportunity to cure provisions” with a verdict for Titan. The court properly refused this misleading, argumentative instruction and had no duty to correct it. (See Bullock, supra, 159 Cal.App.4th at p. 685.)
Consideration. Second, the court properly declined to give Titan’s proposed instruction on the consideration for oral modification of a written contract. The instruction read in full: “An agreement that modifies or substitutes the parties’ obligations under an existing contract is valid consideration.” Titan contends the parties modified the subcontracts, with Kemp agreeing to provide the weekly payroll advances and Titan agreeing to provide additional workers. Titan claims the resolution of the parties’ dispute is sufficient consideration for the oral modification.
This instruction is fatally misleading. (See Bullock, supra, 159 Cal.App.4th at p. 685.) A written contract may be orally modified if the modification is supported by consideration (Civ. Code, § 1698, subd. (c)); indeed, the court separately instructed the jury, “[a] contract in writing may be modified by an oral agreement if the parties agree to give each other something of value.” That consideration may consist of resolving “disputes or claims asserted in good faith....” (Nesbitt Fruit Products, Inc. v. Del Monte Beverage Co. (1960) 177 Cal.App.2d 353, 361.) But consideration is lacking if one party agrees to some new duty — e.g., Kemp makes weekly advances — while the other agrees to meet its existing duty — e.g., Titan provides sufficient workers to maintain progress on the job. “[D]oing or promising to do something one is already legally bound to do cannot constitute the consideration needed to support a binding contract.” (Auerbach v. Great Western Bank (1999) 74 Cal.App.4th 1172, 1185.) Thus, each party must assume some new duty to each other (or forego the other’s performance of some existing duty). Titan’s proposed instruction misleadingly suggests that a change to “the parties’ obligations, ” collectively, sufficiently supports the modification.
The jury submitted a question to the court about a special verdict form that stated, “For any modified terms of the Huntington Park subcontract, did the parties agree to give each other something of value, described in the instructions as ‘consideration?’” The jury noted, “We cannot find the instructions that refer to ‘consideration.’” The court consulted with counsel and, rejecting their attempts at argumentative “clarification, ” read CACI No. 302 on contract formation to the jury. In doing so it stated the contract element, “[t]hat the parties agreed to give each other something of value. A promise to do something or not to do something may have value.” We see no error in the court’s response.
Quantum Meruit. Third, Titan fails to show any error in the court’s quantum meruit instructions. The court gave to the jury a standard form instruction providing in part, “When one person renders services to a third person at the request of another, under the reasonable belief that the requesting party will compensate [it] for such services, regardless of whether the requesting [party] derives any benefit from the services, the law imposes an obligation on the requesting party to pay for the reasonable value of the services....” (BAJI No. 10.71.) The court also gave to the jury special verdict forms for Titan’s quantum meruit claim. The forms’ first question was, “Did Titan perform services for Kemp on the LACES [or Huntington Park] project that were not covered by the terms of the contract?” Titan concedes there is nothing “per se incorrect” about these instructions and forms.
The jury submitted a question to the court about the quantum meruit verdict forms. The jury asked, “[Are] special verdict forms 57 through 63 [on quantum meruit] dealing with change orders, acceleration or something else?” The court met with counsel and drafted a written response. The transcript shows no objection from Titan, other than counsel’s statement: “It is a difficult question. I don’t know the best answer, but — may I approach, Your Honor?” The appellate record does not include the written response.
The jury deliberated more and submitted another question. It asked, “Without further instructions on special verdict forms 57 through 63, as requested previously, we are at an impasse. What do we do next?” The court discussed the matter with counsel and, without objection from Titan, read a lengthy response to the jury. The next day, the court gave a further written response to the jury after discussing the matter more with counsel. That response is not in the appellate record, either.
