Opinion
A125476 No. 474602
09-10-2010
CHRIS WYMORE, et al., Plaintiffs and Appellants, v. EDGAR MINTO, Defendant and Respondent.
Appellants Chris Wymore, Erik Swenson, and Linda Catlett appeal from (1) a judgment, filed on April 22, 2009, in favor of respondent Edgar Minto, and (2) an order, filed on June 19, 2009, awarding respondent the sum of $6,577.50 as attorneys fees. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
EWM Corporation, doing business as The Roman Shade Company (hereinafter referred to as EWM), filed a complaint against three former employees—appellants Chris Wymore, Erik Swenson, and Linda Catlett. In response, appellants filed a crosscomplaint against EWM and respondent Edgar Minto, as "an individual owning The Roman Shade Company." In relevant part, the first cause of action alleged EWM and respondent had violated the Labor Code by failing to pay appellants certain salary and commissions earned during the years 2007 and 2008 (hereinafter referred to as the Labor Code cause of action). Recovery was sought for unpaid salary and commissions of at least $211,841 (§ 201), a penalty of $56,551 (§ 203), and reasonable attorney fees (§ 218.5). Before trial, EWM dismissed its complaint, and appellants dismissed the cross-complaints causes of actions for intentional interference with prospective economic relations, negligent interference with prospective economic relations, and defamation, which were alleged against respondent only. Appellants settled their Labor Code cause of action against EWM for the aggregate sum of $400,000, with each side to "bear [their] own attorneys fees and costs." Section 201 reads, in pertinent part: "(a) If an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately." Section 203 reads, in pertinent part: "If an employer willfully fails to pay, without abatement or reduction, in accordance with Section[] 201..., any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days." Section 218.5 reads, in pertinent part: "In any action brought for the nonpayment of wages,... the court shall award reasonable attorneys fees and costs to the prevailing party if any party to the action requests attorneys fees and costs upon the initiation of the action."
All further unspecified statutory references are to the Labor Code.
At a bench trial held on March 23, 2009, the parties agreed the only matter remaining to be resolved was the Labor Code cause of action against respondent. Specifically, the issue before the court was whether respondent should be held personally liable for the stipulated judgment against EWM, "i.e. whether the corporate veil ought to be pierced, allowing access by [appellants] to [respondents] personal assets." The court heard testimony from respondent, his wife Margaret Minto, and appellant Linda Catelett, and considered documentary evidence proffered by the parties. At the conclusion of the trial, the court granted plaintiffs motion to formally amend the cross-complaint to conform to the proof, essentially adding an allegation that respondent was liable because EWM and respondent were alter egos of each other. The parties submitted post-trial supplemental briefs regarding the alter ego issue. Appellants sought judgment in their favor and attorneys fees as the prevailing parties pursuant to section 218.5. Similarly, respondent sought judgment in his favor, and attorneys fees as the prevailing party pursuant to section 218.5. After the court issued a proposed statement of decision, appellants filed objections to which respondent filed a reply. The court issued a statement of decision finding respondent was not liable for the debts of EWM pursuant to the alter ego doctrine. On April 22, 2009, the court filed a judgment in favor of respondent. After considering the parties additional motion papers and arguments at a hearing, the court filed an order on June 19, 2009, in which it awarded $6,577.50 as attorneys fees to respondent as the prevailing party, pursuant to section 218.5. Appellants timely filed notices of appeal from the April 22, 2009, judgment and the June 19, 2009, order.
