This case was last updated from Los Angeles County Superior Courts on 06/28/2019 at 00:34:06 (UTC).

BIGFOOT VENTURES LTD VS NEXTENGINE INC

Case Summary

On 02/20/2015 BIGFOOT VENTURES LTD filed a Contract - Debt Collection lawsuit against NEXTENGINE INC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is MICHAEL JOHNSON. The case status is Disposed - Dismissed.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****3303

  • Filing Date:

    02/20/2015

  • Case Status:

    Disposed - Dismissed

  • Case Type:

    Contract - Debt Collection

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

MICHAEL JOHNSON

 

Party Details

Plaintiff and Cross Defendant

BIGFOOT VENTURES LTD.

Defendants and Cross Plaintiffs

DOES 1 THROUGH 10

NEXTENGINE INC.

Attorney/Law Firm Details

Plaintiff and Cross Defendant Attorneys

LAW OFFICES OF PETER K. MOROH

PETER K. MOROH LAW OFFICES OF

REICH RADCLIFFE & HOOVER LLP

Defendant and Cross Plaintiff Attorneys

J. KIM APLC

KIM JOHNNY

Other Attorneys

APLC J. KIM

 

Court Documents

Minute Order

3/12/2019: Minute Order

Writ - Return

4/15/2019: Writ - Return

REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION FOR STAY OF ENFORCEMENT OF JUDGMENT

2/2/2018: REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION FOR STAY OF ENFORCEMENT OF JUDGMENT

DECLARATION OF ADAM T. HOOVER IN SUPPORT OF BIGFOOT VENTURES, LTD.'S MOTION TO AMEND JUDGMENT

8/15/2018: DECLARATION OF ADAM T. HOOVER IN SUPPORT OF BIGFOOT VENTURES, LTD.'S MOTION TO AMEND JUDGMENT

Minute Order

5/15/2015: Minute Order

NOTICE OF CONTINUANCE OF CASE MANAGEMENT CONFERENCE

5/26/2015: NOTICE OF CONTINUANCE OF CASE MANAGEMENT CONFERENCE

Minute Order

10/6/2015: Minute Order

REQUEST FOR JUDICIAL NOTICE; DECLARATION OF PETER K MOROH

11/13/2015: REQUEST FOR JUDICIAL NOTICE; DECLARATION OF PETER K MOROH

NOTICE OF WITHDRAWAL OF MOTION FOR AWARD OF MANDATORY ATTORNEY'S FEES AND COSTS

12/23/2015: NOTICE OF WITHDRAWAL OF MOTION FOR AWARD OF MANDATORY ATTORNEY'S FEES AND COSTS

Minute Order

1/27/2016: Minute Order

NOTICE RE: CONTINUANCE OF HEARING

9/7/2016: NOTICE RE: CONTINUANCE OF HEARING

DEFENDANT NEXT ENGINE, INC. SEPARATE STATEMENT OF DISPUTED & UNDISPUTED MATERIAL FACTS IN OPPOSITION TO PLAINTIFF'S MOTION FOR SUMMARY ADJUDICATION

10/7/2016: DEFENDANT NEXT ENGINE, INC. SEPARATE STATEMENT OF DISPUTED & UNDISPUTED MATERIAL FACTS IN OPPOSITION TO PLAINTIFF'S MOTION FOR SUMMARY ADJUDICATION

STIPULATION AND ORDER TO USE CERTIFIED SHORTHAND REPORTER

2/27/2017: STIPULATION AND ORDER TO USE CERTIFIED SHORTHAND REPORTER

Minute Order

3/6/2017: Minute Order

DEFENDANT NEXTENGINE, INC.'S OBJECTIONS TO PLAINTIFF BIGFOOT VENTURES, LTD.'S PROPOSED JUDGMENT

3/17/2017: DEFENDANT NEXTENGINE, INC.'S OBJECTIONS TO PLAINTIFF BIGFOOT VENTURES, LTD.'S PROPOSED JUDGMENT

PROOF OF ELECTRONIC SERVICE

5/16/2017: PROOF OF ELECTRONIC SERVICE

DECLARATION OF JOSEPH R. ASHBY IN SUPPORT OF EX PARTE APPLICATION TO STAY OF ENFORCEMENT OF THE JUDGMENT AND TO VACATE THE APRIL 4, 2017 WRIT