The court stated: “Services that are provided by one party to another in this case theoretically are either addressed by the terms of a contract, something that you found to be a contract in the case, or they are not. Okay. Whatever label you want to give to them. Okay. If there are something that — that is addressed in the contract, then you do your analysis using your special verdicts for contract. [¶] If they are something that you find are services that are not addressed or covered, if you will, by any contract, then you do the analysis by the verdict forms 57 through 63, which have to do with a legal concept called ‘quantum meruit.’ That’s why it says that on the verdict forms. And it has to do for being compensated with services that are provided that are not covered by a contract. [¶] Okay. [¶] Principal Juror...: Sorry. [¶] The Court: So your first steps would be to look and say: are these services that somebody is seeking compensation for services that are covered or come under the terms of any of the contracts? And to do that you look to the contracts. Okay. You say, yes, then you go through your analysis on your — on your contract special verdicts. [¶] If you do not find that they come under, or covered by, fall within the provisions of any of the contracts, then you do your analysis under quantum meruit. [¶] If you did not find any — if you did not believe any of the services were not covered by some contract, then you have no services to consider under the quantum meruit special verdicts. [¶] Are you ready to go wrestle with that for a while?” ”
Titan asserts the court’s comments on quantum meruit, taken together, were confusing. It notes the jury found the parties had agreed to modify the subcontracts, but the modifications were not supported by consideration. It also asserts it performed work subject to the modifications — namely, accelerating its progress and submitting corresponding change orders. Titan concludes the court “left the jury with a tautological choice: either find that the services rendered by Titan were covered by the parties’ contracts and therefore not subject to quantum meruit recovery, or find that those services were rendered ‘outside the contracts’ and were therefore recoverable in quantum meruit.”
By leaving out of the record two of the court’s responses, Titan leaves us unable to assign any error. Titan had the obligation to “ensure that the appellate record includes the instructions given”; without the court’s responses, “we must presume that there was no error.” (Bullock, supra, 159 Cal.App.4th at p. 678.) Presumably, the court’s last comment to the jury clarified any confusion of concern to Titan.
At any rate, the instructions in the record seem substantially correct. Titan cannot recover in quantum meruit for work required by the subcontracts. “[A]s a matter of law, a quasi-contract action for unjust enrichment does not lie where, as here, express binding agreements exist and define the parties’ rights. [Citations.] ‘When parties have an actual contract covering a subject, a court cannot — not even under the guise of equity jurisprudence — substitute the court’s own concepts of fairness regarding that subject in place of the parties’ own contract.’” (California Medical Assn. v. Aetna U.S. Healthcare of California, Inc. (2001) 94 Cal.App.4th 151, 172, fns. omitted.) What seems “tautological, ” to use Titan’s word, is its position: Titan was necessarily entitled to extra pay — either by contract or in quantum meruit — for doing “extra” work required by contract. By finding the subcontracts were modified without consideration, the jury apparently found Kemp made an additional promise to make weekly payroll advances to Titan in exchange for nothing more than Titan’s promise to provide sufficient workers to keep the project on schedule — as the subcontracts already required.
Substantial Evidence Supports the Court’s Alter Ego Finding
In its cross-appeal, Kemp challenges the court’s finding that the Nelsons were not the alter egos of Titan. The court found: “the Nelsons treated Titan as a separate and distinct entity, at all times acted in good faith, and.... did not abuse the protections of the corporate form so as to commit fraud or injustice on Kemp, its creditors or the public at large. [¶] Titan was a lawfully incorporated enterprise that respected all corporate formalities.... For all intents and purposes, Titan and the Nelsons were financially and legally separate from each other. [¶] Although Titan ultimately failed, the Nelsons continuously capitalized Titan in good faith with the unremitting intent to build a prosperous construction business.... At no time, did the Nelsons commit, or intend to commit any fraud, injustice or inequity through their majority control of Titan. [¶]... [A]t no time did the Nelsons withdraw any capital from Titan for their direct personal benefit.” The court noted Titan was “your prototypical small corporation where the individuals are essentially... the corporation, ” which the Nelsons planned “in good faith” to “gradually build up, ” but which failed due to “underbidding on work and inefficiencies and understaffing.... not to say that everybody wasn’t [acting] in good faith....”
Kemp notes it offered contrary evidence. Its evidence showed the Nelsons were Titan’s founders and only officers, started Titan with an inadequate capitalization of $10,200, maintained an unreasonably low capitalization while committing to electrical subcontracts worth $14. 5 million, kept Titan afloat with personal loans, and used their control of Titan to siphon off money instead of hiring additional workers or paying other creditors. Meanwhile, Titan never made a profit. And the Nelsons continue to loan money to Titan to finance this litigation. Kemp contends this evidence establishes conclusively the Nelsons were the alter egos of Titan.
