Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
Appeal from an order of the Superior Court of Orange County Super. Ct. No. 06CC03417, James J., Di Cesare, Judge.
Rizio & Nelson, R. Shawn Nelson and Eric Ryanen for Plaintiff and Appellant.
Law Offices of Edward W. Freedman and Edward W. Freedman for Objectors and Respondents.
OPINION
MOORE, J.
A restaurant owner hired a general contractor, a sole proprietor, to build out a restaurant. The sole proprietor incorporated his business. The newly formed corporation was run by the (former) sole proprietor and a business associate. Somewhere along the way, the corporation undertook to act as the general contractor on the restaurant project. After the project soured, the restaurant owner obtained an arbitration award against the corporation. The award was thereafter confirmed to judgment. After the corporation filed for bankruptcy protection, the restaurant owner sought to have the judgment amended to name the sole proprietor and a second corporation he had formed as additional judgment debtors. The restaurant owner contended the sole proprietor should be held liable not because he had signed the contract himself, but because he was the alter ego of the corporation. It also asserted that the second corporation should be added as a judgment debtor on both alter ego and successor liability theories.
The restaurant owner appeals from an order denying the motion to amend. We affirm. The judgment could not be amended to add either the sole proprietor or the second corporation as a judgment debtor on an alter ego theory because of due process concerns. Also, the restaurant owner did not adduce substantial evidence to show that the second corporation was the successor to the first.
I
FACTS
As a word of caution at the outset, the reader should be aware to pay particular attention to the exact names used to describe the contractor in the following recitation of facts. The differences in the names “Bolton,” “Paul Bolton,” “Bolton Construction Co.,” “Bolton Construction Company,” “Bolton Construction, Inc.,” “Bolton Construction Co., Inc.,” and “Bolton Construction Company, Inc.,” are key to an understanding of the mess that erupted from the mix-and-match usage of those various names over a period of several years.
On May 31, 2005, Rockin Restaurants, Inc. (Rockin) entered into a contract with Bolton Construction Co. The contract was signed on behalf of the contractor by “Paul Bolton, Owner.” Multitudinous change orders were entered into with respect to the contract. The change orders were executed by Robert Bruchmann on behalf of Bolton Construction, Inc.
In a dispute arising out of that contract, Rockin obtained an arbitrator’s award against Bolton Construction Company, Inc. in the amount of $527,992.34. On October 6, 2006, that award was confirmed to judgment against Bolton Construction Co. Inc. On January 2, 2007, Bolton Construction, Inc. filed chapter 7 bankruptcy proceedings.
Thereafter, Rockin filed a motion to amend the judgment to add judgment debtors. Rockin sought to add S.D. Southwest, Inc., both individually and doing business as S.D. Southwest Construction Service, Inc., and Paul Bolton, as additional judgment debtors. Rockin claimed that Paul and Reneé Bolton owned and controlled both Bolton Construction, Inc. and S.D. Southwest, Inc. It further claimed that after judgment was entered, Paul Bolton caused the license of Bolton Construction, Inc. to be transferred to S.D. Southwest, Inc. and caused Bolton Construction, Inc. to file the chapter 7 bankruptcy proceedings. On July 27, 2007, the court entered a judgment that Rockin recover the amount of $527,992.34 from Bolton Construction Co. Inc., Paul Bolton and S.D. Southwest Construction Service, Inc., individually and doing business as S.D. Southwest Construction Service.
Paul Bolton and S.D. Southwest, Inc. filed an ex parte application and special appearance to set aside what they referred to as the July 27, 2007 order. They claimed Rockin failed to effectuate proper service of notice of the July 27, 2007 hearing on the motion to amend. A day later, Paul Bolton and S.D. Southwest, Inc. filed a motion to reconsider the order, also on the basis of a failure of service. Subsequently, they filed an amended notice of motion and supplemental brief to set aside the order and an opposition to the motion to add a judgment debtor.
In an ambiguous minute order of October 17, 2007, the court denied the motion to reconsider. At the same time, the text of the order implied that the court was then denying the previously granted motion to add judgment debtors. Rockin appeals from the minute order.
