This case was last updated from Los Angeles County Superior Courts on 02/21/2021 at 21:57:47 (UTC).

S.T.I. DEMOLITION, INC. VS THE BEDFORD GROUP, ET-AL

Case Summary

On 03/27/2009 S T I DEMOLITION, INC filed a Contract - Other Contract lawsuit against THE BEDFORD GROUP, ET-AL. This case was filed in Los Angeles County Superior Courts, Compton Courthouse located in Los Angeles, California. The Judges overseeing this case are ROSE HOM, LAW & MOTION, WILLIAM BARRY and MAURICE A. LEITER. The case status is Disposed - Judgment Entered.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****2945

  • Filing Date:

    03/27/2009

  • Case Status:

    Disposed - Judgment Entered

  • Case Type:

    Contract - Other Contract

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Compton Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

ROSE HOM

LAW & MOTION

WILLIAM BARRY

MAURICE A. LEITER

 

Party Details

Plaintiffs and Appellants

FULL SCALE DEMOLITION

S.T.I. DEMOLITION INC.

S.T.I. DEMOLITION INC. DBA FULL SCALE DEMOLITION

Defendants, Respondents and Cross Defendants

BEDFORD GROUP THE

CALVARY PALMS LLC

GUARANTEE COMPANY OF NORTH AMERICA USA

DOES 1 THROUGH 10

UNITED COMMERCIAL BANK

QUARLES CHARLES O.

QUARLES JO ANN

Defendant and Cross Plaintiff

GUARANTEE COMPANY OF NORTH AMERICA USA

Other

COMPTON SUPERIOR COURT

Not Classified By Court

KATZ HON. HERBERT

Attorney/Law Firm Details

Plaintiff Attorneys

WILKS ROBERT A. & ASSOCIATES

WARD JOHN PATRICK

Defendant and Cross Plaintiff Attorneys

STEVEN W. BURT

BOOTH MITCHEL & STRANGE LAW OFFICES OF

TOBIN & TOBIN

BURT STEVEN W.

Cross Defendant Attorney

BERGER MICHAEL JAY

 

Court Documents

Abstract of Judgment - Civil and Small Claims

4/30/2019: Abstract of Judgment - Civil and Small Claims

Memorandum of Costs After Judgment, Acknowledgment of Credit, and Declaration of Accrued Interest

5/15/2019: Memorandum of Costs After Judgment, Acknowledgment of Credit, and Declaration of Accrued Interest

Substitution of Attorney

5/15/2019: Substitution of Attorney

Writ of Execution

5/22/2019: Writ of Execution

Writ - Return

6/25/2019: Writ - Return

Writ - Return

7/30/2019: Writ - Return

Minute Order - MINUTE ORDER (HEARING ON APPLICATION FOR ORDER FOR APPEARANCE AND EXAMINATION)

9/26/2019: Minute Order - MINUTE ORDER (HEARING ON APPLICATION FOR ORDER FOR APPEARANCE AND EXAMINATION)

Declaration - DECLARATION OF JOHN P. WARD IN SUPPORT OF MOTION TO AMEND JUDGMENT

6/3/2020: Declaration - DECLARATION OF JOHN P. WARD IN SUPPORT OF MOTION TO AMEND JUDGMENT

Declaration - DECLARATION OF RALPH C. RODRIGUEZ IN SUPPORT OF MOTION TO AMEND JUDGMENT

6/3/2020: Declaration - DECLARATION OF RALPH C. RODRIGUEZ IN SUPPORT OF MOTION TO AMEND JUDGMENT

Request for Judicial Notice

6/3/2020: Request for Judicial Notice

Opposition - OPPOSITION CHARLES QUARLES'S OPPOSITION TO PLAINTIFF S.T.I DEMOLITION, INC. DBA FULL SCALE DEMOLITION'S MOTION TO AMEND THE JUDGMENT TO ADD CHARLES QUARLES AS A JUDGMENT DEBTOR; MEMORANDU

7/24/2020: Opposition - OPPOSITION CHARLES QUARLES'S OPPOSITION TO PLAINTIFF S.T.I DEMOLITION, INC. DBA FULL SCALE DEMOLITION'S MOTION TO AMEND THE JUDGMENT TO ADD CHARLES QUARLES AS A JUDGMENT DEBTOR; MEMORANDU