7/7/2017: DECLARATION OF JOSEPH R. ASHBY IN SUPPORT OF EX PARTE APPLICATION TO STAY OF ENFORCEMENT OF THE JUDGMENT AND TO VACATE THE APRIL 4, 2017 WRIT

NOTICE DESIGNATING RECORD ON APPEAL

7/17/2017: NOTICE DESIGNATING RECORD ON APPEAL

139 More Documents Available

 

Docket Entries

  • 06/12/2019
  • at 08:30 AM in Department 56; Hearing on Motion to Amend Judgment (against Nextengine, Inc.) - Not Held - Continued - Court's Motion

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  • 06/12/2019
  • Minute Order ( (Hearing on Motion to Amend Judgment against Nextengine, Inc.)); Filed by Clerk

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  • 04/15/2019
  • Writ - Return

    Read MoreRead Less
  • 03/12/2019
  • at 08:30 AM in Department 56; Hearing on Motion to Amend Judgment (against Nextengine, Inc.) - Not Held - Continued - Court's Motion

    Read MoreRead Less
  • 03/12/2019
  • Order (re: PLAINTIFF'S MOTION TO AMEND JUDGMENT AGAINST NEXTENGINE INC.); Filed by Clerk

    Read MoreRead Less
  • 03/12/2019
  • Minute Order ( (Hearing on Motion to Amend Judgment against Nextengine, Inc.)); Filed by Clerk

    Read MoreRead Less
  • 02/27/2019
  • at 08:30 AM in Department 56; Hearing on Motion to Amend Judgment (against Nextengine, Inc.) - Not Held - Rescheduled by Court

    Read MoreRead Less
  • 02/19/2019
  • Notice Re: Continuance of Hearing and Order; Filed by Clerk

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  • 11/21/2018
  • at 08:30 AM in Department 56; Ex-Parte Proceedings

    Read MoreRead Less
  • 11/21/2018
  • at 08:30 AM in Department 56; Hearing on Motion to Amend Judgment (against Nextengine, Inc.) - Held - Continued

    Read MoreRead Less
272 More Docket Entries
  • 04/08/2015
  • NOTICE OF RELATED CASE

    Read MoreRead Less
  • 04/05/2015
  • Defendant's Demurrer; Filed by NextEngine, Inc. (Defendant)

    Read MoreRead Less
  • 02/27/2015
  • Notice of Case Management Conference; Filed by Clerk

    Read MoreRead Less
  • 02/27/2015
  • NOTICE OF CASE MANAGEMENT CONFERENCE

    Read MoreRead Less
  • 02/27/2015
  • NOTICE OF CASE MANAGEMENT CONFERENCE

    Read MoreRead Less
  • 02/23/2015
  • Proof-Service/Summons; Filed by Bigfoot Ventures, Ltd. (Plaintiff)

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  • 02/23/2015
  • PROOF OF SERVICE SUMMONS

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  • 02/20/2015
  • SUMMONS

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  • 02/20/2015
  • COMPLAINT FOR MONEY DUE ON DEFAULT OF PROMISSORY NOTE

    Read MoreRead Less
  • 02/20/2015
  • Complaint; Filed by Bigfoot Ventures, Ltd. (Plaintiff)

    Read MoreRead Less

Tentative Rulings

Case Number: BC573303    Hearing Date: February 07, 2020    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

BIGFOOT VENTURES, LTD.,

Plaintiff,

vs.

NEXTENGINE, INC.,

Defendant.

CASE NO.: BC573303

ORDER RE: PLAINTIFF’S MOTION TO AMEND JUDGMENT AGAINST NEXTENGINE, INC.

Date: February 7, 2020

Time: 8:30 a.m.

Dept. 56

MOVING PARTY: Plaintiff Bigfoot Ventures, Ltd.

RESPONDING PARTIES: Defendant Nextengine, Inc. (“Defendant”); Mark S. Knighton (“Knighton”); and ShapeTools, LLC (“ShapeTools”) (collectively, “Opponents”)

The Court has considered the moving, opposition, and reply papers.

