abuse of the corporate privilege in California

2026“Ordinarily, a corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations.” (Sonora Diamond Corp v. Superior Court (2000) 83 Cal.App.4th 523, 538 (Sonora).) But under the alter ego doctrine, “[a] corporate identity may be disregarded — the ‘corporate veil’ pierced — where an abuse of the corporate privilege justifies holding the 6 equitable ownership of a corporation liable for the actions of the corporation.” (Id. at p. 538.) The doctrine “is an extreme remedy, sparingly used.” (Id. at

2025A. Legal Principles “Ordinarily a corporation is considered a separate legal entity, distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations. [Citation.] The same is true of a limited liability company (LLC) and its members and managers.” (Curci Investments, LLC v. Baldwin (2017) 14 Cal.App.5th 214, 220 (Curci Investments).) However, “[a] corporate identity may be disregarded—the ‘corporate veil’ pierced— where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corpo

2023The law The Supreme Court tells us that “[t]he essence of the alter ego doctrine is that justice be done. ‘What the formula comes down to, once shorn of verbiage about control, instrumentality, agency, and corporate entity, is that liability is imposed to reach 9 an equitable result.’ ” (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 301 (Mesler).) Another court explains the equitable doctrine: “ ‘A corporate identity may be disregarded—the “corporate veil” pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions

2023The law The Supreme Court tells us that “[t]he essence of the alter ego doctrine is that justice be done. ‘What the formula comes down to, once shorn of verbiage about control, instrumentality, agency, and corporate entity, is that liability is imposed to reach 9 an equitable result.’ ” (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 301 (Mesler).) Another court explains the equitable doctrine: “ ‘A corporate identity may be disregarded—the “corporate veil” pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions

2023The law The Supreme Court tells us that “[t]he essence of the alter ego doctrine is that justice be done. ‘What the formula comes down to, once shorn of verbiage about control, instrumentality, agency, and corporate entity, is that liability is imposed to reach 9 an equitable result.’ ” (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 301 (Mesler).) Another court explains the equitable doctrine: “ ‘A corporate identity may be disregarded—the “corporate veil” pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions

2023The law The Supreme Court tells us that “[t]he essence of the alter ego doctrine is that justice be done. ‘What the formula comes down to, once shorn of verbiage about control, instrumentality, agency, and corporate entity, is that liability is imposed to reach 9 an equitable result.’ ” (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 301 (Mesler).) Another court explains the equitable doctrine: “ ‘A corporate identity may be disregarded—the “corporate veil” pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions

1988Elliot Air had been named as a defendant in the original complaint and had been served and had appeared in the action. 3 The Purpose and Effect of the Alter Ego Doctrine “The figurative terminology ‘alter ego’ and ‘disregard of the corporate entity’ is generally used to refer to the various situations that are an abuse of the corporate privilege.” (Minton v. Cavaney (1961) 56 Cal.2d 576, 579 [ 15 Cal.Rptr. 641 , 364 P.2d 473 ].) The purpose behind the alter ego doctrine is to prevent defendants who are the alter egos of a sham corporation from escaping personal liability for its debts.

1988Elliot Air had been named as a defendant in the original complaint and had been served and had appeared in the action. 3 The Purpose and Effect of the Alter Ego Doctrine “The figurative terminology ‘alter ego’ and ‘disregard of the corporate entity’ is generally used to refer to the various situations that are an abuse of the corporate privilege.” (Minton v. Cavaney (1961) 56 Cal.2d 576, 579 [ 15 Cal.Rptr. 641 , 364 P.2d 473 ].) The purpose behind the alter ego doctrine is to prevent defendants who are the alter egos of a sham corporation from escaping personal liability for its debts.