DISCUSSION
I. Respondents Liability Under Alter Ego Doctrine
A. Alter Ego Doctrine
"Ordinarily, a corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations. [Citations.] A corporate identity may be disregarded—the corporate veil pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation. [Citation.] Under the alter ego doctrine, then, when the corporate form is used to perpetrate a fraud, circumvent a statute, or accomplish some other wrongful or inequitable purpose, the courts will ignore the corporate entity and deem the corporations acts to be those of the persons or organizations actually controlling the corporation, in most instances the equitable owners. [Citations.] The alter ego doctrine prevents individuals or other corporations from misusing the corporate laws by the device of a sham corporate entity formed for the purpose of committing fraud or other misdeeds. [Citation.][¶] In California, two conditions must be met before the alter ego doctrine will be invoked. First, there must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist. Second, there must be an inequitable result if the acts in question are treated as those of the corporation alone. [Citations.]" (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538 (Sonora).)
Appellants argue the trial court erred, as a matter of law, in not considering together both the "unity of interest and ownership" component and the "inequitable result" component of the alter ego test. We disagree. Case law supports the trial courts determination that if evidence supporting the "unity of interest and ownership" component "is absent, the presence of the other requirement, i.e., that if the acts are treated as those of the corporation alone an inequitable result will follow, does not compel the piercing of the corporate veil." (Auer v. Frank (1964) 227 Cal.App.2d 396, 411 (Auer); Associated Vendors, Inc. v. Oakland Meat Co. (1962) 210 Cal.App.2d 825, 842 (Associated Vendors) ["the prerequisite of inequitable result must coexist with the other requirement of unity of interest and ownership"].) "As [the court] pointed out in Associated Vendors the unhappy circumstance that a creditor will remain unsatisfied if the corporate veil is not pierced does not, in and of itself, produce the inequitable result contemplated by the alter ego doctrine." (Auer, supra, 227 Cal.App.2d at p. 411.) Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 300-301, cited by appellants, does not support their contention that the trial courts evaluation of the two components of the alter ego test requires reversal.
B. Sufficiency of Evidence Supporting Judgment
1. Relevant Facts
The trial court determined EWM and respondent were not the alter egos of each other after finding appellants had failed to meet their burden of establishing such a unity of interest and ownership as would require the piercing of the corporate veil to hold respondent liable for EWMs debts. "The factors which may show the unity of interest issue vary according to each case and are fact specific. [Citation.] Among the facts which can be considered are financial issues (e.g., was the corporation adequately capitalized?); corporate formality questions (e.g., was stock issued, are minutes kept and officers and directors elected, are corporate records segregated?); ownership issues (e.g., what is the stock ownership picture?); commingling issues (e.g., are corporate assets commingled...?);.... [Citation.]" (Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1285, fn. 13.)
In its statement of decision, the court found that: "EWM was formed in July 2002 by [respondent] and his wife. These two are and always have been the sole shareholders, directors, and officers of the company. The company has maintained offices separate from the individuals home, and bank accounts separate from the individual accounts. The company has apparently made the appropriate filings with Californias secretary of state and the Internal Revenue Service.... Annual board meetings were held at their home.... The sole capitalization occurred when the company was formed and totaled $10,000."
The court recognized that "[t]he thrust of the case here is that [respondent] paid himself and his wife substantial sums of money during a period that he failed to pay [appellants] what was due to them. It is plain that in 2007 [respondent] decided to pay his wife about $138,000, and himself $225,000, whereas EWM failed to pay [appellants] what they were owed in salaries and commissions.... The reason for this failure to pay was, as [respondent] put it, that the company simply did not have the money to make the payments. It is true that EWM did not have the money—after [respondent] and his wife were paid."