BACKGROUND

Plaintiff filed a complaint that arises from the alleged failure to pay money due in connection with a promissory note (the “Note”). Plaintiff’s complaint alleges a cause of action for: (1) money due on default of promissory note.

Procedural History

Plaintiff filed a motion for summary adjudication on its sole cause of action. The Court granted Plaintiff’s motion for summary adjudication on its cause of action and ordered that Plaintiff was entitled to recover $7,925,990.00 from Defendant. Defendant then filed an ex parte request for reconsideration of the Court’s ruling with respect to the motion for summary adjudication, however, Defendant’s ex parte request for reconsideration was denied.

On March 16, 2017 judgment was entered in favor of Plaintiff and it was ordered that Plaintiff was to recover against Defendant NextEngine, Inc. (“Defendant”) the sum of $8,223,486.00. Plaintiff filed a motion to amend the Court’s March 16, 2017 judgment in this action to include nonparties ShapeTools, LLC (“ShapeTools”) and Mark Knighton (“Knighton”) as judgment debtors.

On November 21, 2018, this Court granted Defendant’s ex parte application to continue the hearing on Plaintiff’s motion to amend judgment due to a pending appeal. The appeal of the judgment in this action is no longer active. A copy of the Second District Court of Appeal opinion in connection with Defendant’s appeal was filed with this Court on November 6, 2019. The Second District Court of Appeal affirmed the trial court’s judgment. (See Status Report of Bigfoot Ventures, Ltd. Re: Status of Appeal at Exhibit B.)

On December 20, 2019, the Court held a hearing on Plaintiff’s motion to amend the judgment against Defendant. The Court ordered: (1) Defendant to e-file an additional brief by January 3, 2020; and (2) indicated that Plaintiff’s reply was due by January 24, 2020. While Defendant’s brief was filed on January 6, 2020 which is beyond the deadline indicated in the Court’s order, the Court will consider Defendant’s supplemental brief in opposition to Plaintiff’s motion to amend the judgment.

Plaintiff’s motion is made on the grounds that: (1) the Court has the authority to add nonparties to the judgment; (2) Knighton is the alter ego of Defendant; and (3) ShapeTools is merely a continuation of Defendant.

In its supplemental opposition brief, Opponents assert that: (1) Plaintiff’s motion must be denied because Plaintiff has concealed the existence of collateral that are the material assets of Defendant which constitutes a fraud upon the Court; (2) Plaintiff has not made a bona fide sale of the IP Collateral; (3) the Note terms expressly prohibit liability for officers of Defendant which must be upheld as a matter of equity[1]; and (4) ShapeTools has protected the IP Collateral assets held by Plaintiff, brought in capital to do so, and equitably preserved and enhanced Plaintiff’s security. In sum, Opponents assert that Plaintiff is deceiving the Court because Defendant’s entire portfolio of IP rights is Plaintiff’s collateral for the Note and such collateral is worth more than the judgment in this action. Plaintiff does not dispute that it holds Defendant’s IP Collateral or is in possession thereof; however, in its reply brief, Plaintiff asserts that: (1) Defendant received credit for the value of the intellectual property; and the (2) IP Collateral is worth nowhere close to $12,000,000.00.

Opponents’ supplemental brief in opposition to Plaintiff’s motion is completely void of citations to any legal authority. Opponents only make factual arguments without citations to applicable legal authority to either: (1) support the arguments advanced in their opposition papers; or (2) rebut the arguments set forth in Plaintiff’s motion. Contentions are deemed abandoned where party fails to provide applicable legal authority to support an argument. (Heglin v. F.C.B.A. Market (1945) 70 Cal.App.2d 803, 806.) This is because “[c]ontentions are waived when a party fails to support them with reasoned argument and citations to legal authority.” (Moulton Niguel Water Dist. v. Colombo (2003) 111 Cal.App.4th 1210, 1215.) The Court, moreover, fails to see how Plaintiff’s: (1) possessing the IP Collateral of Defendant; and (2) whether such IP Collateral is worth more than the judgment in this action is relevant to the motion, given Opponents’ failure to provide the Court with any relevant legal authority to support their arguments. The issue presented by Plaintiff’s motion is whether ShapeTools and Knighton should be added as judgment debtors via an amendment to the judgment in this action.