II
DISCUSSION
A. Minute Order:
Because of the confused nature of the minute order, we quote it substantially in full, as follows: “The Court, having heard oral argument on Defendant’s Motion to Reconsider Minute Order Dated 7-27-07 . . ., now issues the following ruling: [¶] Moving Party has made abundantly clear that it was aware of Bolton throughout this litigation. Despite Bolton’s ducking in and out of the litigation so aptly pointed out by Moving Party, no attempt has been made until the filing of this motion to make Bolton an active part of this lawsuit yet nothing precluded him being named as an alter ego from the inception. [¶] As demonstrated by Moving Party’s and Responding Party’s Ex. 5-6, the Arbitrator was asked to issue the award against Bolton as [an] individual but declined to do so. The only reason to grant this motion would have to be some event that occurred after the arbitration award. No such event has been demonstrated. The motion is denied. [¶] Defendant’s Motion to Reconsider Minute Order Dated 7-27-07 is denied.”
The parties offer little help in deciphering what happened procedurally. However, it would appear that the court in effect granted the motion of Paul Bolton and S.D. Southwest Construction, Inc. to set aside the amended judgment under Code of Civil Procedure section 473, subdivision (d), on the basis of defective service. Then, the court put Rockin’s motion to amend the judgment at issue and denied it on the merits. Consequently, it denied the motion for reconsideration as moot. The parties offer no better suggestion for interpreting the minute order, and they do not argue procedural irregularities. We will assume that the minute order is a procedurally correct order and address, on the merits, what appears to be an order denying Rockin’s motion to amend the judgment.
B. Corporate Identities:
As a reference guide for the confusing set of facts that follows, we provide here the available evidence pertaining to the various entities involved in this litigation.
(1) Bolton Construction Co.
According to a Contractors State License Board Web site printout dated August 2, 2006, Bolton Construction Co. held license No. 839131 as of May 25, 2004. The company was described as a sole proprietorship, owned by Paul Bolton.
(2) PBCC, Inc. and Bolton Construction, Inc.
According to a Secretary of State Web site printout dated July 21, 2006, Bolton Construction, Inc. filed its articles of incorporation in October 2004. The agent for service of process was Paul Bolton.
PBCC, Inc. was incorporated on October 12, 2004. The articles of incorporation were signed by Paul Bolton and Robert Bruchmann. The elected officers were Robert Bruchmann, as chairman of the board, vice-president and chief financial officer, Paul Bolton as chief executive officer and president, and Reneé Bolton as secretary. A certificate of amendment of articles of incorporation dated June 20, 2005 shows that the name of the corporation was changed from PBCC, Inc. to Bolton Construction, Inc.
According to a Contractors State License Board Web site printout dated January 30, 2007, PBCC Inc. held license No. 860782, as of June 23, 2005. Paul Bolton represented that he owned at least 10 percent of the company. Paul Bolton was the responsible managing officer, chief executive officer, and president. Robert Bruchmann and Reneé Bolton were officers. The printout showed that the license was cancelled per request on January 26, 2007 (the same month Bolton Construction, Inc. had filed bankruptcy proceedings).
(3) S.D. Southwest, Inc.
An April 3, 2007 Secretary of State Web site printout reflects that S.D. Southwest, Inc. is a Nevada corporation, whose articles of incorporation were filed in May 2004. P. Bolton was designated as the president, and R. Bolton was designated as the secretary and treasurer and as a director.
According to a Contractors State License Board Web site printout dated January 30, 2007, license No. 839131, originally issued on May 25, 2004 (to Bolton Construction Co.), was reissued on August 9, 2006, and was then held by S.D. Southwest, Inc. doing business as S.D. Construction Services, Inc. Paul Bolton represented that he owned at least 10 percent of the company. Paul Bolton was the responsible managing officer, chief executive officer, and president. Reneé Bolton was an officer.