2026“Ordinarily, a corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations.” (Sonora Diamond Corp v. Superior Court (2000) 83 Cal.App.4th 523, 538 (Sonora).) But under the alter ego doctrine, “[a] corporate identity may be disregarded — the ‘corporate veil’ pierced — where an abuse of the corporate privilege justifies holding the 6 equitable ownership of a corporation liable for the actions of the corporation.” (Id. at p. 538.) The doctrine “is an extreme remedy, sparingly used.” (Id. at

2021The Trial Court Did Not Err in Adding Enright as a Judgment Debtor A. Law and Standard of Review “Ordinarily, a corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations,” but a “corporate identity may be disregarded—the ‘corporate veil’ pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538 ; see also Aljabban v. Fontan

2021(Las Palmas, supra, 235 Cal.App.3d at p. 1248 ; Stark v. Coker (1942) 20 Cal.2d 839, 846 [“the doctrine is essentially an equitable one and for that reason is particularly within the province of the trial court”].) The doctrine pierces a corporation’s ordinary status as a legal entity distinct from its shareholders, officers, and directors “where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.” (Sonora Diamond, supra, 83 Cal.App.4th at p. 538 .) “Under the alter ego doctrine, . . . when the corporate form

2021(Las Palmas, supra, 235 Cal.App.3d at p. 1248 ; Stark v. Coker (1942) 20 Cal.2d 839, 846 [“the doctrine is essentially an equitable one and for that reason is particularly within the province of the trial court”].) The doctrine pierces a corporation’s ordinary status as a legal entity distinct from its shareholders, officers, and directors “where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.” (Sonora Diamond, supra, 83 Cal.App.4th at p. 538 .) “Under the alter ego doctrine, . . . when the corporate form

2025A. Legal Principles “Ordinarily a corporation is considered a separate legal entity, distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations. [Citation.] The same is true of a limited liability company (LLC) and its members and managers.” (Curci Investments, LLC v. Baldwin (2017) 14 Cal.App.5th 214, 220 (Curci Investments).) However, “[a] corporate identity may be disregarded—the ‘corporate veil’ pierced— where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corpo

2023When it is abused it will be disregarded and the corporation looked at as a collection or association of individuals, so that the corporation will be liable for acts of the stockholders or the stockholders liable for acts done in the name of the corporation.’” (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 300 ; see Lopez v. Escamilla (2022) 79 Cal.App.5th 646 , 650; Curci Investments, LLC v. Baldwin (2017) 14 Cal.App.5th 214, 221 (Curci); Leek v. Cooper (2011) 194 Cal.App.4th 399, 411 (Leek); see also Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538 [“A corporate i

2022Applicable law and standard of review “Ordinarily, a corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations. [Citations.] A corporate identity may be disregarded—the ‘corporate veil’ pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538 .) “ ‘Alter ego is an extreme remedy, sparingly used. [Citation.]’ [Citations.]”

2021(Las Palmas, supra, 235 Cal.App.3d at p. 1248 ; Stark v. Coker (1942) 20 Cal.2d 839, 846 [“the doctrine is essentially an equitable one and for that reason is particularly within the province of the trial court”].) The doctrine pierces a corporation’s ordinary status as a legal entity distinct from its shareholders, officers, and directors “where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.” (Sonora Diamond, supra, 83 Cal.App.4th at p. 538 .) “Under the alter ego doctrine, . . . when the corporate form

2021(Las Palmas, supra, 235 Cal.App.3d at p. 1248 ; Stark v. Coker (1942) 20 Cal.2d 839, 846 [“the doctrine is essentially an equitable one and for that reason is particularly within the province of the trial court”].) The doctrine pierces a corporation’s ordinary status as a legal entity distinct from its shareholders, officers, and directors “where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.” (Sonora Diamond, supra, 83 Cal.App.4th at p. 538 .) “Under the alter ego doctrine, . . . when the corporate form

2014(See Minifie v. Rowley (1921) 187 Cal. 481 , 487–488.) “Alter ego is an extreme remedy, sparingly used.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 539 (Sonora Diamond); Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220, 1249 (Las Palmas).) “Ordinarily, a corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations. [Citations.] A corporate identity may be disregarded—the ‘corporate veil’ pierced—where an abuse of the corporate privile

2023(Cf. Krantz v. BT Visual Images (2001) 89 Cal.App.4th 164, 173 [declarations from attorneys and a company executive “stating that the alter ego and agency allegations of the amended complaint were untrue” did not shift the burden of proof to the plaintiff].) Straiton did not meet his responsive burden.