While the Court is cognizant of the lack of legal authority provided by Opponents, given that Plaintiff is seeking to add Knighton and ShapeTools as responsible parties to a multi-million-dollar judgment against Defendant, the Court will analyze Plaintiff’s motion and the arguments and evidence set forth by Opponents. The Court, however, fails to see how the arguments set forth in Opponents’ supplemental brief have any bearing on the Court’s analysis of whether Knighton and ShapeTools may or should be added as judgment debtors. As indicated above, Opponents have failed to provide this Court with citations to any legal authority to support their arguments set forth in their opposition.

The Prior Litigation Between the Parties

According to the remittitur filed on January 8, 2020 which affirmed the Court’s judgment in this action, in December 2009, Plaintiff filed suit against Defendant alleging causes of action for breach of the Note and Breach of the Mutual Release Agreement. (Remittitur at Page 5.) In response, Defendant filed a cross-complaint against Plaintiff for various causes of action. (Id.) The parties’ claims went before a jury and, at the conclusion of the jury trial in October 2011, the jury returned special verdict findings in favor of Defendant on: (1) Plaintiff’s claims for breach of the Note and breach of the Mutual Release Agreement. (Id. at 6.) The jury also returned special verdict findings in favor of Defendant on its cross-claims for failure to preserve collateral and improper disposition of collateral in violation of the UCC, and found that Defendant had suffered damages in the amount of $4,506,000.00. (Id.) In May 2012, the trial court entered a judgment in favor of Defendant on the jury’s special verdict, and ordered that Plaintiff would recover nothing from Defendant and that Defendant would recover the sum of $4,506,000.00 from Plaintiff. (Id.) Plaintiff appealed the Court’s May 2012 judgment and in December 2013, the Second District Court of Appeal affirmed the Court’s May 2012 judgment. (Id.)

EVIDENTIARY OBJECTIONS

The Court SUSTAINS all of Plaintiff’s evidentiary objections to the declaration of Mark S. Knighton (“Knighton”) in support of the supplemental brief in opposition to Plaintiff’s motion to amend the judgment.

DISCUSSION

California Code of Civil Procedure, Section 187 says that “[w]hen jurisdiction is, by the Constitution or this Code, or by any other statute, conferred on a Court or judicial officer, all the means necessary to carry it into effect are also given.” “Under section 187, the trial court is authorized to amend a judgment to add additional judgment debtors . . . [a]s a general rule, a court may amend its judgment at any time so that the judgment will properly designate the real defendants.” (Danko v. O’Reilly (2014) 232 Cal.App.4th 732, 735.) “Judgments may be amended to add additional judgment debtors on the ground that a person or entity is the alter ego of the original judgment debtor.” (Id. at 736.) “Amendment of a judgment to add an alter ego 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.” (Id.) “Such a procedure is an appropriate and complete method by which to bind new . . . 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.” (Id.) “The decision to grant an amendment in such circumstances lies in the sound discretion of the trial court. The greatest liberality is to be encouraged in the allowance of such amendments in order to see that justice is done.” (Id.)

“In order to prevail in a motion to add judgment debtors, [a party] must show that (1) the parties to be added as judgment debtors had control of the underlying litigation and were virtually represented in that proceeding; (2) there is such a unity of interest and ownership that the separate personalities of the entity and the owners no longer exist; and (3) an inequitable result will follow if the acts are treated as those of the entity alone.” (Relentless Air Racing, LLC v. Airborne Turbine Ltd. Partnership (2013) 222 Cal.App.4th 811, 815-816.) “It is well settled that when a corporation is used by an individual or individuals, or by another corporation, to perpetrate a fraud, circumvent a statute, or accomplish some other wrongful or inequitable purpose, a court may disregard the corporate entity and treat the acts as if they were done by the individuals themselves or by the controlling corporation . . . the court will disregard the fiction of corporate entity.” (McClellan v. Northridge Park Townhome Owners Ass’n, Inc. (2001) 89 Cal.App.4th 746, 752-753.) “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 an assumption; (2) the transaction amounts to the 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.” (Id.)

