Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment and order of the Superior Court of Los Angeles County, No. NC041435, Elizabeth Allen White, Judge.
Law Offices of Kimberly J. Laliberte, Kimberly J. Laliberte; and Jerome Bradford for Plaintiff and Appellant and Cross-defendants and Appellants.
Palmer, Lombardi & Donohue, Thomas E. Lombardi and Frederick A. Haist for Defendants and Respondents and Cross-complainant and Respondent.
CROSKEY, J.
Stephanie Miller and New Vision Residential Care Center, Inc. (New Vision), appeal a judgment and the denial of their motion for judgment notwithstanding the verdict. The judgment denies Miller relief on her complaint against Karen Chavez and Norman Chavez pursuant to a pretrial order granting summary adjudication, and awards Karen Chavez $24,362 in damages against Miller and $7,438 in damages against New Vision on the Chavezes’ cross-complaint. Miller’s principal contentions are that there was no proper basis for summary adjudication, that the evidence is insufficient to support an implied finding that she was New Vision’s alter ego, and that the court erred in awarding attorney fees to the Chavezes as prevailing parties.
Although named as an appellant, New Vision does not challenge the judgment against it.
We conclude that the summary adjudication was proper. We also conclude that there is no substantial evidence to support the alter ego finding and therefore no basis for Miller’s liability on the cross-complaint. We conclude further that Miller is not entitled to judgment notwithstanding the verdict and that a complete new trial on the cross-complaint against both Miller and New Vision is required. We therefore will reverse the judgment and affirm the order denying the motion for judgment notwithstanding the verdict.
FACTUAL AND PROCEDURAL BACKGROUND
1. Purchase and Sale Agreements
Miller owned real property located at 14902 Touchwood Avenue in Bellflower, California. New Vision leased the property from Miller and operated a residential care facility for developmentally disabled adults on the site. Miller is the chief executive officer of New Vision.
The Chavezes offered to purchase the real property from Miller for $530,000 in a written offer signed on November 18, 2004. The offer was on a California Association of Realtors form entitled California Residential Purchase Agreement and Joint Escrow Instructions. Miller accepted the offer by countersigning it on that same date. The agreement provided for escrow to close in 30 days.
The parties also agreed to the sale of the business operating on the property for $76,500. The agreement bore Miller’s personal letterhead and stated:
“November 15, 2004
“Offer for the sale of the business located at 14902 Touchwood Avenue, Bellflower, Ca 90706.
“The seller is asking for an all cash deal in the amount of $76,500.00 dollars to be paid in full at the close of escrow in a separate transaction from the real estate transaction. The seller will not assist with the financing of the purchase of this business.
“Furthermore, the sale of this business is totally contingent upon Karen Chavez closing escrow on the real estate transaction located at 14902 Touchwood Avenue, Bellflower, CA 90706.
“It is not the intention of the seller to sell the business without simultaneously selling the real estate, which is associated with the business.
“Sell of the business will not include office machines, expressly: Computers, fax machines, Wheelchair scale or copiers. All other equipment shall be sold ‘as is’.
“Disclaimer: I do not guarantee that the clients who are now residing in the facility will remain there during or after the sale of the business.”
Miller signed the agreement as “Seller,” and the Chavezes signed as “Buyer,” on November 18, 2004.
Miller’s brother, Keith Stewart, acted as a loan broker on behalf of the Chavezes in connection with the real property purchase. On December 27, 2004, Karen Chavez received a copy of an appraisal stating that the value of the real property as of November 29, 2004, was $499,000. She expressed no concern at that time.
2. Interim Management Agreement and Lease Agreement
New Vision and Karen Chavez entered into an Interim Management Agreement Preparatory to a New License, on January 1, 2005. The agreement stated that the parties to the agreement were New Vision, defined as “Licensee,” and Karen Chavez, defined as “Manager.” The agreement stated that Karen Chavez would apply to the Department of Social Services for a license to operate the adult residential care facility and that, until she received her license, she would manage the operation of the facility for Miller. The agreement stated that Karen Chavez as manager was responsible to pay for all current operating expenses and was entitled to receive all current revenues. On the signature page, Miller’s signature appears after the word “Licensee” with no express indication that she was acting on behalf of New Vision. Chavez’s signature appears after the word “Manager.”
New Vision and the Chavezes also entered into an agreement on January 5, 2005, that the Chavezes as the new owners of the real property would lease the property to New Vision for $1 per month. The agreement stated that the parties to the agreement were New Vision and the Chavezes. Miller’s signature appears on the signature line with no express indication that she was acting on behalf of New Vision. Miller told Karen Chavez at the time that the $1 lease was a “ceremonial document.”
The written lease stated that its term was one year. The Chavezes testified that they had signed a six-month lease and that the purported one-year lease was a forgery.
3. Subsequent Events
Miller advised the Department of Social Services on January 12, 2005, that she was selling the residential care business to Karen Chavez and also advised the department of the real property sale and leaseback arrangement. The real property sale escrow closed on January 14, 2005, and a grant deed to the Chavezes was recorded on that date.