2023There are, nevertheless, two general requirements: ‘(1) that there be such unity of interest 13 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.’” (Mesler, at p. 300; see Curci, at p. 221; Leek, at p. 411; Sonora Diamond Corp., at p. 538.) “‘Among the factors to be considered in applying the doctrine are commingling of funds and other assets of the two entities, the holding out by one entity that it is liable for the debts of the other,

2023When it is abused it will be disregarded and the corporation looked at as a collection or association of individuals, so that the corporation will be liable for acts of the stockholders or the stockholders liable for acts done in the name of the corporation.’” (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 300 ; see Lopez v. Escamilla (2022) 79 Cal.App.5th 646 , 650; Curci Investments, LLC v. Baldwin (2017) 14 Cal.App.5th 214, 221 (Curci); Leek v. Cooper (2011) 194 Cal.App.4th 399, 411 (Leek); see also Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538 [“A corporate i

2022Applicable law and standard of review “Ordinarily, a corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations. [Citations.] A corporate identity may be disregarded—the ‘corporate veil’ pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538 .) “ ‘Alter ego is an extreme remedy, sparingly used. [Citation.]’ [Citations.]”

2022Applicable law and standard of review “Ordinarily, a corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations. [Citations.] A corporate identity may be disregarded—the ‘corporate veil’ pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538 .) “ ‘Alter ego is an extreme remedy, sparingly used. [Citation.]’ [Citations.]”

2021(Las Palmas, supra, 235 Cal.App.3d at p. 1248 ; Stark v. Coker (1942) 20 Cal.2d 839, 846 [“the doctrine is essentially an equitable one and for that reason is particularly within the province of the trial court”].) The doctrine pierces a corporation’s ordinary status as a legal entity distinct from its shareholders, officers, and directors “where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.” (Sonora Diamond, supra, 83 Cal.App.4th at p. 538 .) “Under the alter ego doctrine, . . . when the corporate form

2021The Trial Court Did Not Err in Adding Enright as a Judgment Debtor A. Law and Standard of Review “Ordinarily, a corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations,” but a “corporate identity may be disregarded—the ‘corporate veil’ pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538 ; see also Aljabban v. Fontan

2013(Mendoza v. Town of Ross (2005) 128 Cal.App.4th 625, 631 [―We affirm if any ground offered in support of the demurrer was well taken . . . . [Citations.] We are not bound by the trial court‘s stated reasons, if any, supporting its ruling; we review the ruling, not its rationale. [Citation.]‖].) 16 First, there must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist.

2000(Wenban Estate, Inc. v. Hewlett (1924) 193 Cal. 675, 696 [ 227 P. 723 ]; Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 993 [ 41 Cal.Rptr.2d 618 ]; Robbins v. Blecher (1997) 52 Cal.App.4th 886, 892 [ 60 Cal.Rptr.2d 815 ].) A corporate identity may be disregarded—the “corporate veil” pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.

2000(Wenban Estate, Inc. v. Hewlett (1924) 193 Cal. 675, 696 [ 227 P. 723 ]; Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 993 [ 41 Cal.Rptr.2d 618 ]; Robbins v. Blecher (1997) 52 Cal.App.4th 886, 892 [ 60 Cal.Rptr.2d 815 ].) A corporate identity may be disregarded—the “corporate veil” pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.

2000(Wenban Estate, Inc. v. Hewlett (1924) 193 Cal. 675, 696 [ 227 P. 723 ]; Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 993 [ 41 Cal.Rptr.2d 618 ]; Robbins v. Blecher (1997) 52 Cal.App.4th 886, 892 [ 60 Cal.Rptr.2d 815 ].) A corporate identity may be disregarded—the “corporate veil” pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.