Plaintiff’s Evidence in Support of Amending the Judgment

Plaintiff presents evidence in the form of a declaration from its counsel of record, Adam T. Hoover (“Hoover”). Plaintiff presents evidence that: (1) in 2008, a promissory note (the “Note”) was entered into between Plaintiff and Defendant (Hoover Decl. at Exhibit 2); (2) Defendant agreed to pay Plaintiff the principal amount of 5.5 million euros plus interest (Id.); (3) in the instant action, on March 16, 2017, judgment was entered in favor Plaintiff and it was ordered and adjudged that Plaintiff would recover $8,223,486.00 against Defendant (Id. at Exhibit 3); and (4) Plaintiff’s complaint against Defendant was based on money due on default of the Note. (Id.).

Plaintiff presents evidence that: (1) Knighton formed Defendant in 2000 for the purpose of developing and producing 3D Scanner technology (Id., Exhibit 1 at 12: 11-19); (2) Knighton is the CEO of Defendant and has been such through its entire existence (Id. at 12:22-25); and (3) Knighton is the single largest shareholder of Defendant. (Id., Exhibit 1 at 13:19-21.)

Plaintiff also presents evidence that: (1) Knighton was the sole person responsible for responding to the complaint for Defendant (Id., Exhibit 1 at 10:19-24); (2) Knighton was the primary person deciding which attorneys to retain for Defendant, was consulting with counsel on how to respond to certain legal issues in this action, and was the primary individual within Defendant to decide on such actions (Id., Exhibit 1 at 11:11-12:5); (3) sales of 3D Scanners are being conducted by an authorized reseller—which is ShapeTools—under contract to Defendant (Id., Exhibit 1 at 19:1-4); (4) ShapeTools and Defendant entered into an agreement (the “ShapeTools Agreement”) which states that the purpose of such agreement is to “preserv[e] intellectual property and other assets produced, and to provide to Defendant shareholders and creditors certain protections, and additional security” (Id. at Exhibit 4); (5) the ShapeTools Agreement was signed by Knighton as CEO of both ShapeTools and Defendant (Id.); (6) via the ShapeTools Agreement, it was indicated that ShapeTools became the authorized re-seller of Defendant’s 3D Scanners (Id.); (7) the purpose of the ShapeTools Agreement was a protective measure as a necessity to the litigation brought by Plaintiff (Id., Exhibit 4 at ¶ 5); (8) the ShapeTools Agreement indicated that the litigation brought by Plaintiff was “a highly destructive act, which [would] damage the assets of Defendant” and damage the underlying equity and credit interests (Id.); and (9) the ShapeTools Agreement was not subject to shareholder vote and was done under the sole authority of Knighton. (Id., Exhibit 1 at 55:21-24.)

Plaintiff presents evidence that: (1) Defendant does not sell 3D Scanners and has not owned any 3D Scanner since the beginning of 2010 (Id., Exhibit 1 at 18:23-19:10); (2) the 3D Scanners have Defendant’s name on them and are sold via Defendant’s website (Id., Exhibit 1 at 39:24-40:5), however, all the revenue from 3D Scanner sales is diverted to ShapeTools (Id., Exhibit 1 at 42:20-43:8); (3) from January 1, 2013 through October 15, 2017, there were no net scanner sales made through Defendant (Id., Exhibit 1 at 40:23-41:10); (4) ShapeTools made approximately $10.8 Million in income from scanner sales from January 2013 thorough December 2017 (Id. at Exhibit 7); (5) during the same period from January 2013 through December 2017, Defendant received zero net revenues from the sale of 3D Scanners (Id. at Exhibit 8); (6) Knighton personally loaned money to Defendant to allow it to operate (Id., Exhibit 1 at 39:12-17); (7) the objective in setting up the arrangement where ShapeTools would sell Defendant’s 3D scanners was to preserve Defendant’s brand so that upon the resolution of litigation there would be recovery for all shareholders (Id., Exhibit 1 at 40:6-10); and (8) there has never been a shareholder meeting for Defendant. (Id., Exhibit 1 at 79:1-5.)