C. Proceedings:
On December 12, 2005, Attorney R. Shawn Nelson sent a letter addressed to Paul Bolton of “Bolton Construction.” The attorney made known that he represented Rockin, which thereby declared a breach of contract.
Rockin sent a February 2, 2006 demand for arbitration to Attorney Francis Donohue of Voss, Cook & Thel, presumably known to Rockin as counsel for the contractor. In that letter, Rockin referred to its opponent simply as “Bolton.” In response, Attorney Donohue sent a letter stating that “Bolton” was agreeable to using IVAMS rather than AAA for any mediation or arbitration. “Bolton Construction” was copied on the letter.
A day later, Rockin sent a letter to IVAMS to submit the matter for a mediation and arbitration hearing. It identified the defendant as “Bolton Construction Inc.”
Rockin sent a letter to American Contractors Indemnity Company regarding assured Bolton Construction Co., bond No. 209808. Rockin copied both Bolton Construction Company and Attorney Donohue on the letter. HCC Surety Group responded by letter dated February 8, 2006, in which it characterized the principal on the bond as Paul Bolton doing business as PBCC Inc., under license No. 839131.
Rockin filed a complaint against Bolton Construction Co., Inc. on February 22, 2006. In so doing, it appeared to merge the names of the two parties with whom it had been dealing, as though one name or the other surely must have contained a typographical error, and without any apparent recognition that, in fact, two different parties had been acting as contractor. At the same time, the body of the complaint correctly named Bolton Construction Co. as the party with whom Rockin had contracted, and a copy of the contract was attached to the complaint. Interestingly, the complaint also stated that a mechanics’ lien had been recorded against the property upon which the work was being performed, and a copy of the mechanics’ lien, executed by Bolton Construction, Inc., was attached. The record on appeal does not contain a copy of a proof of service.
On March 2, 2006, Bolton Construction Inc. sent a letter to HCC Surety Group regarding the claim against the bond. That letter stated in part: “Rockin’ Restaurants breached their contract with us, by terminating our contract. . . . [¶] Please note that Bolton, Paul is not doing business as PBCC, Bolton Construction has no involvement whatsoever in this project. This project is contracted with Bolton Construction, INC. license number 860782.” The letter was signed by Robert Bruchmann.
Bolton Construction Inc. also sent a letter to Rockin, on March 10, 2006. In that letter, Bolton Construction Inc. provided to Rockin, in advance of the mediation, notice of its claim against Rockin. It attached to the letter copies of many change orders executed by Robert Bruchmann on behalf of Bolton Construction Inc.
As the date of the scheduled arbitration approached, things got interesting. The arbitration award recites this information: “Apparently, on Thursday, July 20th, Francis T. [Donohue], Esq. of Voss, Cook & Thel LLP, counsel for Bolton called Judicate West and advised he no longer represented Bolton and the arbitration should go off calendar. . . . Later that day, by fax, Mr. [Donohue] filed with Judicate West a document entitled ‘Notice of Substitution of Representation of Respondent Bolton Construction.’ He advised further communications should be had with Robert Bruchmann and Paul Bolton at Bolton Construction. He also noted, though he had participated in a case management conference with the mediator, he never appeared as counsel of record for Bolton. Later on the 26th a document was received from Bolton claiming lack of notice of the claims of Rockin and of the arbitration.”
Rockin, in its July 28, 2006 arbitration brief, identified the defendant as Bolton Construction Company, Inc., again using a hybrid version of the names of two different legal entities. The body of the brief stated that the defendant was a corporation. Attached to the brief in support of that assertion was a copy of a Secretary of State record regarding Bolton Construction, Inc. Thus, while Rockin still seemed at least somewhat confused as to the name of the party who was the defendant, it had nonetheless committed itself to pressing a claim against the corporation, having overlooked the party with whom it originally contracted.
Counsel for Rockin appeared for the July 28, 2006 arbitration, but no one appeared on behalf of the defendant. The arbitration went forward.