Nevertheless, the trial court found there was nothing in the record to persuade it that "the usual legal demarcations between the liability of a company and of its owners ought to be breached" in this case. The court specifically rejected appellants argument that the consideration of ten factors, either singly or together, supported piercing the corporate veil. In its statement of decision, the court addressed the ten factors relied upon by appellants (italicized here for convenience), as follows: "1. [Respondent] formed the corporation to shield against personal liability This is so, but that motivation is common, and is irrelevant to the alter ego analysis. From time immemorial, corporations by definition have been vehicles designed to limit liability. [Citation.][¶] "2. [Respondent] paid himself and his wife large sums of money. There was no evidence that the payments were excessive, as measured by market salaries, the number of hours worked or level of responsibility, or other criteria.[¶] 3. [Respondent] and his wife staff all the director and officer positions. This is of little weight. The issue is not whether they hold these positions, but rather whether their roles as owners overlap or are otherwise to some extent indistinguishable from their individual roles. The mere fact that a company is made up of one or two people is insufficient. [Citations.] There is no substantial evidence that the role of the owners as individuals and as corporate officers or directors overlapped.[¶] 4. Business location: i.e. [respondent] works at the EWM location. This is entirely unremarkable given the fact that [respondent] was working for EWM.[¶] 5. [Respondent] and EWM share an attorney in this case. This is of little weight, since on all issues (save and except the alter ego matter) their interests in this litigation are aligned and it is doubtless more efficient to use the same lawyer.[¶] 6. [Respondent] used EWM to procure labor for his business and used the company as a shield from payment. The first suggestion begs the alter ego issue (his business) and the second just restates item (1).[¶] 7. [Respondent] and wife met only once a year and did so at their home. There is no evidence that annual meetings were insufficient. Nothing suggests that meetings at home are any more evidence of alter ego liability than meetings at e.g., a restaurant or at EWMs premises.[¶] 8. Inadequate capitalization. Nothing in the record supports the notion that $10,000 is not adequate, nor is there any evidence of what an adequate level would be. While patently inadequate capitalization would indeed be a factor in alter ego analysis, we know here that the company, founded in 2002, was apparently on sound financial footing for about five years, which strongly suggests that the capitalization here does not favor alter ego liability.... Here,..., [appellants] made no effort to contrast the actual assets and capital of the company with respect to the business to be done and the risks of loss. The only showing here, i.e., inadequate assets to pay the debt (to [appellants]), is not enough to make out this element, else the corporate veil would be pierced in every case of bankruptcy. [Citation.][¶] 9. Two loans from [respondents] real estate venture. The point here is that while the loans were initially for 10 year periods, they were repaid (at [respondents] direction) within a year. I do not have any evidence that this was improper: The loans were designed to and had the effect of helping EWM, not to hurt it; and [respondent] could presumably have initially made them for a one year period. [Respondent] does not appear to have benefited personally from the transactions which, as far as this record is concerned, were made at arms-length.[¶] 10. No insurance to cover claims; EWM does not have the money to pay [appellants]. While this may go to the second factor, i.e. the equities of the situation, it does not affect the first factor of the alter ego test."
Respondent testified he had formed EWM on the advice of his attorney and accountant. "The... company... had grown too large to be operated as a sole proprietorship. I was advised to incorporate." At a pretrial deposition, respondent further stated, "We were advised by our attorneys that because of the volume that we were doing and the number of employees that we had, that for liability reasons we should separate our personal assets from the corporate assets." Respondent agreed with appellants counsels statement, "[s]o it was to limit your risk of liability?"
Respondent testified that during 2007, he paid himself a salary totaling $225,000, by issuing seven payroll checks in March 2007, eleven payroll checks in April 2007, eight payroll checks in May 2007, and two payroll checks (for over $10,000) on successive days in November 2007. During 2007, respondent paid his wife a salary totaling $138,000, by issuing six payroll checks in March 2007, eight payroll checks in April 2007, and seven payroll checks in May 2007.
Respondent testified that although he and EWM had the same litigation attorney, EWMs corporate attorney was from "Greg Manzell (phonetic)."