Opponents’ Evidence in Opposition to Plaintiff’s Motion

Opponents present the declaration of Knighton who declares that: (1) on June 2, 2008, Defendant and Plaintiff agreed to restructure the loan pursuant to six concurrently prepared and executed agreements (Knighton Decl. at ¶ 3); (2) as CEO of Defendant, he personally negotiated all six agreements which collectively comprise the 2008 Loan Agreement with Michael Gleissner, the sole principal of Plaintiff (Id. at ¶ 4 and Exhibits 1-6); (3) Plaintiff received a first position security interest in Defendant’s entire portfolio of intellectual properties to secure repayment of the Note (“IP Collateral”) (Id. at ¶ 5); (4) the IP Collateral was insulated from the potential of any competing creditor claims or interests and would automatically be under Plaintiff’s possession and control upon a default (Id. at ¶ 7); (5) since the time that judgment on the Note was entered in the instant action on March 16, 2017, Plaintiff has been entitled to sell the IP Collateral in good faith in a commercially reasonable manner to satisfy the judgment but has not done so (Id. at ¶ 9); (6) the Note terms prohibit liability for any stockholder, officer, or director arising from any amount due pursuant to the Note (Id. at ¶ 13); and (7) if he were personally liable for the corporate obligations of Defendant, he would not be able to sustain them and would be severely harmed which would affect his family, home, and livelihood (Id. at ¶ 22.)

Knighton also declares that: (1) he established ShapeTools to support Defendant and its IP Collateral during the period of litigation with Plaintiff (Id. at ¶ 23); (2) ShapeTools functions as a guarantor of Defendant’s creditor obligations and assumes liability for the operating costs and making and selling Defendant’s brand of 3D Scanners (Id. at ¶ 25); (3) he has personally raised funds and loaned ShapeTools more than $4 million to sustain its operation and perfect and maintain the IP Collateral and has loaned a similar amount to Defendant (Id. at ¶ 28); (4) ShapeTools has not deprived Plaintiff of any economic benefits contractually owed by Defendant but ShapeTools has actively worked to preserve assets that are Plaintiff’s security interest in its Note with Defendant (Id. at ¶ 29); and (5) the economic activity of ShapeTools has always been reported with the consolidated financial statements Defendant has provided to Plaintiff. (Id. at ¶ 30.)

Analysis with Respect to Adding Knighton as a Judgment Debtor

The Court finds that Plaintiff has presented sufficient evidence to show that Knighton is the alter ego of Defendant. The facts here are similar to the Relentless case. In Relentless, plaintiff moved to add two natural persons and two judgment debtors to a court judgment. The plaintiff in Relentless was unable to collect its obtained judgment from defendant. The motion to amend judgment in Relentless was based on postjudgment debtor examinations of Wayne and Linda Fulton who were the sole partners of defendant. In finding that Wayne and Linda Fulton were the alter egos of defendant, the Court indicated that: (1) the Fultons used defendant’s funds to pay their personal expenses; (2) since the underlying litigation, defendant had no substantial assets from which the judgment could be satisfied; (3) the Fultons are the sole general partners of defendant; (4) the Fultons are in complete control of defendant; and (5) it was highly unlikely that defendant would ever have the assets to satisfy the judgment.

Here, the Court finds that the evidence shows that adding Knighton as a judgment debtor is appropriate under Relentless. Knighton testified that: (1) he is the CEO of Defendant and has been throughout its entire existence; (2) he is the single largest shareholder of Defendant; (3) he was the only person responsible for responding to the complaint in this action and deciding how to respond to the issues in this action; (4) the ShapeTools Agreement was entered into due to the litigation in this action; (5) the purpose of the ShapeTools Agreement was for protective measures; (6) Defendant has never held a shareholder meeting; (7) he personally loaned money for Defendant to operate; (8) from January 2013 through December 2017, Defendant has received zero dollars in net revenue from the sale of 3D Scanners; and (9) from January 2013 through October 2017, Defendant made no net scanner sales itself. Moreover, the Court’s November 21, 2018 tentative ruling indicates that Defendant is totally without assets and cannot satisfy the judgment in this action. (Hoover Reply Decl. at Exhibit 6.) The Relentless factors are met here. Knighton had control of the litigation in this action since he was the sole person responsible, along with counsel, for making decisions with respect to the litigation. Given that Knighton testified to personally loaning funds to Defendant and is the largest shareholder and CEO of Defendant, the Court finds that there is a unity of interest and ownership. Lastly, the Court finds that not adding Knighton as a judgment debtor in this action would allow an inequitable result as Defendant has not made any net revenue, has not made a 3D scanner sale itself in years, and admittedly does not have the assets to satisfy the judgment against it.