On August 3, 2006, after the hoopla concerning the defendant’s legal representation and failure to appear, but before the arbitration award was signed, Rockin filed a supplemental arbitration brief and notice of errata. It claimed that counsel had misidentified the defendant as Bolton Construction, Inc., whereas the correct defendant was Bolton Construction Co., as reflected on the contract. It explained that Bolton Construction Co., the correct defendant, was a sole proprietorship owned by Paul Bolton. Rockin requested that the arbitrator identify the defendant as Paul Bolton, sole owner of Bolton Construction Co.
This prompted some maneuvering on the part of the contractor. In a declaration dated August 16, 2006, filed in the arbitration proceedings, Attorney Donohue stated that he had been retained by Bolton Construction, Inc. in December 2005 to provide general advice on business activities. He further stated that Voss, Cook & Thel represented Bolton Construction, Inc. in the litigation with Rockin. He also declared that Bolton Construction, Inc. had agreed to attempt to resolve its dispute with Rockin via mediation and that he had attended the mediation on behalf of Bolton Construction, Inc. In addition, Attorney Donohue represented that Bolton Construction, Inc. thereafter agreed to arbitration. He also represented that neither he nor Voss, Cook & Thel had ever represented Paul Bolton, either individually or doing business as Bolton Construction Company. Attorney Donohue also asserted that he had been unaware of the existence of Bolton Construction Company and Paul Bolton’s conduct of business under that name until August, when he learned that Rockin had raised the matter. (Apparently, in the course of his representation, he had never read the contract at issue in the litigation, the mediation, and the arbitration.)
Paul Bolton also filed an August 16, 2006 declaration in the arbitration proceedings. He stated that he was the president of Bolton Construction, Inc. and that Voss, Cook & Thel had been retained to represent Bolton Construction, Inc. He also declared that he was the sole owner of Paul Bolton doing business as Bolton Construction Company, a separate entity from Bolton Construction, Inc. He maintained that Voss, Cook & Thel had never represented Paul Bolton doing business as Bolton Construction Company. Paul Bolton declared that he, doing business as Bolton Construction Company, had never been served with a demand for arbitration and was never a party to the matter.
On August 21, 2006, the arbitrator awarded $527,992.34 to Rockin. Missing an opportunity to clean up the ambiguities, the arbitrator named the defendant in the caption on the face of the award as a hybridized “Bolton Construction Company, Inc.” The defendant was not fully identified in any other portion of the award. The parties have apparently construed this as an award against Bolton Construction, Inc., not Bolton Construction Co.
As we have seen, the arbitration award was confirmed to judgment and Rockin obtained an amended judgment adding judgment debtors. Paul Bolton and S.D. Southwest, Inc. were successful in overturning the amended judgment and fighting off Rockin’s renewed efforts to amend the judgment.
D. Analysis:
(1) Introduction
As Rockin states, an arbitration award confirmed to judgment may be amended by the superior court to add judgment debtors on the basis of alter ego. (Hall, Goodhue, Haisley & Barker, Inc. v. Marconi Conf. Center Bd. (1996) 41 Cal.App.4th 1551.) A judgment may also be amended to add a successor corporation as a judgment debtor. (McClellan v. Northridge Park Townhome Owners Assn. (2001) 89 Cal.App.4th 746.) The question is whether the court abused its discretion in failing to amend the judgment here. (Alexander v. Abbey of the Chimes (1980) 104 Cal.App.3d 39, 47.)
In its effort to add Paul Bolton and S.D. Southwest, Inc. as judgment debtors, liable for the judgment against Bolton Construction, Inc., Rockin advances two legal theories on appeal: alter ego and successor liability. Rockin is not claiming that Paul Bolton should be liable for the judgment because he signed the contract and agreed to perform it, but because he is the alter ego of Bolton Construction, Inc., against whom Rockin chose to proceed. Rockin avers that S.D. Southwest, Inc. should be held liable as both the alter ego of and the successor in interest to Bolton Construction, Inc.
Paul Bolton and S.D. Southwest, Inc. counter that the court correctly determined that they cannot be added as judgment debtors for both procedural and substantive reasons. As we shall show, they are correct.
