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Relentless Air Racing, LLC v. Airborne Turbine Ltd. Partnership

California Court of Appeal, Second District, Sixth Division

December 31, 2013

RELENTLESS AIR RACING, LLC, Plaintiff and Appellant,
v.
AIRBORNE TURBINE LTD. PARTNERSHIP, Defendant and Respondent.

Dodie A. Harman, Judge, Superior Court County of San Luis Obispo, (Super. Ct. No. CV090342).

Page 812

COUNSEL

[166 Cal.Rptr.3d 422] Adamski Moroski Madden Cumberland & Green, David M. Cumberland, San Luis Obispo, and Joshua M. George, for Plaintiff and Appellant.

Cox Wootton Griffin Hansen & Poulous and Rupert P. Hansen, San Francisco, for Defendant and Respondent.

OPINION

GILBERT, P. J.

Page 813

Relentless Air Racing, LLC (Relentless) obtained a money judgment against limited partnership, Airborne Turbine Ltd. Partnership (Airborne). Unable to collect the judgment, Relentless moved to add two natural persons and two corporations as judgment debtors. The trial court found that the natural persons and the corporations were the alter egos of Airborne. But the court denied the motion because it found Relentless failed to show that treating Airborne as a separate entity would lead to an inequitable result.

We reverse. Relentless cannot collect its judgment because Airborne is insolvent. Under the circumstances here, this is an inequitable result as a matter of law. ( Greenspan v. LADT LLC (2010) 191 Cal.App.4th 486, 508, 121 Cal.Rptr.3d 118 ( Greenspan ).) An inequitable result does not require a wrongful intent.

[166 Cal.Rptr.3d 423] FACTS

Relentless sued Airborne in a contract dispute involving the sale of an airplane. Relentless prevailed and the trial court awarded it $174,374.95 in attorney fees and $6,640.91 in costs.

Relentless has been unable to collect its judgment from Airborne. Relentless moved to amend the judgment to add Wayne and Linda Fulton, Airborne Turbine, Inc. (ATI), and Paradise Aero, Inc. (Paradise) as judgment debtors.[1] Relentless claims that Airborne, ATI, and Paradise are alter egos of the Fultons. The motion rested on the post-judgment debtor examinations of the Fultons.

The Fultons are Airborne's sole limited partners and they are the sole officers and directors of ATI and Paradise. ATI was Airborne's general partner until 2011, when Paradise became Airborne's general partner. Wayne Fulton testified that he and Linda Fulton decided to change general partners at the end of trial on the underlying action. Linda Fulton testified they made the decision to change general partners because " [w]e just wanted to keep ATI completely separate [from Airborne] and the trial."

Linda Fulton stated that Airborne had a good chance to succeed at the beginning of trial. But the jury instructions twisted the law against Airborne. She said, " [I]f I had been on that ...


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