Karen Chavez called Miller on January 20, 2005, to express concern that the $530,000 sales price for the real property exceeded the appraised value of $499,000. They contacted Stewart, who that same day provided a new appraisal dated January 20, 2005, stating that the value of the real property as of November 29, 2005, was $530,000. In the days that followed, Karen Chavez expressed concern regarding the discrepancy between the two appraisals. Miller demanded payment of $76,500 for the sale of the business. Karen Chavez refused to pay until her concerns were addressed. Miller responded by ousting Karen Chavez as manager of the facility.
Miller sent a letter to Karen Chavez on January 26, 2005, stating that the business sale agreement expressly stated that the business sale would occur simultaneously with the real property sale. Miller stated that Karen Chavez had breached the business sale agreement by refusing to pay for the business, and that Miller therefore was terminating the interim management agreement. Miller stated further that she would continue to occupy the property under the $1 lease. She advised the Department of Social Services on January 31, 2005, that her prior notice of intent to sell the residential care business to Karen Chavez was “rescinded” and that New Vision would continue to occupy the property.
Miller sent a letter to Karen Chavez on February 5, 2005, demanding that Karen Chavez cease her management of the residential care facility and have no further contact with the residents. Karen Chavez complied. Miller took over the management of the facility and continued to operate the facility on the property until January 2006 while tendering to the Chavezes $1 per month for rent. Miller closed the facility and vacated the property in January 2006.
4. Complaint and Cross-complaint
Miller filed a complaint against the Chavezes in June 2005, alleging that the sale of the real property was conditioned on the sale of the business and that the Chavezes breached the real property sale agreement and business sale agreement by failing to tender payment for the business purchase. Miller alleges further that the Chavezes falsely promised to purchase the business in order to induce her to sell the real property. Miller alleges counts for (1) breach of the two sales contracts, (2) false promise, and (3) rescission of the real property sales contract based on fraud. The caption of the complaint also lists counts for (4) “Declaratory Relief” and (5) “Punitive Damages,” although those counts are not alleged in the body of the complaint.
The Chavezes filed a cross-complaint against Miller and New Vision in September 2005. They alleged that Miller was New Vision’s alter ego. They alleged that the real property sale was contingent on an appraisal showing that the property was worth $530,000. They alleged that Miller obtained a $499,000 appraisal and three weeks later obtained a $530,000 appraisal, both from the same appraiser, and failed to disclose the lower appraisal to them. They also alleged that Miller failed to disclose that the adult residential care facility had received a grant that restricted the sale of the business and that the business would lose certain payments if it were sold. Their amended cross-complaint filed in August 2006 alleges counts for (1) fraudulent concealment; (2) rescission of the business sales contract, interim management agreement, and lease; (3) cancellation of the lease; (4) unjust enrichment; (5) money had and received; (6) quantum valebant; (7) declaratory relief; (8) promissory estoppel; and (9) breach of an employment contract.
5. Summary Adjudication
The Chavezes moved for summary judgment or summary adjudication against the counts alleged in Miller’s complaint in May 2006. They argued as to Miller’s first count for breach of contract that Health and Safety Code section 1524.1 required 60 days’ written notice to the Department of Social Services before the adult residential care business or the real property could be sold, and that 60 days had not elapsed from the time of Miller’s notice to the department of her intent to sell the business to the time of her notice to Karen Chavez of the purported breach or the time of her notice to the department rescinding the notice of intent to sell. The Chavezes argued that because the 60-day period had not expired, their performance was not due and they were not in breach. They also argued as to Miller’s first count that Miller waived any breach of the business sales contract by paying rent to the Chavezes and accepting the benefits of the lease agreement after the time that she claimed the business was supposed to have been sold.
The Chavezes argued as to Miller’s second count for false promise and third count for rescission that Miller’s discovery responses showed that she had no evidence to support her claim that the Chavezes had no intention of performing their promise to purchase the business. They also argued as to Miller’s third count that the sale of the real property was not contingent on the sale of the business, and that if any such condition existed it was unenforceable because it was not in writing. The Chavezes argued as to the fourth and fifth counts listed in the caption of Miller’s complaint that she was entitled to no relief because she failed to allege those counts in the body of her complaint.
Miller opposed the motion, but did not request leave to amend the complaint. The Chavezes objected to evidence submitted by Miller. The trial court granted summary adjudication against Miller’s second through fifth counts in July 2006, and continued the hearing on the motion as to the first count. The court also ruled on the Chavezes’ evidentiary objections. After further briefing by the parties, the court in a minute order granted summary adjudication against the first count and stated that the motion for “Summary Judgment” was granted “in its entirety.”
The signed Order Granting Summary Judgment filed in August 2006 stated with respect to Miller’s first count, “Plaintiff’s claim for breach of contract fails because Plaintiff could not demand payment by the Chavezes until the requisite 60 day notice was given under Health and Safety Code §1524.1 and Civil Code §§ 1607 and 1667.” The order stated further: “Plaintiff’s second cause of action for fraud fails because she cannot meet her evidentiary burden of proof for fraud given the lack of any admissible evidence supporting her claim. Furthermore, Plaintiff cannot sustain a cause of action for rescission because she lacks the enough evidence meet the statutory burden of proof for fraud.” The order stated that the Chavezes were entitled to summary judgment against Miller’s complaint and that the summary judgment motion was granted in its entirety.