Reply - REPLY IN SUPPORT OF MOTION FOR AMENDED JUDGMENT; SUPPLEMENTAL DECLARATION OF JOHN P. WARD

7/30/2020: Reply - REPLY IN SUPPORT OF MOTION FOR AMENDED JUDGMENT; SUPPLEMENTAL DECLARATION OF JOHN P. WARD

Notice - NOTICE OF RENEWAL OF JUDGMENT

8/7/2020: Notice - NOTICE OF RENEWAL OF JUDGMENT

Application for and Renewal of Judgment

8/7/2020: Application for and Renewal of Judgment

Memorandum of Costs After Judgment, Acknowledgment of Credit, and Declaration of Accrued Interest

8/7/2020: Memorandum of Costs After Judgment, Acknowledgment of Credit, and Declaration of Accrued Interest

Proof of Service (Renewal of Judgment)

8/7/2020: Proof of Service (Renewal of Judgment)

Appeal - Notice of Appeal/Cross Appeal Filed

9/28/2020: Appeal - Notice of Appeal/Cross Appeal Filed

Appeal - Ntc Designating Record of Appeal APP-003/010/103

10/8/2020: Appeal - Ntc Designating Record of Appeal APP-003/010/103

23 More Documents Available

 

Docket Entries

  • 10/16/2020
  • DocketAppeal - Appendix CRC 8.124 Transcript Certified (NOA: 09/28/20 B307978); Filed by Clerk

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  • 10/08/2020
  • DocketAppeal - Ntc Designating Record of Appeal APP-003/010/103; Filed by S.T.I. DEMOLITION, INC. (Appellant)

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  • 09/29/2020
  • DocketNotice of Filing of Notice of Appeal (Unlimited Civil); Filed by Clerk

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  • 09/28/2020
  • DocketAppeal - Notice of Appeal/Cross Appeal Filed; Filed by S.T.I. DEMOLITION, INC. (Appellant)

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  • 08/07/2020
  • DocketProof of Service (Renewal of Judgment); Filed by S.T.I. DEMOLITION, INC. (Plaintiff)

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  • 08/07/2020
  • DocketMemorandum of Costs After Judgment, Acknowledgment of Credit, and Declaration of Accrued Interest; Filed by S.T.I. DEMOLITION, INC. (Plaintiff)

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  • 08/07/2020
  • DocketApplication for and Renewal of Judgment; Filed by S.T.I. DEMOLITION, INC. (Plaintiff)

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  • 08/07/2020
  • DocketNotice (of Renewal of Judgment); Filed by S.T.I. DEMOLITION, INC. (Plaintiff)

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  • 08/06/2020
  • Docketat 09:00 AM in Department A, Maurice A. Leiter, Presiding; Hearing on Motion to Amend Judgment - Held - Motion Denied

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  • 08/06/2020
  • DocketMinute Order ( (Hearing on Motion to Amend Judgment)); Filed by Clerk

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224 More Docket Entries
  • 04/29/2009
  • DocketAmendment to Complaint; Filed by FULL SCALE DEMOLITION (Legacy Party); S.T.I. DEMOLITION, INC. (Plaintiff)

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  • 04/09/2009
  • DocketProof-Service/Summons; Filed by Attorney for Plaintiff

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  • 04/09/2009
  • DocketProof-Service/Summons

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  • 04/07/2009
  • DocketProof-Service/Summons; Filed by S.T.I. DEMOLITION, INC. (Plaintiff)

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  • 04/07/2009
  • DocketProof-Service/Summons; Filed by Attorney for Plaintiff

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  • 04/07/2009
  • DocketProof-Service/Summons; Filed by S.T.I. DEMOLITION, INC. (Plaintiff)

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  • 03/27/2009
  • DocketComplaint; Filed by S.T.I. DEMOLITION, INC. (Plaintiff)

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  • 03/27/2009
  • DocketComplaint Filed

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  • 03/27/2009
  • DocketSummons; Filed by null

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  • 03/27/2009
  • DocketSummons Filed

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Tentative Rulings

Case Number: TC022945    Hearing Date: August 06, 2020    Dept: A

# 5. S.T.I. Demolition, Inc. v. The Bedford Group, et al.

Case No.: TC022945

Matter on calendar for: Motion to Amend Judgment

Tentative ruling:

  1. Background

Plaintiff S.T.I. Demolition, Inc. (“STI”), is a construction company that entered into a contract with defendant The Bedford Group, a property developer. STI performed under the contract but Bedford failed to remit payment. STI filed suit; after a 2011 bench trial, judgment was entered in favor of STI. STI’s April 30, 2019 Abstract of Judgment shows $108,863.70 is owed.