“The alter ego doctrine arises when a plaintiff comes into court claiming that an opposing party is using the corporate form unjustly and in derogation of the plaintiff’s interests. [Citation.] In certain circumstances the court will disregard the corporate entity and will hold the individual shareholders liable for the actions of the corporation: ‘As the separate personality of the corporation is a statutory privilege, it must be used for legitimate business purposes and must not be perverted. When it is abused it will be disregarded....’” (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 300 (Mesler).) “There is no litmus test to determine when the corporate veil will be pierced; rather the result will depend on the circumstances of each particular case. There are, nevertheless, two general requirements: ‘(1) that there be such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist and (2) that, if the acts are treated as those of the corporation alone, an inequitable result will follow.’” (Ibid.)
Because the alter ego doctrine is inherently case-specific, any list of applicable factors is necessarily non-exhaustive. Factors enumerated by Associated Vendors, Inc. v. Oakland Meat Co. (1962) 210 Cal.App.2d 825 may include “[c]ommingling of funds and other assets, ” “the unauthorized diversion of corporate funds or assets to other than corporate uses, ” the failure to issue stock, “the failure to maintain minutes or adequate corporate records, ” “the holding out by an individual that he is personally liable for the debts of the corporation, ” “sole ownership of all of the stock in a corporation by one individual or the members of a family, ” “the failure to adequately capitalize a corporation, ” “the total absence of corporate assets, and undercapitalization, ” “the use of a corporation as a mere shell, instrumentality or conduit, ” “the concealment and misrepresentation of the identity of the responsible ownership, ” “the disregard of legal formalities and the failure to maintain arm’s length relationships among related entities, ” “the diversion of assets from a corporation by or to a stockholder, ” and “the contracting with another with intent to use avoid performance by use of the corporate entity as a shield against personal liability.” (Id. at pp. 838-840.)
“‘The law as to whether courts will pierce the corporate veil is easy to state but difficult to apply.’ [Citation.] Because it is founded on equitable principles, application of the alter ego ‘is not made to depend upon prior decisions involving factual situations which appear to be similar.... “It is the general rule that the conditions under which a corporate entity may be disregarded vary according to the circumstances of each case.”’ [Citations.] Whether the evidence has established that the corporate veil should be ignored is primarily a question of fact which should not be disturbed when supported by substantial evidence.” (Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220, 1248 (Las Palmas).)
Despite Kemp’s contrary evidence, substantial evidence supported the court’s decision not to impose alter ego liability against the Nelsons. The Nelsons dutifully incorporated Titan and issued shares to themselves and at least one Titan employee. The shareholders held regular meetings and kept minutes. Titan maintained a separate office, separate bank accounts, separate credit cards, and separate insurance from the Nelsons. It employed approximately 100 of its own workers, obtained financing in its own name, and filed its own tax returns. Nelson never drew a salary from Titan, and the Nelsons’ loans to Titan were documented by promissory notes. After a six month trial, the court concluded the Nelsons operated Titan in good faith and did not favor their loans to the detriment of Titan, Kemp, or anyone else.
So while the parties offered conflicting evidence of the Nelsons’ alter ego liability, “‘[i]t is not our task to weigh conflicts and disputes in the evidence; that is the province of the trier of fact. (ASP Properties, supra, 133 Cal.App.4th at p. 1266.) Alter ego raises “primarily a question of fact which should not be disturbed when supported by substantial evidence.” (Las Palmas, supra, 235 Cal.App.3d at p. 1248.) Here, it was. The record sufficiently shows Titan and the Nelsons did not share a unified personality such that maintaining separate liability would be unjust. (See Mesler, supra, 39 Cal.3d at p. 300.)
We find no reversible error in the court’s evidentiary rulings related to the alter ego claims. Kemp fails to show prejudice from the court’s refusal to order Titan to produce original documents at trial — it makes no showing Titan’s copies were inauthentic. Nor does Kemp show prejudice from the court’s in camera review of the Nelsons’ personal financial documents and its resulting decision not to disclose them to Kemp. Titan’s documents showed it maintained a separate identity from the Nelsons.
DISPOSITION
The judgment and the attorney fee orders are affirmed. Kemp shall recover its costs incurred on Titan’s appeal, and the Nelsons shall recover their costs incurred on Kemp’s cross-appeal.
WE CONCUR: BEDSWORTH, ACTING P. J., O’LEARY, J.