Summary judgment is proper only if there is no triable issue of material fact and the moving party is entitled to a judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) A judgment is proper only if it finally resolves all issues in the action between the parties. (Id., § 577; see Sullivan v. Delta Air Lines, Inc. (1997) 15 Cal.4th 288, 304.) A party is entitled to summary adjudication if there is no triable issue of material fact as to one or more causes of action within an action. (Code Civ. Proc., § 437c, subd. (f)(1).) An order summarily adjudicating all of the causes of action in a complaint therefore is an order granting summary adjudication, rather than summary judgment, if causes of action in a cross-complaint between the same parties remain unadjudicated. Although the trial court stated that it was granting summary judgment, we consider the order an order granting summary adjudication against the counts alleged in the complaint.
6. Pretrial, Trial and Judgment
The Chavezes filed a motion in limine to exclude evidence regarding “any claim or defense already adjudicated by the Chavezes’ successful motion for summary judgment.” They argued that by granting summary judgment, the court determined certain issues encompassed in the complaint and that those issues should be deemed established for purposes of the trial on the cross-complaint under the doctrine of collateral estoppel. The court stated at the hearing on the motion in limine that in ruling on the summary judgment motion, the court had determined that certain facts were undisputed, that those facts should be considered established for purposes of trial, and that the jury should be informed of the prior ruling in some manner.
Miller’s counsel objected to any mention at trial of the ruling on the summary judgment motion, arguing that the ruling was not relevant and that any mention of the ruling would be prejudicial to Miller. The court stated that the jury should be informed of the context of the cross-complaint, and directed counsel to prepare a preliminary jury instruction to be given before opening statements explaining the ruling on the summary judgment motion. The court stated that the motion in limine was “denied in part,” and apparently granted the motion in part by requiring a preliminary instruction.
Counsel were unable to agree on a preliminary instruction, so the court prepared one. Miller’s counsel again objected to any instruction on the prior summary judgment ruling, and objected that certain language in the court’s proposed instruction was misleading. The court stated that the facts and issues determined in its prior ruling on the summary judgment motion were collateral estoppel in the trial on the cross-complaint, and declined to amend the proposed instruction. Accordingly, the court instructed the jury before opening statements:
“Stephanie Miller’s complaint alleging claims for (1) breach of contract against Norman and Karen Chavez, (2) fraud, (3) rescission, and (4) declaratory relief is no longer at issue in this case. The court has already adjudicated Stephanie Miller’s complaint in favor of Norman and Karen Chavez. The court found that Stephanie Miller was not entitled to rescind the purchase of the real estate by the Chavezes, that the Chavezes did not breach any agreements by declining to pay Stephanie Miller when she demanded payment and that the Chavezes did not commit fraud in any of the underlying transactions. Do not speculate as to why these claims are no longer involved in this case. You should not consider this during your deliberations.
“The letter agreement of November 15, 2004, providing for the sale of the adult residential care facility located at 14902 Touchwood Ave., Bellflower, by Stephanie Miller to Karen Chavez provided that the sales price for the business would be $76,500. It is undisputed by the parties that this amount was not paid by the Chavezes and that Miller never turned over the business to the Chavezes but continued to operate the business as her own through January 2006. After the filing of the within lawsuit, the court determined that this agreement was unenforceable as it did not comply with Health and Safety Code section 1521.4, which provides that the licensor must give 60 days notice of the intent to transfer the facility to both the Department of Social Services and the residents of the facility. Accordingly, the court has ruled against Miss Miller with regard to her breach of contract claim and her fraud claim. The Chavezes have dismissed their fraud claim against Miss Miller.”
Counsel for the Chavezes also referred to the summary adjudication against Miller in closing argument.
The Chavezes dismissed several counts alleged in their cross-complaint before trial, and proceeded on only the counts for unjust enrichment, money had and received, promissory estoppel, and breach of employment contract. Before closing arguments, the Chavezes dismissed their count for breach of employment contract against Miller, but not against New Vision.
The jury returned a series of general verdicts, finding in favor of Karen Chavez and against Miller on the counts for unjust enrichment and promissory estoppel, and finding that Karen Chavez suffered damages of $15,000 and $9,362, respectively, on those two counts against Miller. The jury found in favor of Karen Chavez and against New Vision on the same counts, but found that Karen suffered no damages as a result on those counts against New Vision. The jury also found in favor of Karen Chavez and against New Vision on the count for breach of employment contract, and found that she suffered $7,438 in damages on that count. The jury found in favor of Miller and New Vision on the count by Karen Chavez for money had and received, and found in favor Miller and New Vision on all counts alleged by Norman Chavez.
The court entered a judgment in September 2006. The judgment states, “The court adopts the jury’s verdicts and findings as its own, as applicable.” The judgment awards Miller no relief on her complaint and awards Norman Chavez no relief on the cross-complaint. It awards Karen Chavez $24,362 in damages on the cross-complaint against Miller and $7,438 in damages on the cross-complaint against New Vision. The judgment states as to the complaint that the Chavezes shall recover attorney fees against Miller, “if applicable,” and that “[t]he right to and the amount of costs and attorneys’ fees shall be determined by the Court” pursuant to a postjudgment motion. Similar proposed language in the judgment as to the cross-complaint was crossed-out and initialed by the trial judge.