2. Analysis
We initially reject appellants argument that there are certain deficiencies in the trial courts statement of decision requiring reversal or a remand for reconsideration. "A statement of decision need not address all the legal and factual issues raised by the parties. Instead, it need do no more than state the grounds upon which the judgment rests, without necessarily specifying the particular evidence considered by the trial court in reaching its decision. [Citations.]" (Muzquiz v. City of Emeryville (2000) 79 Cal.App.4th 1106, 1124-1125 (Muzquiz)?) The trial courts statement of decision included an accurate statement of the law, and made a specific negative finding on the only factual issue before it: whether appellants had borne their burden of demonstrating that EWM and respondent were alter egos of each other. "This is all [the trial court] was required to do under Code of Civil Procedure section 632. It was not required to address how it resolved intermediate evidentiary conflicts, or respond point by point to the various issues posed" by appellants in their objections to the courts proposed statement of decision. (Muzquiz, supra, 79 Cal.App.4th at p. 1126.)
In challenging the sufficiency of evidence, appellants argue that despite their proof of many of the factors showing a unity of interest and ownership between respondent and EWM, the trial court improperly "disagreed that those factors bore any weight in the analysis," and erroneously parsed each factor showing a unity of interest separately, thereby minimizing the cumulative effect of the factors. As we now discuss, appellants arguments are unavailing.
Appellants rely primarily on "appellate decisions which have upheld judgments disregarding the corporate entity where the factual situation presented supplied factors which allowed the trial court to arrive at that conclusion." (Associated Vendors, supra, 210 Cal.App.2d at p. 836.) However, on appeal, we do not review the record for substantial evidence that would support a ruling that EWM and respondent were the alter egos of each other, as appellants suggest. Rather, our authority is only to determine "whether there is substantial evidence in favor of the respondent. If this substantial evidence is present, no matter how slight it may appear in comparison with the contradictory evidence, the judgment must be upheld." (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 631.) "If such substantial evidence be found, it is of no consequence that the [trier of fact] believing other evidence, or drawing other reasonable inferences, might have reached a contrary conclusion. [Citations.]" (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 874.)
We also see no merit to appellants argument that the trial court considered some facts but not other facts. As an appellate court, "[i]t is not our task to weigh conflicts and disputes in the evidence...." (Duffy v. Cavalier (1989) 215 Cal.App.3d 1517, 1539.) "It is for the trier of fact to consider internal inconsistencies in testimony, to resolve them if this is possible, and to determine what weight should be given to such testimony." (Clemmer v. Hartford Insurance Co. (1978) 22 Cal.3d 865, 878; see
MacPherson v. Eccleston (1961) 190 Cal.App.2d 24, 27 [trial courts rejection of alter ego liability upheld even though plaintiff presented evidence that primary shareholder had stated," I, or we owned the land[]" that belonged only to corporation].) "Even in cases where the evidence is undisputed or uncontradicted, if two or more different inferences can reasonably be drawn from the evidence this court is without power to substitute its own inferences or deductions for those of the trier of fact, which must resolve such conflicting interferences in the absence of a rule of law specifying the inference to be drawn." (Howardv. Owens Corning, supra, 72 Cal.App.4th at p. 631.) These rules "will obtain even though to some triers of fact the evidence in the instant case would have seemed so improbable, impossible and unbelievable that a judgment contrary to that now on appeal would have inevitably followed." (Romero v. Eustace (1950) 101 Cal.App.2d 253, 254.)
Applying the appropriate rules, we therefore must conclude that the trial courts judgment is supported by substantial evidence. In refusing to pierce the corporate veil, the trial court found, in effect, that respondents conversion of his sole proprietorship to corporate form and EWMs continuing operation as a separate corporate entity was not "illusory." (Katzirs Floor and Home Design v. M-MLS.com (9th Cir. 2004) 394 F.3d 1143, 1149 (Katzirs Floor and Home Design)?) In converting his company to a corporate entity, respondent complied with the requisite formalities of incorporation, including the issuance of "Secretary of State Articles of Incorporation," registration of the payment of $10,000 capital with the California Department of Corporations, and the issuance of a stock certificate. Over the ensuing years, respondent continued to operate EWM as a separate entity. The corporation had written bylaws, and a corporate book containing the minutes of the annual meetings of the board of directors and shareholders for the years 2003 through 2008. There was no commingling of personal assets. The corporation had a separate address and telephone number, separate bank account, separate tax identification number, and filed separate corporate tax returns. After incorporation, all business expenses, including payroll, were paid from the corporations separate bank account and EWM issued W-2 tax forms to its employees, including appellants, respondent and his wife. Respondents loans to EWM were disclosed on the corporations annual tax returns, and the interest paid by EWM to respondent for the loans was noted on both respondents personal income tax return and the corporate tax return.