(2) Due process limitations
Paul Bolton and S.D. Southwest, Inc. cite NEC Electronics Inc. v. Hurt (1989) 208 Cal.App.3d 772 and Motores De Mexicali v. Superior Court (1958) 51 Cal.2d 172 in support of their position. The cases are dispositive.
In NEC Electronics Inc. v. Hurt, supra, 208 Cal.App.3d 772, NEC Electronics Inc. (NEC) filed suit against Ph Components (Ph) to recover monies due on a sale of goods from NEC to Ph. Ph did not appear for trial. (Id. at p. 775.) NEC obtained a $139,366.37 judgment against Ph. Ph thereafter filed bankruptcy proceedings. (Id. at p. 776.) NEC then filed a motion to amend the judgment to name Porter Hurt, the sole shareholder and chief executive officer of Ph, as an additional judgment debtor, on an alter ego theory. (Id. at pp. 775-776.) The trial court granted the motion, but the appellate court reversed. (Id. at pp. 776, 782.)
The appellate court held that substantial evidence supported the trial court’s alter ego finding. (NEC Electronics Inc. v. Hurt, supra, 208 Cal.App.3d at p. 778.) Hurt had received more than $2.8 million in undocumented loans from Ph, on which he paid no interest. Hurt also received from Ph berthing fees, insurance, and fuel and maintenance expenses with respect to his privately owned boat. In addition, Ph provided a leased vehicle to Hurt’s wife and made more than 30 mortgage payments on his personal residence. At the same time, Hurt paid numerous corporate obligations with his personal funds. (Id. at p. 776.) Alter ego notwithstanding, the appellate court held that it was improper to amend the judgment to add Hurt as an additional judgment debtor. (Id. at p. 778.)
The NEC court stated: “Judgments are often amended to add additional judgment debtors on the grounds that a person or entity is the alter ego of the original judgment debtor. [Citations.] This is an equitable procedure based on the theory that the court is not amending the judgment to add a new defendant but is merely inserting the correct name of the real defendant. [Citations.] ‘Such a procedure is an appropriate and complete method by which to bind new individual defendants where it can be demonstrated that in their capacity as alter ego of the corporation they in fact had control of the previous litigation, and thus were virtually represented in the lawsuit.’ [Citation.] In other words, ‘[i]f the claim of individual liability is made at some later stage in the action, the judgment can be made individually binding on a person associated with the corporation only if the individual to be charged, personally or through a representative, had control of the litigation and occasion to conduct it with a diligence corresponding to the risk of personal liability that was involved.’ [Citation.]” (NEC Electronics Inc. v. Hurt, supra, 208 Cal.App.3d at pp. 778-779.)
The court remarked that surely Hurt, as chief executive officer, was aware of the lawsuit. However, awareness alone was not enough. (NEC Electronics Inc. v. Hurt, supra, 208 Cal.App.3d at p. 781.) Hurt had neither been named as a party to the litigation nor served in his individual capacity. (Id. at p. 775, 780.) He was not at risk of personal liability and had no obligation to intervene. (Id. at p. 780.) Furthermore, inasmuch as Ph neither appeared at trial nor made any attempt to defend the lawsuit, Hurt’s individual interests could not have been represented in the litigation. (Id. at pp. 780-781.) The court concluded: “‘Control of the litigation sufficient to overcome due process objections may consist of a combination of factors, usually including the financing of the litigation, the hiring of attorneys, and control over the course of the litigation.’ [Citation.] Clearly some active defense of the underlying claim is contemplated. [Citation.] In this case, Hurt delegated responsibility for the claim to [Ph’s chief financial officer]. [The two men] did attempt to satisfy the creditors of Ph but were never actively involved in defending the NEC lawsuit. As a result, we do not believe that there is substantial evidence to support the trial court’s conclusion that Hurt controlled the action between NEC and Ph.” (Id. at p. 781.)
The case before us is strikingly similar to the one in NEC Electronics Inc. v. Hurt, supra, 208 Cal.App.3d 772. However, Rockin has presented less evidence of alter ego than did the plaintiff in NEC Electronics Inc. But it matters not either way.