7. Posttrial Motions and Appeal
Miller and New Vision moved for a new trial on the grounds of attorney misconduct, insufficiency of the evidence to justify the verdict, verdict against the law, and error in law. They argued among other things that the evidence was insufficient to support an alter ego finding, that the special verdict was incomplete because it did not include an alter ego finding, and that the denial of Miller’s motion for a directed verdict as to her individual liability under an alter ego theory was error. Miller also moved to vacate the summary judgment against her complaint (Code Civ. Proc., § 663), arguing that Health and Safety Code section 1524.1 did not require a forfeiture of her right to enforce the business sales contract and that the sale could be accomplished without violating the statute. Miller and New Vision also moved for judgment notwithstanding the verdict as to the counts alleged in the cross-complaint. The court denied the three motions in a minute order filed on December 5, 2006.
The Chavezes moved for an award of attorney fees as costs against Miller and New Vision. They argued that the real property sales contract and interim management agreement both provided for attorney fees to the prevailing party, and argued that they were the prevailing parties on both the complaint and the cross-complaint. The court granted the motion and awarded the Chavezes $173,463.21 in attorney fees against Miller in a minute order filed on December 22, 2006.
Miller and New Vision filed a timely notice of appeal from the judgment “and the rulings made post-judgment made and entered in the above entitled action on December 4, 2006.” The court filed a signed order granting the motion for attorney fees on January 16, 2007. Miller and New Vision did not file a notice of appeal from either the minute order or the signed order awarding attorney fees.
The denial of a new trial motion is not separately appealable, but is encompassed within the appeal from the judgment. (Walker v. Los Angeles County Metropolitan Transportation Authority (2005) 35 Cal.4th 15, 18.) The denial of a motion for judgment notwithstanding the verdict is appealable. (Code Civ. Proc., § 904.1, subd. (a)(4).) We need not decide whether the denial of a motion to vacate a judgment under Code of Civil Procedure section 663 is appealable (compare Clemmer v. Hartford Insurance Co. (1978) 22 Cal.3d 865, 890 [nonappealable], and City of Los Angeles v. Glair (2007) 153 Cal.App.4th 813, 820-822 [same], with Hollister Convalescent Hosp., Inc. v. Rico (1975) 15 Cal.3d 660, 662 [appealable], and Howard v. Lufkin (1988) 206 Cal.App.3d 297, 302 [same]) because the merits of the ruling here are encompassed within the appeal from the judgment.
CONTENTIONS
Miller contends (1) the court granted summary adjudication against the first count in her complaint based on its finding that the business sales contract was illegal under Health and Safety Code section 1524.1, but the contract did not violate section 1524.1; (2) the court in granting summary adjudication against the first count erroneously failed to consider measures less drastic than forfeiture of the business sales contract; (3) if the business sales contract was illegal, the Chavezes were in pari delicto and the “whole contract,” including the real property sales contract, was illegal; (4) the court erred by allowing the jury to decide equitable issues with respect to unjust enrichment, promissory estoppel, money had and received, and alter ego; (5) the jury returned an incomplete special verdict that failed to include a finding of alter ago; (6) the evidence is insufficient to support a finding of alter ego; (7) because the evidence is insufficient to support a finding of alter ego, Miller is entitled to judgment in her favor on the cross-complaint; (8) the Chavezes were not entitled to recover attorney fees against Miller on those counts as to which she was dismissed as a cross-defendant; (9) if the business sales contract was illegal, the Chavezes were not entitled to recover attorney fees based on the business sales contract; and (10) the court improperly amended the judgment by awarding attorney fees on the cross-complaint after entering a judgment in which the court had crossed out a proposed fee award on the cross-complaint.
DISCUSSION
1. Summary Adjudication Against the Counts Alleged in Miller’s Complaint Was Proper
A party is entitled to summary judgment only if there is no triable issue of material fact and the party is entitled to a judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) A party is entitled to summary adjudication if there is no triable issue of material fact as to one or more causes of action within an action. (Id., § 437c, subd. (f)(1).) A defendant moving for summary judgment or summary adjudication must show that one or more elements of the plaintiff’s cause of action cannot be established or that there is a complete defense. (Id., subd. (p)(2).) A defendant can satisfy its burden by presenting evidence that negates an element of the cause of action or evidence that the plaintiff cannot reasonably obtain needed evidence. (Kahn v. East Side Union High School Dist. (2003) 31 Cal.4th 990, 1003.) If the defendant meets this burden, the burden shifts to the plaintiff to set forth “specific facts” showing that a triable issue of material fact exists. (Code Civ. Proc., § 437c, subd. (p)(2).) We review the trial court’s ruling de novo, liberally construe the evidence in favor of the opposing party, and resolve all doubts concerning the evidence in favor of the opposing party. (Miller v. Department of Corrections (2005) 36 Cal.4th 446, 460.)
A party’s failure to perform a contractual obligation constitutes a breach of contract only if the time for performance is due. (Taylor v. Johnston (1975) 15 Cal.3d 130, 137.) The terms of the contract determine when the time for performance is due.
There is no evidence of an anticipatory breach by Karen Chavez by repudiation of the contract. (See Taylor v. Johnston, supra, 15 Cal.3d at p. 137.)
