Aceituno v. Vowell et al
Filing
105
ORDER granting in part and denying in part 92 MOTION to liquidate damages against Defendant Fidelis Marketing, Inc. and to hold Defendant Jeffrey Garcia personally liable signed by Judge John A. Mendez on 3/2/15. (Kaminski, H)
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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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In re:
Case No.: 2:12-cv-03068 JAM EFB
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INTELLIGENT DIRECT MARKETING,
Related No.: 2:09-cv-02898 JAM
GGH
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Debtor,
----------------------------THOMAS ACEITUNO, Chapter 7
Trustee
Plaintiff,
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v.
[Bky Case 07-30685-A-7]
[Bky AP No. 09-2439]
ORDER GRANTING IN PART AND DENYING
IN PART PLAINTIFF’S MOTION TO
LIQUIDATE AMOUNT OF SUCCESSOR
LIABILITY AGAINST FIDELIS AND HOLD
JEFFREY GARCIA LIABLE
TODD VOWELL; RAEANNE VOWELL;
BEVERLY VOWELL; STEADFAST
MAILING SERVICES, INC.; SASHI
CORPORATION; JEFFREY K
GARCIA; AND FIDELIS
MARKETING, INC.,
Defendants.
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This matter is before the Court on Plaintiff Thomas
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Aceituno’s (“Plaintiff” or “Trustee”) motion to liquidate damages
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(Doc. #92) against Defendant Fidelis Marketing, Inc. (“Defendant
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Fidelis”) and to hold Defendant Jeffrey Garcia (“Defendant
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Garcia”) personally liable.
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Plaintiff’s motion, and also filed a special opposition (Doc.
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#94) disputing the Court’s jurisdiction over him.
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Todd and Raeanne Vowell filed a “response” (Doc. #99) to
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Plaintiff’s motion.
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(Doc. #100) and the Vowells (Doc. #101). 1
Defendant Garcia opposes (Doc. #96)
Defendants
Plaintiff replied to both Defendant Garcia
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I.
FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND
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The parties and the Court, having conducted a four-day bench
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trial from June 23, 2014 through June 26, 2014, are familiar with
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the factual and procedural history of this case.
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trial, the Court made the following factual and legal findings,
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relevant to Plaintiff’s present motion.
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operating Intelligent Direct Marketing, Inc. (“IDM”) as an
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automotive direct mailing service in 1994, and incorporated IDM
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in 1997.
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profitable years, IDM began operating at a loss by late 2006 and
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2007.
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Fidelis, a direct mail marketing company.
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IDM granted Fidelis a right to possess IDM’s goodwill, income
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stream, and assets.
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difference between IDM and Fidelis was that Fidelis would not be
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responsible for IDM’s debt.
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facts, the Court found that “Fidelis is the successor of IDM
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because Fidelis was created for the purpose of avoiding
Todd Vowell began
Fidelis F & C (Doc. #78) at 3.
Fidelis F & C at 5.
Following
After a number of
On May 1, 2007, Jeff Garcia created
Fidelis F & C at 6.
Fidelis F & C at 5.
In fact, the only
Fidelis F & C at 5.
Based on these
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This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was
scheduled for February 11, 2015.
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liability.”
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Court noted that “[t]he Trustee also seems to suggest that Mr.
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Garcia should be held directly liable [on behalf of Fidelis], but
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he fails to address alter ego liability.”
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The Court entered judgment against Fidelis, but in favor of Mr.
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Garcia.
Fidelis F & C at 26.
With regard to Mr. Garcia, the
Fidelis F & C at 25.
Fidelis F & C at 26.
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II.
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A.
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OPINION
Judicial Notice
Plaintiff requests that the Court take judicial notice of
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the “proofs of claim” submitted in support of his motion.
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#92.
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page of the exhibits, these documents appear to be part of the
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record in the underlying bankruptcy case.
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are public records, and Defendants do not dispute their
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authenticity.
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judicial notice, and Plaintiff’s request is GRANTED.
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the Court notes that it may only take judicial notice of the
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existence of such documents, not the facts contained therein.
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Doc.
Based on Plaintiff’s representations and the header on each
These court documents
Accordingly, they are the proper subject of
However,
Similarly, Defendants Todd and Raeanne Vowell request that
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the Court take judicial notice of the “proof of claim” submitted
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by the Vowells in the underlying bankruptcy case.
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This document is a public record, and Plaintiff does not dispute
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its authenticity.
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judicial notice, and the request is GRANTED.
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notes that it may only take judicial notice of the existence of
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the document, not the facts contained therein.
Doc. #99-1.
Accordingly, it is the proper subject of
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Again, the Court
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B.
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Discussion
1.