Therefore, the Court finds it appropriate to amend the judgment in this action to add Knighton as a judgment debtor.

Analysis with Respect to Adding ShapeTools as a Judgment Debtor

The Court incorporates its recitation of the evidence above and applies it to its discussion with respect to amending the judgment to add ShapeTools as a judgment debtor in this action. The Court finds that under McClellan and based on the admissions by Knighton and the ShapeTools agreement itself, ShapeTools exists only as a response to the instant litigation. Thus, under the rule set forth in McClellan, ShapeTools exists only to shield Defendant from its debt arising from the judgment in this action. While Knighton declares that after judgment on the Note was entered in this action Plaintiff has been entitled to sell the IP Collateral in good faith to satisfy the judgment (Knighton Decl. at ¶ 9), none of the cited exhibits support this proposition. (Id. at ¶ 9 and Exhibits 9-11.)

Therefore, the Court finds that it is appropriate to amend the judgment in this action to add ShapeTools as a judgment debtor.

The Court exercises its discretion under Danko and GRANTS Plaintiff’s motion to amend the judgment against Defendant to add ShapeTools and Knighton as judgment debtors.

Moving party is ordered to give notice of this ruling.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Dated this 7th day of February 2020

Hon. Holly J. Fujie

Judge of the Superior Court


[1] The Court rejects Opponents’ argument on this point. California Civil Code, Section 1668 says that “[a]ll contracts which have for their object . . . to exempt anyone from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.”

Case Number: BC573303    Hearing Date: December 20, 2019    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

BIGFOOT VENTURES, LTD.,

Plaintiff,

vs.

NEXTENGINE, INC.,

Defendant.

CASE NO.: BC573303

[TENTATIVE] ORDER RE: PLAINTIFF’S MOTION TO AMEND JUDGMENT AGAINST NEXTENGINE, INC.

Date: December 20, 2019

Time: 8:30 a.m.

Dept. 56

Moving Party: Plaintiff Bigfoot Ventures, Ltd.

The Court has considered the moving papers. No opposition papers were filed, and no courtesy copy of any opposition papers were provided to the Court.

BACKGROUND

Plaintiff filed a complaint that arises from the alleged failure to pay money due in connection with a promissory note. Plaintiff’s complaint alleges causes of action for: (1) money due on default of promissory note.

On March 16, 2017, judgment was entered in favor of Plaintiff and it was ordered that Plaintiff was to recover against Defendant NextEngine, Inc. (“Defendant”) the sum of $8,223,486.00. Plaintiff filed a motion to amend the Court’s March 16, 2017 judgment in this action to include nonparties ShapeTools, LLC and Mark Knighton as judgment debtors.

On November 21, 2018, this Court granted Defendant’s ex parte application to continue the hearing on Plaintiff’s motion to amend judgment due to a pending appeal. The appeal of the judgment in this action is no longer active. A copy of the Second District Court of Appeal opinion in connection with Defendant’s appeal was filed with this Court on November 6, 2019. The Second District Court of Appeal affirmed the trial court’s judgment. (See Status Report of Bigfoot Ventures, Ltd. Re: Status of Appeal at Exhibit B.) Defendant failed to file an opposition to Plaintiff’s motion to amend the Court’s March 16, 2017 judgment in this action.

Due to Plaintiff’s motion being unopposed, the Court GRANTS Plaintiff’s motion to amend the judgment against Defendant. (Sexton v. Superior Court (1997) 58 Cal.App.4th 1403, 1410.)

Moving party is ordered to give notice of this ruling.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the

hearing, the motion will be placed off calendar.

Dated this 20th day of December 2019

Hon. Holly J. Fujie

Judge of the Superior Court