We interpret a contract so as to give effect to the parties’ mutual intention at the time the contract was formed. (Civ. Code, § 1636; Hess v. Ford Motor Co. (2002) 27 Cal.4th 516, 524.) We ascertain that intention solely from the written contract, if possible, but also consider the circumstances under which the contract was made and the matter to which it relates. (Civ. Code, §§ 1639, 1647; Hess, supra, at p. 524.) We consider the contract as a whole and construe the language in context, rather than interpret a provision in isolation. (Civ. Code, § 1641.) We interpret words in a contract in accordance with their ordinary and popular sense, unless the words are used in a technical sense or a special meaning is given to them by usage. (Id., § 1644.) If contractual language is clear and explicit and does not involve an absurdity, the plain meaning governs. (Id., § 1638.)
As a general rule, “ ‘all applicable laws in existence when an agreement is made, which laws the parties are presumed to know and to have had in mind, necessarily enter into the contract and form a part of it, without any stipulation to that effect, as if they were expressly referred to and incorporated.’ [Citation.]” (Alpha Beta Food Markets v. Retail Clerks (1955) 45 Cal.2d 764, 771.)
Health and Safety Code section 1508 states that no person may operate a community care facility in this state, including an adult residential care facility (id., § 1502, subd. (a)), without a current, valid license. Section 1524.1, subdivision (a) states that if the sale of a licensed community care facility will result in a new license being issued, the licensee must provide written notice to the Department of Social Services and to each resident or client of the licensee’s intent to sell the facility. The notice must be given “at least 60 days prior to the transfer of property or business, or at the time that a bona fide offer is made, whichever period is longer.” (Id., subd. (a)(1)) “No transfer of the property or business shall be permitted until 60 days have elapsed from the date when notice has been provided to the department pursuant to paragraph (1) of subdivision (a).” (Id., subd. (c).) “[T]he property and business shall not be transferred until the buyer qualifies for a license or provisional license pursuant to this chapter” (id., subd. (b)), except that, if the parties fully comply with section 1524.1, “the transfer may be completed and the buyer shall not be considered to be operating an unlicensed facility while the department makes a final determination on the application for licensure” (id., subd. (e)). The parties do not dispute that section 1524.1 applied to the proposed sale of the business.
Health and Safety Code section 1524.1 also states that if the prospective buyer intends to continue operating the facility as a community care facility, the seller must notify the buyer in writing of the need to obtain a license and must send a copy of the notice to the Department of Social Services. (Health & Saf. Code, § 1524.1, subd. (b)(1).) The prospective buyer must apply for a license within five days after the seller accepts an offer. (Id., subd. (b)(2).)
The business sales contract stated that the sale of the business was “totally contingent upon” the closing of the escrow for the sale of the real property, and that Miller did not intend “to sell the business without simultaneously selling the real estate, which is associated with the business.” The contract stated that full payment in the amount of $76,500 was due at the close of escrow for the sale of the business. The contract did not refer to the notice and other requirements of Health and Safety Code section 1524.1. Despite the absence of a provision expressly stating that the business would not be transferred until after the expiration of the 60-day notice period (id., subds. (a)(1) & (c)) and until after the other statutory requirements were satisfied, those statutory requirements were incorporated in the business sales contract as a matter of law. (Alpha Beta Food Markets v. Retail Clerks, supra, 45 Cal.2d at p. 771.)
The trial court concluded that Miller could not establish a breach of contract because no payment was due until after the required 60-day notice period. We agree. In light of Health and Safety Code section 1524.1, subdivision (c), the close of escrow for the sale of the business could not occur until 60 days after the required notice. Because payment was due at the close of escrow and not before, no payment was due until after the required 60-day notice period. Miller first provided notice to the Department of Social Services of her intent to sell the business on January 12, 2005. Miller’s demand for payment from Karen Chavez on or about January 26, 2005, was premature. No payment was due at that time. Miller “rescinded” her notice of intent to sell on January 31, 2005, before the expiration of the 60-day period. The result is that payment for the business never became due, and Karen Chavez did not breach any payment obligation under the business sales contract.
As we have noted, the order granting summary judgment stated, “Plaintiff’s claim for breach of contract fails because Plaintiff could not demand payment by the Chavezes until the requisite 60 day notice was given under Health and Safety Code § 1524.1 and Civil Code §§ 1607 and 1667.”
Miller misconstrues the trial court’s ruling as based on a determination that the business sales contract was “illegal.” The order granting summary judgment did not state that the contract was illegal. We do not construe the reference in the order to Civil Code sections 1607 and 1667 to mean that the court found the contract to be illegal, but only that the court found that no legal payment obligation arose in light of the 60-day notice requirement of Health and Safety Code section 1524.1. Miller also argues that the summary judgment effected a forfeiture of the business sales contract. We disagree. The court properly determined that Miller could not establish an essential element of her cause of action. Miller’s inability to prove a breach resulted from her failure to comply with the 60-day notice requirement, and not from any declaration of forfeiture.
“The consideration of a contract must be lawful within the meaning of section sixteen hundred and sixty-seven.” (Civ. Code, § 1607.)
“That is not lawful which is:
We conclude that Miller has shown no error in the summary adjudication against the counts alleged in her complaint. The Chavezes are entitled to judgment in their favor on those counts upon entry of a final judgment. (Code Civ. Proc., § 437c, subd. (k).)