STI now moves to amend the judgment to add Charles Quarles as an additional defendant on the basis of alter-ego. The motion is opposed.

For the reasons set forth below, the Court denies the motion.

  1. Standard

Under Code of Civil Procedure § 187, “[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; and in the exercise of this jurisdiction, if the course of proceeding be not specifically pointed out by this Code or the statute, any suitable process or mode of proceeding may be adopted which may appear most conformable to the spirit of this Code.” “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.” (Hall, Goodhue, Haisley & Barker, Inc. v. Marconi Conf. Center Bd. (1996) 41 Cal.App.4th 1551, 1555.)

  1. Analysis

    1. Judicial notice, evidentiary objections, and notice

STI requests that the Court take judicial notice of Articles of Incorporation filed May 17, 2010 with the Secretary of State and of multiple recorded documents. STI also requests notice of various documents filed in its bankruptcy case. The Court grants the request. (Evid. Code, § 452(h).)

Quarles objects to the declarations of John Ward and Ralph Rodriguez. Quarles principal objection to the Rodriguez declaration is lack of personal knowledge and foundation under Evidence Code § 702. However, Rodriguez is the President of STI, negotiated the underlying contract, and participated in the litigation. The objections are overruled.

Attorney John Ward took Quarles’s debtor’s examination and recounts multiple statements made by Quarles. (Decl. Ward, ¶¶ 6–13, 17.) Quarles argues the statements are hearsay under Evidence Code § 1200, but this is unpersuasive. Quarles was the representative of Bedford with extensive managerial powers, and as such his statements constitute authorized party admissions. (Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486, 523–524; Evid. Code, § 1220.) Testimony given in debtor exams qualifies for the hearsay exception for party admissions. (Ibid.). These objections to Ward’s declaration are overruled.

This motion was filed on June 3, 2020, but was not served until July 13, 2020. Code of Civil Procedure § 1005(b) requires notice be served 16 court days before the hearing. When served by express mail, the notice period is extended by two days. STI served the motion and notice of motion via express mail 18 court days before the hearing, satisfying its notice requirements.

    1. Virtual representation

Adding an alter-ego judgment debtor under Code of Civil Procedure § 187 requires not only the elements of alter-ego, but that the party to be added “had control of the underlying litigation and [was] virtually represented. [Hall, Goodhue, Haisley & Barker, Inc. v. Marconi Conf. Center Bd. (1996) 41 Cal.App.4th 1551, 1555.]” (Greenspan, supra, 191 Cal.App.4th at 517.) “By definition, then, section 187 mandates that at least one alter ego individual or entity be a party to the earlier litigation.” (Ibid.)

At the debtor’s examination Quarles revealed that he is the principal of Bedford and has always owned 100% of its shares. (Decl. Ward, ¶ 6.) Further, Quarles negotiated the underlying contract on behalf of Bedford. (Decl. Rodriguez, ¶ 2.) In opposition, Quarles argues that his appearance and testimony at the trial does not support a finding of control over the litigation. (Opp. at 6.) This argument ignores that Quarles owned the entirety of Bedford’s shares. Quarles’s control of Bedford during the underlying litigation means he dominated the entity and had control over the litigation; the element of virtually representation is satisfied.

    1. Alter-ego

The elements of alter ego are "(1) such a unity of interest and ownership between the corporation and the equitable owner that no separation actually exists and (2) an inequitable result if the acts in question are treated as those of the corporation alone. [Citation.]" (Leek v. Cooper (2011) 194 Cal.App.4th 399, 417.)

