Hall v. Apartment Investment and Management Company

Filing 233

ORDER by Judge Claudia Wilken DENYING 222 Defendants Ismael Avila and Moises Avila's Motion for Summary Judgment. (cwlc2, COURT STAFF) (Filed on 8/4/2011)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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GREGORY HALL, et al.,

No. C 08-03447 CW

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Plaintiffs,

ORDER DENYING
DEFENDANTS ISMAEL
AVILA AND MOISES
AVILA’S MOTION
FOR SUMMARY
JUDGMENT
(Docket No. 222)

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United States District Court
For the Northern District of California

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v.
APARTMENT INVESTMENT AND MANAGEMENT
COMPANY; AIMCO CAPITAL, INC.; FORTNEY
& WEYGANDT, INC.; IMR CONTRACTOR
CORPORATION; BAY BUILDING SERVICES;
BAY AREA CONSTRUCTION FRAMERS, INC.;
ALL HALLOWS PRESERVATION, LP; BAYVIEW
PRESERVATION, LP; LA SALLE
PRESERVATION, LP; SHOREVIEW
PRESERVATION, LP; ISMAEL AVILA; and
MOISES AVILA,

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Defendants.
/

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Plaintiffs Gregory Hall, Fausto Aguilar, Gonzalo Aguilar,

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Charles Chilton, Douglas Givens, Quincy Mouton, Richard Rankin,

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Hector Rodriguez, Arnulfo Carranza-Rivas and Terry Mackey seek to

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hold Defendants Ismael and Moises Avila liable for Defendant IMR

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Contractor Corporation’s alleged misconduct on an alter ego

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theory.1

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Plaintiffs have active claims, move for summary judgment.

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Plaintiffs oppose the motion.

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submission on the papers.

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The Avilas, who are the remaining Defendants against whom

The motion was taken under

To invoke California’s alter ego doctrine, a plaintiff must

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demonstrate two elements: “(1) such a unity of interest and

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ownership between the corporation and its equitable owner that no

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Plaintiffs’ claims against IMR are currently stayed pending
IMR’s bankruptcy.

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separation actually exists, and (2) an inequitable result if the

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acts in question are treated as those of the corporation alone.”

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Leek v. Cooper, 194 Cal. App. 4th 399, 417 (2011) (citing Sonora

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Diamond Corp. v. Superior Court, 83 Cal. App. 4th 523, 538 (2000)).

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Courts may consider several factors, including

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United States District Court
For the Northern District of California

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the unauthorized diversion of corporate funds or assets
to other than corporate uses; . . . the treatment by an
individual of the assets of the corporation as his
own; . . . the failure to maintain minutes or adequate
corporate records; . . . sole ownership of all of the
stock in a corporation by one individual or the members
of a family; . . . the diversion of assets from a
corporation by or to a stockholder or other person or
entity, to the detriment of creditors, or the
manipulation of assets and liabilities between entities
so as to concentrate the assets in one and the
liabilities in another.

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Leek, 194 Cal. App. 4th at 417 (citations omitted).

These factors

are not exhaustive, nor are any of them dispositive.

Id. at 418.

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Whether the alter ego doctrine applies is a question of fact.

Id.

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Plaintiffs proffer sufficient evidence to meet the first prong
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of the alter ego test.

The record shows that the Avilas owned and

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directed IMR; IMR made payments for properties it did not own; and
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the Avilas transferred IMR vehicles to Stronger Building Services,
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an entity owned by Moises Avila’s son and the Avilas’ sister.
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Further, there are inconsistencies as to whether corporate
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formalities were followed.

Based on this evidence, a jury could

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find a unity of interest between IMR and the Avilas.
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Plaintiffs also present sufficient evidence to meet the second
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prong of the alter ego test.

IMR declared bankruptcy approximately

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three months before trial.

This supports Plaintiffs’ contention

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that the Avilas purposely “positioned IMR for bankruptcy in order
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to discharge any liability for their misdeeds.”

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Thus, a jury could conclude that an inequitable result would occur

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if IMR’s corporate form is not disregarded.

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Opp’n at 20:25-26.

Accordingly, the Avilas’ motion for summary judgment is

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DENIED.

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sufficient to create a genuine dispute of material fact, Plaintiffs

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are granted ninety days to conduct discovery regarding their alter

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ego allegations.

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(Docket No. 222.)

Although the existing record is

The Court is inclined to bifurcate the trial in this action,

United States District Court
For the Northern District of California

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with the first trial addressing only Plaintiffs’ alter ego

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allegations.

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The parties are referred to Magistrate Judge Donna Ryu for a

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settlement conference.

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be held on October 11, 2011 at 2:00 p.m.

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A further case management conference will

IT IS SO ORDERED.

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Dated: August 4, 2011
CLAUDIA WILKEN
United States District Judge

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