Calculation of Damages against Fidelis
Plaintiff moves for “an order fixing the total amount of the
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debts of IDM at $1,053,438.49 for purposes of giving effect to
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the successor liability of Fidelis Marketing, Inc., for IDM’s
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debts, as declared” in the Court’s September 18, 2014 order.
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Mot. at 1.
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summarizing the claims filed in the underlying IDM bankruptcy
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case, as well as copies of the documentary proof submitted in
Along with his motion, Plaintiff submits a chart
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support of these claims.
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not oppose this portion of Plaintiff’s motion, and does not
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dispute Plaintiff’s calculation of IDM’s debt, for which Fidelis
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bears successor liability.
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Vowell submit a “response” to Plaintiff’s motion, which is
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discussed below.
See Doc. #92.
Defendant Fidelis does
However, Defendants Todd and Raeanne
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Under 28 U.S.C. § 2202, the Court may grant “[f]urther
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necessary or proper relief . . . against any adverse party whose
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rights have been determined by [a declaratory] judgment.”
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U.S.C. § 2202.
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“declaratory judgment be entered against Fidelis declaring it
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liable for IDM’s debt on Plaintiff’s successor liability claim.”
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Order at 26.
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fixing the debt of IDM, for purposes of giving effect to the
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September 18, 2014 declaratory judgment imposing successor
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liability on Fidelis, is properly before the Court.
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On September 18, 2014, the Court ordered that
Accordingly, Plaintiff’s request for an order
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In calculating the amount of damages against Fidelis,
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Plaintiff looks to the claims submitted against IDM in the
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underlying bankruptcy action, but excludes two categories of
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claims.
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1, 2007, the date on which Fidelis came into existence as the
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“new IDM.”
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claims filed by Fidelis, Garcia, Sashi Corporation, Todd Vowell,
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or Raeanne Vowell.
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calculation is “conservative” because it excludes “doubtful or
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questionable claims.”
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the sum of all claims which do not fall into either of the above
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categories, Plaintiff seeks damages against Fidelis in the amount
First, Plaintiff excludes any claims arising after May
Mot. at 4.
Second, Plaintiff excludes any “insider”
Mot. at 4.
Plaintiff notes that this
Reply to Vowells at 1; Mot. at 4.
Taking
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of $1,053,438.49.
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are supported by documentary proof, which accompanies Plaintiff’s
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declaration.
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this calculation.
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and the supporting documentation, and in the absence of any
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opposition by Fidelis, the Court adopts Plaintiff’s calculation.
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Accordingly, the Court finds that the total amount of IDM’s debt,
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for which Fidelis is liable as a successor to IDM, is
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$1,053,438.49.
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determination as to whether or not the “insider” claims or claims
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arising after May 1, 2007 should ultimately be paid or disallowed
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during the Trustee’s distribution of the bankruptcy estate.
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All of the claims included in this calculation
Doc. #92.
As noted above, Fidelis does not oppose
In light of Plaintiff’s conservative approach
As discussed below, the Court makes no
Defendants Todd and Raeanne Vowell argue that Plaintiff is
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attempting to “summarily invalidate the Vowells’ claim.”
Vowell
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Response at 2.
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failure to include their claims in the calculation of damages
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against Fidelis will ultimately prevent them from prevailing on
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those claims during bankruptcy proceedings.
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2.
The Vowells express concern that Plaintiff’s
Vowell Response at
However, as explained in Plaintiff’s reply, this is not the
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case.
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seeks to fix the total amount of IDM’s debt for which Fidelis
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bears successor liability.
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($1,053,438.49) will be added to the bankruptcy estate, for
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eventual distribution by the Trustee.
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estate, the Trustee will “examine proofs of claims and object to
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the allowance of any claim that is improper.”
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704(a)(5).
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funds held by the Trustee, the estate will be distributed
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according to the priorities set forth in 11 U.S.C. § 726.
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Accordingly, the Vowells’ concern that this order will invalidate
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their claims is misplaced: a final determination as to the
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validity of their claims will not be made until later in the
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bankruptcy proceedings, after the Trustee has collected the funds
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comprising the bankruptcy estate.
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the Vowells ask the Court to increase the amount of damages
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imposed against Fidelis – by including their $2,286,479.57 claim
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against IDM – this request is not properly before the Court and
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Defendant Fidelis has had no chance to address their argument.
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Reply to Vowells at 2.
Plaintiff’s current motion merely
The amount imposed by the Court
Prior to distributing the
11 U.S.C. §
If the monetary amount of valid claims exceeds the
Moreover, to the extent that
For all of these reasons, Plaintiff’s motion to fix the
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amount of IDM’s debt, for which Fidelis bears successor
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liability, at $1,053,438.49 is GRANTED.