The Court considers multiple factors when evaluating the unity of interest prong, including “ ‘the commingling of funds and assets . . . use of the same offices and employees, disregard of corporate formalities, identical directors and officers, and use of one as a mere shell or conduit for the affairs of the other. [Citation.]’ [Citation.]” (Highland Springs Conference & Training Center v. City of Banning (2016) 244 Cal.App.4th 267, 280–281 (Highland Springs).) “Inadequate capitalization of the original judgment debtor is another factor. [Citation.]” (Ibid.)

Quarles had complete control over Bedford and still conducts business out of Bedford’s 12400 Wilshire Blvd. office. (Decl. Ward, ¶ 7.) Bedford has had no employees since 2012. (Decl. Ward, ¶ 6.) Quarles utilizes a Bedford email address and maintains its website. (Decl. Ward, ¶¶ 7–8.) Quarles testified that Bedford sold all of its assets in 2012 and currently owns no assets. (Decl. Ward, ¶ 10.) Bedford’s books and records were destroyed when its accountant, James Williams, passed away and his landlord threw away the records. (Ibid.) Quarles testified that he works as a real estate consultant out of the Bedford office and that he maintains the website because it attracts clients to his consulting business. (Decl. Ward, ¶ 17.)

The principal issue here is whether Quarles diverted Bedford’s money to pay personal debts, thereby comingling business and personal assets. Bedford received a $17,000,000 arbitration award against Zurich Insurance. (Decl. Ward, ¶ 11.) Bedford’s attorney collected 40% of this sum, while an additional sum went to a line of credit owed to City National Bank. (Ibid.) $2,000,000 was used by Quarles to satisfy a loan to Hanmi Bank, which was in foreclosure and was secured by his personal residence on Kenway Drive, Los Angeles. (Decl. Ward, ¶ 12.) The transaction involved Hanmi’s selling the note to Quarles’s nephew, Darren Gooden, but Gooden did not pay for the note; instead Quarles funded the sale. (Decl. Ward, ¶ 13.)

In opposition, Quarles declares that the Hanmi loan was a Bedford business obligation. In 2006 Bedford was involved in the construction of a 91-unit condominium complex with Thomas Berkley Square Housing, LLC (“TBSH”). (Decl. Quarles, ¶¶ 3–4.) Hanmi agreed to extend a loan to TBSH for $37,250,000 provided that Quarles offer a personal guarantee in the form of a loan on his residence. TBSH subsequently defaulted, and the sale of the property resulted in a deficiency. Before foreclosure on the Kenway property, Quarles’s spouse, Jo Ann Quarles, filed for bankruptcy. (Decl. Quarles, ¶¶ 7–12.) During the bankruptcy, Hanmi and Quarles reached a settlement agreement with Hanmi wherein it would be paid $1,200,000 in satisfaction of its loan. (Decl. Quarles, ¶ 13.) Quarles eventually paid $1,000,000 from the settlement proceeds and The Gooden Group, Inc., paid the remaining $200,000. (Decl. Quarles, ¶¶ 14–15; Exh. B.)

The critical factors in an alter-ego analysis depend on the unique circumstances of the case. (Highland Springs, supra, 244 Cal.App.4th at 281.) The Court concludes that the Hanmi loan was a business obligation in nature, even though it was placed on Quarles’s personal residence.

In reply, STI points to Quarles’s 2014 declaration in the bankruptcy court stating that he planned to fund $1,000,000 of the $1,200,000 with a loan from The Gooden Group, Inc. (Supp. RJN, Exh. 15, pg. 9.) However, a wire transfer receipt was provided to the Court showing that the settlement funds went to pay for his business obligation. Additionally, STI’s suggestions as to a possibly remaining $1,000,000 are speculative.

Trial courts are encouraged to apply the “ ‘ “[t]he greatest liberality” ’ ” to “ ‘ “see that justice is done.” ’ ” (Highland Springs, supra, 244 Cal.App.4th at 281 citing Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 306.) However, alter-ego is an extreme remedy, its “ ‘standards . . . are high, and the imposition of [] liability . . . is to be exercised reluctantly and cautiously.’ [Citation.]” (Ibid.) The evidence before the Court does not show Quarles commingled business and personal assets. The elements of alter-ego liability have not been established.

  1. Ruling

    The motion to amend judgment is denied.

    Next dates:

    Notice:

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