The courts decision regarding the weight to be given the fact that respondent and his wife were the sole shareholders, directors, and officers of EWM, is supported by legal authority. The circumstance of sole ownership and control does not," and should not, destroy [EWMs] separate existence; were it otherwise, few private corporations could preserve their distinct identity, which would mean the complete destruction of the primary object of their organization. [Citations.]" (Dos Pueblos Ranch & Imp. Co. v. Ellis (1937) 8 Cal.2d 617, 621, quoting Erkenbrecher v. Grant (1921) 187 Cal. 7, 11; see Katzirs Floor and Home Design, supra, 394 F.3d at p. 1149 ["The mere fact of sole ownership and control does not eviscerate the separate corporate identity that is the foundation of corporate law"]; 1 Fletcher Cyclopedia of the Law of Corporations (2006 rev.) § 41.35, pp. 237-238, fns. omitted ["Allegations that the defendant was the sole or primary shareholder are inadequate as a matter of law to pierce the corporate veil. Even if the sole shareholder is entitled to all of the corporations profits and dominated and controlled the corporation, those facts alone are insufficient to make the shareholder personally liable"].)
Additionally, the court could appropriately reject appellants arguments regarding the capitalization of EWM and respondents distribution of assets in the form of payroll to himself and his wife during 2007. The trial courts reason for giving no weight to appellants arguments due to the lack of evidence is supported by legal authority. As explained by the court in Carlesimo v. Schwebel (1948) 87 Cal.App.2d 482 (Carlesimo), "the proper rule is that inadequate financing, where such appears, is a factor, and an important factor, in determining whether to remove the insulation to stockholders normally created by the corporate method of operation. But in such a case it is incumbent upon the one seeking to pierce the corporate veil to show by evidence that the financial setup of the corporation is just a sham, and accomplishes injustice." (Id. at p. 493.) As found by the trial court appellants made no such showing.
EWM is doing business as The Roman Shade Company, which sells window coverings. With regard to the initial capitalization of $10,000, "[n]o evidence was introduced by either side (and the burden was on [appellants]) as to what would constitute a reasonable capital for such a company." (Carlesimo, supra, 87 Cal.App.2d at p. 490.) Also, "[p]ractically no evidence was introduced as to the nature or amount of business transacted" by EWM after its incorporation. (Ibid.) After incorporation in 2002, EWM was funded by moneys from The Roman Shade Company, and, as the court found, the corporation was apparently on sound financial footing for about five years. The fact that EWM was apparently doing business in the corporate form since 2002 "tends to indicate a good faith use of the corporation to conduct a legitimate business enterprise." (Seymour v. Hull & Moreland Engineering (9th Cir. 1979) 605 F.2d 1105, 1113.) Appellants rely on evidence regarding some of EWMs payroll expenses, i.e., that in certain months in 2007, respondent arranged for the distribution of corporate assets through the issuance of a large number of payroll checks for himself and his wife, and during certain—sometimes overlapping—months in 2007, appellants were not paid their full wages or commissions. However, such evidence does not establish "what amount of capital was reasonably necessary to carry" on the business. (Carlesimo, supra, 87 Cal.App.2d at p. 490.)