2. The Court Properly Made Findings on Equitable Issues Consistent with the Jury’s Advisory Verdicts
The California Constitution (art. I, § 16) guarantees the same right to a jury trial that existed at common law when the Constitution was adopted. (C & K Engineering Contractors v. Amber Steel Co. (1978) 23 Cal.3d 1, 8.) The right to a jury trial exists if the action deals with ordinary common law rights of the sort that were cognizable in courts of law. This depends not on the form of the action, but on the nature of the rights involved and the facts of the case--that is, the gist of the action. (Id. at p. 9.) If the action is essentially one in equity and the relief sought depends on the application of equitable principles, however, there is no right to a jury trial. (Ibid.) The court in its discretion may submit to a jury issues as to which there is no right to a jury trial. The jury’s findings in those circumstances are advisory only. The court must make its own findings on those issues, and is free to adopt or reject the jury’s findings. (De Arellanes v. Arellanes (1907) 151 Cal. 443, 449; see Saks v. Charity Mission Baptist Church (2001) 90 Cal.App.4th 1116, 1147.)
The trial court here submitted to the jury both legal and equitable issues. The court in the judgment expressly adopted the jury’s verdict and findings as its own, “as applicable.” Although the court did not expressly state which issues it independently determined, Miller has not shown that the court failed to independently decide the equitable issues and therefore has not shown error.
3. The Verdict Was Complete
A verdict in which the jury pronounces generally in favor of the plaintiff or defendant on any or all of the issues is a general verdict. (Code Civ. Proc., § 624.) A special verdict is one in which the jury finds the facts and leaves the judgment to the court. (Ibid.) A general verdict implies findings in favor of the prevailing party on all material facts essential to support the verdict. (Henderson v. Harnischfeger Corp. (1974) 12 Cal.3d 663, 673.) A special verdict, in contrast, must include findings on all material factual issues so that nothing remains for the court to do other than to draw conclusions of law. (Code Civ. Proc., § 624; Falls v. Superior Court (1987) 194 Cal.App.3d 851, 854-855.)
The verdicts here pronounced in favor of the cross-complainants or cross-defendants on each count. This was a series of general verdicts. (Shaw v. Hughes Aircraft Co. (2000) 83 Cal.App.4th 1336, 1347, fn. 7.) Accordingly, there was no incomplete special verdict.
4. The Evidence Does Not Support the Implied Finding of Alter Ego
Miller contends the damages awarded against her for unjust enrichment and promissory estoppel are based on an alter ego theory and the evidence does not support an implied finding that she was New Vision’s alter ego. We agree.
a. Alter Ego Doctrine
“Ordinarily, a corporation is regarded as a legal entity separate and distinct from its stockholders, officers and directors. Under the alter ego doctrine, however, where a corporation is used by an individual or individuals, or by another corporation, to perpetrate fraud, circumvent a statute, or accomplish some other wrongful or inequitable purpose, a court may disregard the corporate entity and treat the corporation’s acts as if they were done by the persons actually controlling the corporation. [Citations.]
“In general, the two requirements for applying the alter ego doctrine are that (1) there is such a unity of interest and ownership between the corporation and the individual or organization controlling it that their separate personalities no longer exist, and (2) failure to disregard the corporate entity would sanction a fraud or promote injustice. [Citations.] The doctrine is applicable where some innocent party attacks the corporate form as an injury to that party’s interests. The issue is not so much whether the corporate entity should be disregarded for all purposes or whether its very purpose was to defraud the innocent party, as it is whether in the particular case presented, justice and equity can best be accomplished and fraud and unfairness defeated by disregarding the distinct entity of the corporate form. [Citations.]” (Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 993.) The purpose of the doctrine is not to protect every creditor of a corporation, and difficulty in collecting a judgment or debt alone does not satisfy the requirement of a fraud or injustice so as to justify the disregard of the corporate form. (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 539; Associated Vendors, Inc. v. Oakland Meat Co. (1962) 210 Cal.App.2d 825, 842.)
Many factors may tend to support a finding of alter ego liability, depending on the particular circumstances of the case, including commingling of funds and other assets; an individual’s treatment of corporate assets as his or her own; failure to issue stock; an individual’s representation that he or she is personally liable for corporate debts; failure to maintain minutes or adequate corporate records; identical equitable ownership and control of separate entities; common directors and officers; ownership of all of the stock in a corporation by one individual or family; use of the same office or business location; employment of the same employees or attorney; inadequate capitalization; use of a corporation as a mere instrumentality for a single venture or for the business of another; concealment of the identity of the responsible ownership, management, and financial interest; disregard of legal formalities and failure to maintain arm’s-length relationships among related entities; use of the corporation to procure labor, services, or merchandise for another; diversion of assets to the detriment of creditors; use of a corporation to avoid performance of a contract and to avoid contractual liability; and use of a corporation to transfer to it the existing liability of another person or entity. (Morrison Knudsen Corp. v. Hancock, Rothert & Bunshoft (1999) 69 Cal.App.4th 223, 249-250; Associated Vendors, Inc. v. Oakland Meat Co., supra, 210 Cal.App.2d at pp. 838-840.) No single factor is determinative. (Sonora Diamond Corp. v. Superior Court, supra, 83 Cal.App.4th at p. 539.) “Alter ego is an extreme remedy, sparingly used.” (Ibid.)