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2.
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Personal Liability of Garcia
Plaintiff also asks the Court to find that “Garcia as well
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as Fidelis [is] liable for repayment of [IDM’s] debt.”
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8.
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prevent Garcia from using Fidelis to shield himself from
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liability.”
Mot. at
Plaintiff argues that the “alter ego doctrine applies to
Mot. at 6.
Defendant Garcia responds that the Court
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lacks jurisdiction over him because it has already entered
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judgment in his favor, and that Plaintiff’s alter ego argument is
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foreclosed by the doctrine of res judicata.
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at 1; Garcia Opp. at 1.
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Garcia’s alter ego liability . . . was not pled or litigated.”
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Reply to Garcia at 2.
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Garcia Special Opp.
Plaintiff replies that “[t]he issue of
In its September 18, 2014 order, the Court specifically held
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that “all the claims not discussed in either the Trustee’s
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proposed findings of fact and and conclusions of law or the
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Trustee’s supplemental post-trial brief are abandoned.”
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F & C at 9.
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successor liability for IDM’s debts, the Court noted that “[t]he
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Trustee also seems to suggest that Mr. Garcia should be held
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directly liable . . . but he fails to address alter ego
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liability.”
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that “judgment be entered in favor of . . . Jeffrey Garcia”
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without limiting or qualifying this aspect of the order in any
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way.
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Fidelis
Immediately after finding that Fidelis bears
Fidelis F & C at 25.
The Court went on to order
Fidelis F & C at 26.
The plain implication of this language is that Mr. Garcia is
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not personally liable, under an alter ego theory of liability,
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for the successor liability of Fidelis on behalf of IDM’s debts.
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Plaintiff had an opportunity to present evidence at trial to
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support this argument in his proposed findings of fact and
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conclusions of law, and failed to adequately do so.
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Plaintiff concedes that the portion of his proposed findings
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which relates to successor liability “does not request alter ego
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liability against Garcia.”
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Court’s specific finding that arguments not made at the time of
Reply at 3.
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In fact,
In light of (1) the
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the trial would be deemed abandoned and (2) the Court’s specific
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finding that Plaintiff failed to address alter ego liability on
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behalf of Mr. Garcia, Plaintiff’s alter ego argument presently
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before the Court is barred by the doctrine of res judicata.
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Greenspan v. LADT, LLC, 191 Cal.App.4th 486, 514 (2010) (noting
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that “[r]es judicata prohibits the relitigation of claims and
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issues which have already been adjudicated in an earlier
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proceeding”).
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request for reconsideration of the Court’s prior finding as to
See
Plaintiff’s present motion amounts to an untimely
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Mr. Garcia.
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Court to revisit its entry of judgment in favor of Mr. Garcia,
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and the Court declines to give Plaintiff a second bite at the
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apple.
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Plaintiff has presented no compelling reason for the
Plaintiff’s reliance on Greenspan is misplaced.
Reply to
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Garcia at 4.
In Greenspan, the California appellate court
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discussed the doctrine of res judicata with regard to an issue
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that had not been considered in the original proceeding.
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Greenspan, 191 Cal.App.4th at 507 (noting that the party seeking
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to invoke the doctrine of res judicata “was not a party to that
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claim [decided in the earlier proceeding] and did not prevail on
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it”).
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to amend the judgment was precluded from doing so by its failure
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to raise the issue in the earlier proceeding.
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Cal.App.4th at 514.
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liability was expressly reached and rejected by the Court in its
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September 18, 2014 order.
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Plaintiff’s argument, as it “precludes a party to an action from
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relitigating in a second proceeding matters litigated and
See
Thus, the issue in Greenspan was whether the party seeking
Greenspan, 191
Here, the issue of Mr. Garcia's alter ego
Accordingly, res judicata is a bar to
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determined in a prior proceeding.”
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514.
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Greenspan, 191 Cal.App.4th at
To the extent that Plaintiff’s motion seeks a finding that
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Garcia is personally liable for the repayment of Fidelis’ and
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IDM’s debt, his motion is DENIED.
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Garcia personally liable for the debts of Fidelis and IDM, it
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need not consider Defendant Garcia’s argument that the entry of
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judgment in his favor divests the Court of jurisdiction over him.
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Garcia Special Opp. at 1.
As the Court does not find Mr.
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III.
ORDER
For the reasons set forth above, the Court GRANTS
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Plaintiff’s motion to the extent it seeks to fix the amount of
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damages against Defendant Fidelis at $1,053,438.49, and DENIES
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Plaintiff’s motion to the extent it seeks to hold Defendant
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Garcia personally liable for the debts of Fidelis and IDM:
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IT IS SO ORDERED.
Dated: March 2, 2015
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