Neither the evidence nor legal authority supports appellants arguments that (1) the trial court was required to find that EWM and respondent were the alter egos of each other, (2) EWMs inability to pay appellants was the result of inadequate capitalization of only $10,000, (3) respondents distributions of payroll checks to himself and his wife during the same period in which EWM failed to pay appellants rendered EWM incapable of meeting its financial obligations, and (4) respondent should have further capitalized EWM or refrained from paying himself and his wife so that appellants could be paid their wages and commissions. Although the commissions owed to appellants Wymore and Swenson were based on completed sales, respondent testified the proceeds of those sales were not necessarily available to pay the commissions because the company was running in the red for a while. Respondent further testified that during 2007 EWM had available cash to make distributions for payroll purposes to respondent and his wife, but "for various reasons" EWM was unable to pay appellants what was owed to them in 2007 and 2008 for outstanding wages and commissions. Appellants did not further explore "the various reasons" that caused EWMs failure to pay appellants. Given the admission of the limited financial information concerning only payroll expenses of EWM during 2007, the trial court could, and evidently did, find that appellants "not only failed to show, as a fact, that the corporation was inadequately financed, but failed to show any causal connection between the financing and the injury" purportedly suffered by appellants, i.e., the nonpayment of their wages and commissions by EWM. (Carlesimo, supra, 87 Cal.App.2d at p. 493.)
Appellants complain it is not clear why the trial court waited until after the trial to pose a question about the sufficiency of the evidence. However, it was appellants responsibility to produce evidence to overcome the presumption of the separate existence of EWM. (MacPherson v. Eccleston, supra, 190 Cal.App.2d at p. 27.) Appellants cite no legal authority demonstrating that before the end of a bench trial the court is obliged to inform a party that the evidence is insufficient to meet its burden of proof. In the absence of legal authority supporting this argument, we deem the argument waived and do not address it. (Mansell v. Board of Administration (1994) 30 Cal.App.4th 539, 545 (Mansell); see Murphy v. Murphy (2008) 164 Cal.App.4th 376, 405 (Murphy) ["failure to cite pertinent legal authority is enough reason to reject the argument"].)
Nor do we see any merit to appellants various arguments that it would work an injustice to allow respondent to hide behind EWM because it was his decision, as a director and officer of EWM, not to pay appellants wages and commissions in 2007, while paying himself and his wife during the same calendar year. The fact that respondent, as the president of EWM, may have intentionally failed to pay appellants is not the type of conduct that requires piercing the corporate veil. (Sonora, supra, 83 Cal.App.4th at p. 539; see Auer, supra, 227 Cal.App.2d at p. 411; Associated Vendors, supra, 210 Cal.App.2d at pp. 836-837) In Sonora, supra, 83 Cal.App.4th 523, the court held that "injustice was not proved by [the corporations] apparent inability to meet the balance of its endowment obligation to the District. The alter ego doctrine does not guard every unsatisfied creditor of a corporation but instead affords protection where some conduct amounting to bad faith makes it inequitable for the corporate owner to hide behind the corporate form. Difficulty in enforcing a judgment or collecting a debt does not satisfy this standard." (Id. at p. 539, italics added; see also Katzirs Floor and Home Design, supra, 394 F.3d at p. 1149 [factual finding that individual defendant " formed "new" corporation... to continue conducting the same business... and to escape [plaintiffs] judgment " against former corporation was not sufficient to apply alter ego doctrine].)
II. Award of Attorney Fees to Respondent Pursuant to Section 218.5
Respondent was awarded the sum of $6,577.50 as attorney fees after the court found respondent was entitled to recover such fees as a prevailing party pursuant to section 218.5. In calculating the fee award, the court noted appellants did not challenge defense counsels hourly rates ($125/hour, $200/hour and $250/hour) or the amount of time spent on each task. To the extent certain tasks were "inextricably intertwined" with the defense of both respondent and EWM, the court awarded the entire sums requested for those activities. However, to the extent the court was able to ascertain that some of the tasks were attributable only to EWMs defense, the court disallowed those expenses. The court set forth its calculations indicating the date of service, the billed amount, the percentage chargeable to respondents defense, and the net monetary amount recoverable as attorney fees by respondent. Of relevance, the court only allowed recovery of $137.50 for several activities concerning appellants request for the production of documents, and disallowed $1,525, which the court found wholly attributable to EWMs defense, and not attributable to respondents defense. However, the court allowed recovery of $3,665, which was the full amount charged for mediation activities because those activities represented time that counsel would have spent whether he was representing respondent alone, or together with EWM.