The alter ego doctrine is an equitable doctrine. (Stark v. Coker (1942) 20 Cal.2d 839, 846.) Because the imposition of alter ego liability depends primarily on the application of equitable principles, there is no right to a jury trial. (Dow Jones Co. v. Avenel (1984) 151 Cal.App.3d 144, 147-148.) We review a finding that a person or entity is the alter ego of a corporation under the substantial evidence test. (Baize v. Eastridge Companies (2006) 142 Cal.App.4th 293, 302; Associated Vendors, Inc. v. Oakland Meat Co., supra, 210 Cal.App.2d at p. 837.)
b. Alter Ego Issue at Trial
The Chavezes maintained at trial that the $1 lease from the Chavezes as the new owners of the real property was intended to avoid a formal transfer of the business to the Chavezes until Karen Chavez could obtain a license. They maintained that the interim management agreement was intended to allow Karen Chavez to assume full responsibility for the operation of the adult residential care facility and to receive all of the profits from the operation of the facility pending the approval of her license application. The Chavezes argued that by terminating the interim management agreement and ousting Karen Chavez while continuing to occupy the property under the $1 lease, Miller and New Vision deprived the Chavezes of both the business profits and the fair rental value of the property, and were unjustly enriched. The Chavezes sought to recover $3,500 to $4,000 per month as the fair rental value of the property, for a one-year period, and $5,000 in business profits for the month of January 2005. The Chavezes also sought to recover $11,000 that they spent on the business in January 2005 under the count for money had and received, against both Miller and New Vision. The basis for the promissory estoppel count apparently was that Miller and New Vision had promised that the $1 lease was only for the sake of appearances and would have no vitality apart from the interim management agreement.
The Chavezes as witnesses during trial and their counsel generally referred to Miller without mentioning New Vision. Although the interim management agreement expressly stated that it was between New Vision and Karen Chavez and the $1 lease expressly stated that it was between New Vision and the Chavezes, the Chavezes’ counsel in his opening statement stated without explanation that the agreements were with Miller and that Miller had taken advantage of the Chavezes in connection with the agreements. The Chavezes in their trial testimony referred to Miller in connection with the $1 lease, interim management agreement, and related events, without distinguishing between Miller as an individual and New Vision. On cross-examination, Karen Chavez testified that she believed that the $1 lease was between the Chavezes and Miller, rather than New Vision, and that Miller had signed the interim management agreement as the “Licensee.” The court instructed the jury on the alter ego doctrine. The Chavezes’ counsel did not address the issue in closing argument, while counsel for Miller and New Vision argued in closing argument that the evidence did not support a finding of alter ego.
Karen and Norman Chavez had declared in declarations in support of their summary judgment motion that the lease was between New Vision and the Chavezes.
The jury found that Miller was liable to Karen Chavez on the counts for unjust enrichment and promissory estoppel for damages in the amounts of $15,000 and $9,362, respectively, and that New Vision was liable to Karen Chavez on those same counts but for no damages. The jury found in favor of both Miller and New Vision on the count for money had and received. The trial court adopted the jury’s findings as its own and entered judgment accordingly. Miller was not alleged to have any liability separate and apart from that of New Vision, and it appears that the only basis for the award of damages against Miller was an implied finding that New Vision was her alter ego with respect to dealings in connection with the interim management agreement and the $1 lease.
c. The Evidence Does Not Support the Alter Ego Finding
Our review of the record reveals no substantial evidence that failure to disregard the corporate form would result in a fraud or injustice, as required to support the alter ego finding. Both the interim management agreement and the lease expressly and prominently identified New Vision as the contracting party. Although the signature lines on those contracts did not expressly indicate that Miller was signing on behalf of New Vision, no evidence provides any reasonable basis to conclude that the Chavezes were in any way misled to believe that they were contracting with Miller as an individual rather than with the corporation. Moreover, there is no evidence that Miller diverted assets from the corporation so as avoid creditors, transferred her personal liability to the corporation, or otherwise engaged in conduct that would constitute a fraud on her creditors or bad faith misuse of the corporate form in connection with the interim management agreement or lease.
The Chavezes cite the fact that the business sales contract was written on Miller’s personal letterhead and signed by Miller individually as evidence that Miller was personally liable for unjust enrichment and promissory estoppel, apart from any finding of alter ego. They also cite the same fact as evidence that Miller was New Vision’s alter ego. The Chavezes contend New Vision, rather than Miller, owned the business, and Miller’s failure to distinguish herself from the corporation in the business sales contract shows her disregard of corporate formalities, commingling of funds, and “acceptance of liability.” We conclude that the fact that Miller was a party to the business sales contract does not establish either that she was a party to the interim management agreement or lease or that she is personally liable for the acts of New Vision in connection with those contracts. The counts for unjust enrichment and promissory estoppel were based on the parties’ dealings in connection with the interim management agreement and lease, rather than the business sales contract. Moreover, even if New Vision rather than Miller properly should have been a party to the business sales contract (which we need not and do not decide), there is no evidence that disregard of the corporate entity is necessary to prevent a fraud or injustice.