In its February 2, 2006 letter to counsel for Bolton Construction, Inc., Rockin demanded that “Bolton” submit to arbitration. It made no mention of Paul Bolton individually, even though he was the one who had signed the contract. In its February 9, 2006 letter to IVAMS regarding mediation and arbitration services, Rockin named the defendant as “Bolton Construction, Inc.,” not Paul Bolton individually, or Paul Bolton doing business as Bolton Construction Co. In response to Rockin’s bond claim, the surety responded by characterizing the principal on the bond as Paul Bolton operating under a dba. Even then, no apparent effort was made to draw Paul Bolton into the arbitration proceedings. Rockin made clear in its arbitration brief that it was pursuing a corporate entity.
In his declaration, Paul Bolton states that Robert Bruchmann hired Attorney Donohue to represent Bolton Construction, Inc. and that it was Robert Bruchmann who managed the litigation. He further declares that Robert Bruchmann handled nearly all of the communication with Attorney Donohue, that he himself only spoke to Attorney Donohue about the litigation a couple of times, and that his own involvement in the litigation “was primarily just attending a mediation.” Rockin cites no evidence to show that Paul Bolton had any other involvement with, or control over, the litigation. Certainly it cites no evidence at all to show that S.D. Southwest, Inc. had any control over the litigation. Given this, substantial evidence supports the trial court’s implied finding that neither Paul Bolton individually nor S.D. Southwest, Inc. controlled the litigation. We cannot say the court abused its discretion in failing to amend the judgment to include them as an additional judgment debtors.
Our conclusion is supported also by the Supreme Court decision in Motores De Mexicali v. Superior Court, supra, 51 Cal.2d 172. There, the plaintiff sold used cars to Erwin G. Resnick, William D. Cowan and R. William Cowan. The plaintiff received bank drafts in the name of Bi Rite Auto Sales in payment, but the drafts were dishonored. (Id. at p. 174.) The plaintiff sued Erbel Inc., doing business as Bi Rite Auto Sales, on the dishonored drafts. (Id. at pp. 172-174.) The complaint was served on William D. Cowan, as president of Erbel, Inc. (Id. at p. 173.) The plaintiff neither named nor served, in their individual capacities, Erwin G. Resnick, William D. Cowan or R. William Cowan. The plaintiff obtained a default judgment against Erbel, Inc. Erbel, Inc. then filed bankruptcy proceedings. (Ibid.)
The plaintiff thereafter filed a petition for an order to show cause why the judgment should not be corrected to add the names of Erwin G. Resnick, William D. Cowan and R. William Cowan as additional judgment debtors. (Motores De Mexicali v. Superior Court, supra, 51 Cal.2d at pp. 173-174.) It claimed that the three were buying and selling used cars as Bi Rite Auto Sales, had full management and control of Erbel, Inc., and were the alter egos of the corporation. (Id. at p. 174.) The Supreme Court did not afford the plaintiff relief.
Even though William D. Cowan had been served with the complaint as president of Erbel, Inc., and was obviously aware of the litigation, the court concluded: “Resnick and the Cowans in no way participated in the defense of the basic action against Erbel, Inc. Those three did not have attorneys subsidized by them appearing and defending the action against the corporation now alleged to be their alter ego. Instead, the judgment was entered against Erbel, Inc., strictly by default.” (Motores De Mexicali v. Superior Court, supra, 51 Cal.2d at pp. 175-176.) The court continued: “[A]n amendment to the judgment here to include Resnick and the Cowans would constitute a denial of due process of law. (U.S. Const., 14th Amend.) That constitutional provision guarantees that any person against whom a claim is asserted in a judicial proceeding shall have the opportunity to be heard and to present his defenses. [Citations.] To summarily add Resnick and the Cowans to the judgment heretofore running only against Erbel, Inc., without allowing them to litigate any questions beyond their relation to the allegedly alter ego corporation would patently violate this constitutional safeguard. Nor is this difficulty overcome by the suggestion that Resnick and the Cowans should have intervened in the action brought solely against Erbel, Inc., if they desired to assert any personal defenses against the drafts. They were under no duty to appear and defend personally in that action, since no claim had been made against them personally.” (Motores De Mexicali v. Superior Court, supra, 51 Cal.2d at p. 176.)