Appellants challenge the award of attorney fees on the ground that respondent was not a prevailing party in an action brought for the nonpayment of wages as required by section 218.5. According to appellants, respondent was the prevailing party only on an issue of alter ego liability for the debt of a corporation that expressly admitted it knowingly violated the Labor Code. We conclude appellants arguments are without merit.
"On appeal, this court reviews a determination of the legal basis for an award of attorney fees de novo as a question of law." (California Wholesale Material Supply, Inc. v. Norm Wilson & Sons, Inc. (2002) 96 Cal.App.4th 598, 604.) We conclude, as did the trial court, that the statutory requirements allowing respondent to recover attorney fees pursuant to section 218.5 were met in this case. The cross-complaints Labor Code cause of action constituted an "action brought for the nonpayment of wages" against respondent, a named party in the action, and appellants requested attorney fees from respondent in the cross-complaint that initiated the action. (§ 218.5.) A request for attorney fees pursuant to section 218.5 is not dependent on the prevailing partys status as an employer subject to liability under the Labor Code, or the theories on which the losing party sought to impose liability on the prevailing party.
Additionally, the nature of the action against respondent was not changed by the amendment to the complaint adding the alter ego allegation, as appellants seem to suggest. In requesting an amendment to their cross-complaint, appellants did not seek to dismiss the Labor Code cause of action against respondent or waive the right to recover attorneys fees if they prevailed after trial. Instead, appellants informed the court that after the settlement with EWM, the same claims alleged against EWM remained against respondent. Appellants did not object when the court granted respondents request to dismiss the second, third and fourth causes of action in the cross-complaint, thereby leaving the allegations in the remaining Labor Code cause of action to be resolved by the court. In their post-trial brief, appellants specifically argued that if the trial court found EWM and respondent were alter egos of each other, the court should award attorney fees to appellants, as the prevailing parties, pursuant to section
218.5. Because respondent would have been liable for attorney fees had appellants prevailed at trial on the alter ego doctrine (and appellants make no argument to the contrary), section 218.5 allows respondent, as the prevailing party, to recover his attorney fees from appellants, the losing parties. (See Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 128-129 [defendant as prevailing party entitled to recover attorney fees under reciprocal contractual attorney fees provision in Civil Code section 1717 after plaintiff unsuccessfully sought to impose alter ego liability on defendant]; Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1111 [because plaintiff would have been entitled to recover contractual attorney fees if found to be a prevailing party under Civil Code section 1717, there is no question plaintiff is liable for attorney fees as a losing party].)Appellants also challenge the trial courts monetary amount awarded as attorney fees to respondent. We review the trial courts award of $6,577.50 for an abuse of discretion. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095-1096.) Appellants set forth various arguments as to why the amount awarded to respondent was inappropriate. However, appellants have failed to support their arguments with citations to the appropriate portions of the record and appropriate legal authority. (Cal. Rules of Court, rule 8.204(a)(1)(B)(C).) Because appellants have not complied with the court rules, we treat their arguments " "as waived, and pass [them] without consideration." [Citation.] " (Mansell, supra, 30 Cal.App.4th at p. 546; see Murphy, supra, 164 Cal.App.4th at p. 405.)
DISPOSITION
The judgment filed April 22, 2009, and the order filed June 19, 2009, are affirmed. Defendant Edgar Minto is awarded costs on appeal.
McGuiness, P.J.
We concur:
Siggins, J.
Jenkins, J.