The other evidence cited by the Chavezes also fails to support a finding of alter ego. New Vision operated on real property owned by Miller under a written lease that was entered in evidence. This does not show a commingling of assets. The Chavezes contend Miller and New Vision used the same address, but the evidence shows consistent use of separate addresses for Miller in her personal letters and contracts and New Vision in its letters and contracts. The two letters sent by Miller on her personal letterhead to Karen Chavez in connection with the termination of the interim management agreement and the other purported evidence cited by the Chavezes are insufficient to show that disregard of the corporate entity is necessary to prevent a fraud or injustice.
d. Miller Is Not Entitled to Judgment in her Favor
A party is entitled to a judgment notwithstanding the verdict if there is no substantial evidence to support the verdict and the evidence compels a judgment for the moving party as a matter of law. (Code Civ. Proc., § 629; Clemmer v. Hartford Insurance Co., supra, 22 Cal.3d at p. 865, 877-878.) A judgment notwithstanding the verdict is proper only if a motion for directed verdict should have been granted had the aggrieved party moved for a directed verdict. (Code Civ. Proc., § 629.) A party may move for a directed verdict only as to issues to be tried by a jury. (Id., § 630, subd. (a).) A judgment notwithstanding the verdict therefore is proper only as to issues tried by a jury. (Herr v. Nestlé v. U.S.A., Inc. (2003) 109 Cal.App.4th 779, 788.) Because the jury’s implied finding of alter ego was advisory only and the trial court independently decided the issue, Miller was not entitled to a judgment notwithstanding the verdict on the alter ego issue.
An appellate court may reverse a judgment with directions to enter a different judgment if it appears from the record that no new evidence would be presented in a new trial and there is only one proper judgment. (Code Civ. Proc., § 43; Conley v. Matthes (1997) 56 Cal.App.4th 1453, 1459, fn. 7; see Paterno v. State of California (1999) 74 Cal.App.4th 68, 76.) The alter ego issue was not thoroughly litigated, so we cannot conclude that no new evidence would be presented in a new trial.
5. A Complete New Trial on the Cross-Complaint Is Required
An appellate court may order a limited new trial if a new trial on limited issues would not cause such uncertainty or confusion as to deny a fair trial. (Brewer v. Second Baptist Church (1948) 32 Cal.2d 791, 801; see Torres v. Automobile Club of So. California (1997) 15 Cal.4th 771, 776.) Whether a limited new trial would prejudice any party depends on the particular circumstances of each case. (Brewer, supra, at p. 801.)
The jury and the trial court found in favor of Karen Chavez against both Miller and New Vision on the counts for unjust enrichment and promissory estoppel, yet the court awarded damages on those counts against Miller only. If the jury and the court found that Miller and New Vision were alter egos, as we conclude is implied in the judgment, their liability should have been the same. We cannot confidently conclude either that the judgment with respect to New Vision was free from error or that a new trial against Miller alone would serve the interests of justice. We conclude that a new trial against Miller alone would confuse the jury and that justice would best be served by a complete new trial on the cross-complaint against both Miller and New Vision. Although New Vision does not challenge the award of $7,438 against it in favor Karen Chavez on the count for breach of employment contract, we conclude that a complete new trial on that count as well would be in the interests of justice in these circumstances.
Miller does not argue on appeal that the preinstruction to the jury regarding the summary adjudication against her complaint was error. We will address the issue nonetheless because it is likely to arise again in the new trial. (Code Civ. Proc., § 43.) The order granting “summary judgment” was in legal effect an order granting summary adjudication, as we have stated. Code of Civil Procedure section 437c, subdivision (n)(3) states, “In the trial of an action, neither a party, nor a witness, nor the court shall comment upon the grant or denial of a motion for summary adjudication to a jury.” The purpose of this statutory prohibition is to ensure that the trial on the remaining causes of action is unaffected by the prior summary adjudication ruling. (Raghavan v. Boeing Co. (2005) 133 Cal.App.4th 1120, 1137; see also Code Civ. Proc., § 437c, subd. (n)(2).) Moreover, an order granting summary adjudication cannot establish collateral estoppel (or direct estoppel) before the entry of judgment in the action. (Raghavan, supra, at p. 1137, fn. 1.) In light of our conclusion that the judgment must be reversed on other grounds, we need not decide whether the preinstruction was prejudicial error. In the new trial, however, neither the court nor any party or witness may comment to the jury on the summary adjudication. (Code Civ. Proc., § 437c, subd. (n)(3).)
6. The Attorney Fee Award Is Vacated
Our reversal of the judgment means that there is no prevailing party (see Code Civ. Proc., § 1032, subd. (a)(4)) and no basis for an award of costs to the prevailing party, including attorney fees as costs. A reversal sets the matter at large as if there had been no judgment and automatically vacates an award of costs incidental to the judgment. (Monson v. Fischer (1933) 219 Cal. 290, 291; Evans v. Southern Pacific Transportation Co. (1989) 213 Cal.App.3d 1378, 1388.) The order awarding fees as costs to the Chavezes as prevailing parties therefore is vacated, regardless of whether Miller timely appealed the order. (See Allen v. Smith (2002) 94 Cal.App.4th 1270, 1284.)
DISPOSITION
The judgment is reversed with directions to conduct a complete new trial on the cross-complaint against both Miller and New Vision. The order denying the motion for judgment notwithstanding the verdict is affirmed. Each party is to bear its own costs on appeal.
We Concur: KLEIN, P. J., ALDRICH, J.
“1. Contrary to an express provision of law;
“2. Contrary to the policy of express law, though not expressly prohibited; or,
“3. Otherwise contrary to good morals.” (Civ. Code, § 1667.)