The decision in Motores De Mexicali v. Superior Court, supra, 51 Cal.2d 172 controls the outcome in the case before us. Paul Bolton was aware of the arbitration proceedings, but an arbitration award was entered against a separate legal entity, Bolton Construction, Inc., following its failure to appear. Paul Bolton was under no duty to intervene, just because of his awareness of the goings on. Not having appeared in the arbitration proceedings, he had no opportunity to present his defense. The same holds true as to S.D. Southwest, Inc.
Although this case may smack of some unfairness as to Rockin, inasmuch as it signed a contract with one party and a different party seemed to slip itself into the picture unnoticed, and thereafter act as though it was the correct party to be bound and to be pursued in the event of any dispute, Rockin is not faultless in the outcome. It signed a contract with one party and apparently never asked questions when a different party seemed to take over the contract. Content to deal with that party until the project soured, it obtained a judgment against the party with whom it dealt. Now it wants a judgment against Paul Bolton as well. But Paul Bolton was never hiding. He signed the contract. His bond was at issue. His identity was never concealed from Rockin, who was aware of his existence before the arbitration took place. (Jines v. Abarbanel (1978) 77 Cal.App.3d 702, 717.) Rockin did not pursue Paul Bolton individually and, at this point, it would be unfair to simply add him as a judgment debtor without affording him an opportunity to put on a defense.
(3) Successor Liability
To the extent Rockin relies not on alter ego liability, but rather successor liability, with regard to S.D. Southwest, Inc., the outcome is the same.
Rockin cites McClellan v. Northridge Park Townhome Owners Assn., supra, 89 Cal.App.4th 746 in support of its assertion that S.D. Southwest, Inc. should be held liable on a successor theory. As the court in McClellan stated, “‘[i]f a corporation organizes another corporation with practically the same shareholders and directors, transfers all the assets but does not pay all the first corporation’s debts, and continues to carry on the same business, the separate entities may be disregarded and the new corporation held liable for the obligations of the old. [Citations.]’ [Citation.] [¶] The general rule is ‘where one corporation sells or transfers all of its assets to another corporation, the latter is not liable for the debts and liabilities of the former unless (1) the purchaser expressly or impliedly agrees to such assumption, (2) the transaction amounts to a consolidation or merger of the two corporations, (3) the purchasing corporation is merely a continuation of the selling corporation, or (4) the transaction is entered into fraudulently to escape liability for debts. [Citations.]’ [Citations.]” (Id. at pp. 753-754, fn. omitted.)
The evidence Rockin offers in support of its successor liability theory is slim. First, it emphasizes a license transfer to S.D. Southwest, Inc. License No. 839131, once issued to Bolton Construction Co., was reissued to S.D. Southwest, Inc. doing business as S.D. Construction Services, Inc. on August 9, 2006. This evidence shows only a license transfer by Bolton Construction Co., not a license transfer by Bolton Construction, Inc. It does not help establish that S.D. Southwest, Inc. is the successor to Bolton Construction, Inc.
Second, Rockin points to Web site related evidence. An Internet archive Web site printout for “http://boltongc.com” states, under a June 2004 topic heading: “BOLTON CONSTRUCTION (now S.D. Construction Services, Inc.) AWARDED WAVE HOUSE BOARD WALK PROJECT . . . .” The printout also states that “Bolton Construction . . . is proud to announce the launch of the Wave House Board Walk Project . . . .” Inasmuch as the information predates the incorporation of PBCC, Inc., later named Bolton Construction, Inc., it would appear to be evidence of business dealings, in 2004, between S.D. Construction Services, Inc. and Bolton Construction Co., not Bolton Construction, Inc.