2000(Wenban Estate, Inc. v. Hewlett (1924) 193 Cal. 675, 696 [ 227 P. 723 ]; Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 993 [ 41 Cal.Rptr.2d 618 ]; Robbins v. Blecher (1997) 52 Cal.App.4th 886, 892 [ 60 Cal.Rptr.2d 815 ].) A corporate identity may be disregarded—the “corporate veil” pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.

2000(Roman Catholic Archbishop v. Superior Court (1971) 15 Cal.App.3d 405, 411 [ 93 Cal.Rptr. 338 ].) Under the alter ego doctrine, then, when the corporate form is used to perpetrate a fraud, circumvent a statute, or accomplish some other wrongful or inequitable purpose, the courts will ignore the corporate entity and deem the corporation’s acts to be those of the persons or organizations actually controlling the corporation, in most instances the equitable owners.

2000(Roman Catholic Archbishop v. Superior Court (1971) 15 Cal.App.3d 405, 411 [ 93 Cal.Rptr. 338 ].) Under the alter ego doctrine, then, when the corporate form is used to perpetrate a fraud, circumvent a statute, or accomplish some other wrongful or inequitable purpose, the courts will ignore the corporate entity and deem the corporation’s acts to be those of the persons or organizations actually controlling the corporation, in most instances the equitable owners.

2000(Wenban Estate, Inc. v. Hewlett (1924) 193 Cal. 675, 696 [ 227 P. 723 ]; Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 993 [ 41 Cal.Rptr.2d 618 ]; Robbins v. Blecher (1997) 52 Cal.App.4th 886, 892 [ 60 Cal.Rptr.2d 815 ].) A corporate identity may be disregarded—the “corporate veil” pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.

2000(Wenban Estate, Inc. v. Hewlett (1924) 193 Cal. 675, 696 [ 227 P. 723 ]; Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 993 [ 41 Cal.Rptr.2d 618 ]; Robbins v. Blecher (1997) 52 Cal.App.4th 886, 892 [ 60 Cal.Rptr.2d 815 ].) A corporate identity may be disregarded—the “corporate veil” pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.

1995Rather, the issue is ‘whether in the particular case presented and for the purpose of such case justice and equity can best be accomplished and fraud and unfairness defeated by a disregard of the distinct entity of the corporate form.’ ” (9 Witkin, Summary of Cal. Law (9th ed. 1989) Corporations, § 12, pp. 524-525, citing Kohn v. Kohn (1950) 95 Cal.App.2d 708, 718 [ 214 P.2d 71 ], italics omitted.) Here, Poway alleged any separateness between Chubby’s and Lebastchi ceased to exist because Lebastchi exercised complete control of the corporation, he failed to observe corporate formalities, inade

1995Rather, the issue is ‘whether in the particular case presented and for the purpose of such case justice and equity can best be accomplished and fraud and unfairness defeated by a disregard of the distinct entity of the corporate form.’ ” (9 Witkin, Summary of Cal. Law (9th ed. 1989) Corporations, § 12, pp. 524-525, citing Kohn v. Kohn (1950) 95 Cal.App.2d 708, 718 [ 214 P.2d 71 ], italics omitted.) Here, Poway alleged any separateness between Chubby’s and Lebastchi ceased to exist because Lebastchi exercised complete control of the corporation, he failed to observe corporate formalities, inade

1988(Hiehle v. Torrance Millworks, Inc. (1954) 126 Cal.App.2d 624, 629 [ 272 P.2d 780 ].) The device of disregarding the corporate entity is applicable whether the alter ego is an individual or corporation.

1988(Hiehle v. Torrance Millworks, Inc. (1954) 126 Cal.App.2d 624, 629 [ 272 P.2d 780 ].) The device of disregarding the corporate entity is applicable whether the alter ego is an individual or corporation.