APPEAL from a judgment of the Superior Court of Los Angeles County, Joseph DeVanon, Jr., Judge. (Los Angeles County Super. Ct. No. GC038415)
The opinion of the court was delivered by: Kriegler, J.
CERTIFIED FOR PARTIAL PUBLICATION*fn1
A creditor of a bankrupt corporation sought to recover payment in state court from an individual based on an alter ego theory of liability. The individual argued that the alter ego claim belonged to the bankruptcy estate, because it alleged general injuries to the corporation that could establish a basis of liability for all corporate debts, and therefore, the state court action should be stayed. The trial court allowed the action to proceed to trial and found in favor of the creditor. On appeal, the individual contends that the action should have been stayed and the trial court erred at trial.
In the published portion of this opinion, we conclude that the creditor's action to hold the individual liable as an alter ego for a creditor's substantive causes of action against a bankrupt corporation was not the property of the bankruptcy estate. In the unpublished portion of this opinion, we conclude that the record on appeal is inadequate to review the contentions of error at trial. We affirm.
FACTS AND PROCEDURAL BACKGROUND
Plaintiff and respondent Shaoxing County Huayue Import & Export delivered textile products to International Trade Center Ltd. (ITC). ITC failed to pay for the goods, causing damages of $291,612.80. On January 18, 2007, Shaoxing filed a complaint against ITC for breach of contract and common counts. Shaoxing filed an amended complaint on February 7, 2007, adding defendant and appellant Ranga Bhaumik.
The complaint alleged that Bhaumik was the alter ego of ITC as follows: "[T]here existed a unity of interest and control between [Bhaumik] and [ITC], such that any individuality and separateness between [Bhaumik] and the corporation had ceased, and that [ITC] is and was the alter ego of [Bhaumik], who is responsible for the above described conduct. [¶] Commencing on or about March 13, 1992, and at all times subsequent thereto, [ITC] was a mere shell and sham without capital, assets, or shareholders. The company was intended and used by [Bhaumik] as a device to avoid individual liability and for purposes of substituting a financially insolvent entity in place of himself. Adherence to the fiction of the separate existence for [ITC] as an entity distinct from [Bhaumik] would permit an abuse of the corporate privilege and would sanction a fraud in that [Bhaumik] caused the assets of [ITC] to be liquidated and distributed for his own benefit for purposes of avoiding and preventing attachment and execution by creditors, including [Shaoxing], thereby rendering the corporation insolvent and unable to meet its obligations."
In January 2009, ITC filed a Chapter 7 bankruptcy petition. ITC notified the trial court and Shaoxing of the bankruptcy filing. Shaoxing served a subpoena on ITC and a notice to produce documents at trial on Bhaumik. ITC's attorney informed Shaoxing that collection efforts, including the continuation of any lawsuits and trials, were automatically stayed as a result of the bankruptcy filing.
On March 5, 2009, Shaoxing filed a trial brief addressing the alter ego claim against Bhaumik. Shaoxing argued that the evidence would show Bhaumik did not adhere to the requirements necessary to maintain ITC's separate corporate existence. Bhaumik's deposition testimony revealed that he was the general manager of ITC, but he did not remember whether he had contributed any funds when he formed the company and did not know whether the company had any directors, filed tax returns, had a bank account, had by-laws or minutes, or had ever issued shares. He acknowledged that ITC did not have the money to purchase goods from Shaoxing. Shaoxing argued that the evidence met the requirements to apply the alter ego doctrine by showing the separate personalities of ITC and Bhaumik no longer existed, and if the acts were treated as those of the corporation alone, the result would be inequitable.
Shaoxing voluntarily dismissed ITC. In July 2009, Bhaumik filed a trial brief in propria persona. Bhaumik argued that actions against individual shareholders and directors of the corporation based on alter ego liability should be stayed, because only the bankruptcy trustee had standing to pursue the alter ego claim. Bhaumik cited several cases, including Steyr-Daimler-Puch of America Corp. v. Pappas (4th Cir. 1988) 852 F.2d 132 and In re Folks (9th Cir. 1997) 211 B.R. 378, for the proposition that general alter ego claims belong to the corporation and become part of the bankruptcy estate, such that individual creditors no longer have standing to maintain an alter ego action. Bhaumik also argued that ITC was an indispensable party and the voluntary dismissal of ITC made the alter ego claim moot. Bhaumik stated that the evidence at trial would show the corporate existence of ITC had been properly maintained.
The parties appeared in the trial court on July 21, 2009. The proceedings were not reported and no settled statement under California Rules of Court, rule 8.137, has been provided on appeal. The July 21, 2009 minute order states: "Matter is called for Hearing. Defendant's request to continue or stay trial is argued and denied. [¶] Both sides make an opening statement. [¶] David Ji is sworn and testifies for the plaintiff. [¶] Ranga Bhaumik is sworn and examined by the plaintiff pursuant to Evidence Code Section 776. [¶] Plaintiff's exhibits [a summary of unpaid invoices, two e-mails, sales confirmations and bills of lading ] are admitted into evidence. Plaintiff's exhibit [notice to produce documents at trial ] is marked for identification only. [¶] Both sides rest. Cause is argued. [¶] The court takes the matter under submission. Parties to be notified of the court's ruling via U.S. mail."
On July 28, 2009, the trial court found that ITC's obligation to pay for invoices totaling $291,612.80 was not contested. In addition, the court ruled as follows: "Defendant Bhaumik claims he has no individual responsibility for these claims. He asserts that [ITC] was a viable entity. However[,] he offers no evidence in support of his position. Plaintiff established that [ITC] was a corporation with only Mr. Bhaumik and his wife as shareholders, that nothing was paid for the shares, and that he can produce no records showing any financial actions of the corporation. Additionally, Bhaumik claims inability to produce bank account information [or] tax returns for I.T.C. He claims no knowledge of corporate meeting or minutes, is unable to produce any certificates showing issuance of stock. [¶] The court is satisfied by a preponderance of the evidence that defendant Bhaumik failed to maintain the corporate existence of [ITC] in anything but its name. Accordingly[,] judgment is entered against Ranga L. Bhaumik individually in the amount of $291,612.80 plus costs."
On August 31, 2009, the trial court entered judgment against Bhaumik in the amount of $291,612.80 plus costs. Bhaumik ...