Rockin also points to November 2005 and March 2006 letters written by Robert Bruchmann on Bolton Construction Inc. letterhead, which identified the company license No. as 860782 and the company Web site as “http://www.boltongc.com.” It also draws our attention to a copy of an Internet archive Web site home page for “Bolton Construction Company” at “http://boltongc.com.” Rockin emphasizes that a May 5, 2006 entry on that home page lists the company license No. as 860782 and says: “Be sure to stop into the NEWS tab to check out The Wave House Project . . . .” Rockin implies that these items show the Wave House project was transferred from Bolton Construction, Inc. to S.D. Southwest, Inc. We cannot agree. The S.D. Construction Services, Inc. Web site item shows that S.D. Construction Services, Inc. took credit for the Wave House project in 2004, whereas Bolton Construction, Inc., as holder of license No. 860782, would appear to have claimed the Wave House project as its own in 2006.
The foregoing evidence does provide some support for Rockin’s general assertions that “[t]his is so confusing, sometimes even Bolton can’t keep it straight” and “Paul Bolton hid behind two contractors licenses and two corporations, interchangeably.” At this juncture, however, we are concerned only with successor liability. We are asking the singular question: Was S.D. Southwest, Inc. the successor to Bolton Construction, Inc.?
We observe the record reflects that Paul Bolton, who owned at least 10 percent of the company, was the chief executive officer and president of PBCC, Inc., later named Bolton Construction, Inc. Reneé Bolton was the secretary. The record also reflects that Paul Bolton was the chief executive officer and president of S.D. Southwest, Inc., doing business as S.D. Construction Services, Inc., and owned at least 10 percent of that company as well. Again, Reneé Bolton was the secretary. So, there certainly is overlap as to the management and ownership of the two entities. In addition, S.D. Construction Services, Inc. and Bolton Construction, Inc. both made use of the same Web site and Internet address at different points in time and each claimed some involvement with the Wave House project, but Bolton Construction, Inc. seemed to have claimed involvement last in time. And while a license was transferred from a Bolton entity to S.D. Southwest, Inc., the license was transferred from Bolton Construction Co., not from Bolton Construction, Inc.
We cannot say that the court erred in failing to find substantial evidence to show that S.D. Southwest, Inc. was the successor in interest to Bolton Construction, Inc. such that the former should be liable for the debts of the latter. Simply put, Rockin has not demonstrated that Bolton Construction, Inc. sold or transferred all of its assets to S.D. Southwest, Inc. End of story. (McClellan v. Northridge Park Townhome Owners Assn., supra, 89 Cal.App.4th at pp. 753-754.)
(4) Conclusion
By slip or by trick, Rockin pursued Bolton Construction, Inc., not the man who signed the contract. While Rockin’s complaint could be construed as naming both Bolton Construction, Inc. and Bolton Construction Co. as defendants, there is no evidence that the complaint was ever served on any defendant. Rockin made clear in its arbitration brief that the defendant it was then pursuing was Bolton Construction, Inc. It obtained an arbitration award and then a judgment against the entity it pursued.
When Rockin later sought to expand its potential avenues of recovery, it looked to Paul Bolton and S.D. Southwest, Inc. The problem is that neither one had had the opportunity to put on a defense at the arbitration hearing, where Bolton Construction, Inc., a separate legal entity, failed to appear. Furthermore, the evidence offered to establish that S.D. Southwest, Inc. was the successor in interest to Bolton Construction, Inc., such that it should be held liable for the debts thereof, fell short. The trial court correctly held that the judgment should not be amended to add Paul Bolton and S.D. Southwest, Inc. as judgment debtors.
All that being said, it was still Paul Bolton who signed the contract. We express no opinion as to whether Rockin may still pursue Paul Bolton doing business as Bolton Construction Co., starting with new arbitration proceedings—fleet afoot.
III
DISPOSITION
The order is affirmed. Paul Bolton and S.D. Southwest, Inc. shall recover their costs on appeal.
WE CONCUR: O’LEARY, ACTING P. J., IKOLA, J.