Hernandez v. Vesme, Corp

Background

This Americans with Disabilities Act case concerned access to the defendants’ grocery store. On October 24, 2022, the court entered judgment for Gerardo Hernandez, awarding $4,000 in damages and ordering the defendants to bring the facility into compliance with the Act. On September 28, 2023, the court granted in part and denied in part Hernandez’s motion for attorney’s fees, awarding $231,001.70 in fees and costs.

Hernandez later moved to amend the judgment to correct the judgment debtors. He stated that Ramiro Chavez and Claudia Chavez had transferred ownership of the facility property to the Ramiro and Claudia Chavez Trust on April 2, 2020, while the case was pending. He said the transfer was an apparent attempt to avoid enforcement of the judgment and that the amounts awarded by the court had not been paid. He asked the court to identify the defendants’ trustee capacities so that he could record a lien against the property. The defendants did not oppose the motion.

Legal standard

Federal Rule of Civil Procedure 69(a) permits a judgment creditor to use enforcement methods consistent with the law of the state where the federal court sits. The court therefore applied Section 187 of the California Code of Civil Procedure, which allows a court to amend a judgment to add or correctly identify a judgment debtor.

Ordinarily, the procedure requires showing that the new judgment debtor is the former debtor’s alter ego and controlled the earlier litigation. “Alter ego” means that the separate legal identities of two people or entities should not prevent responsibility from being imposed where there is a unity of ownership and treating them as separate would cause fraud or injustice. The court also explained that California law may permit an amendment without a formal alter-ego finding when refusing to amend would cause an injustice and the amendment fits the purpose of the alter-ego rule.

Court’s analysis

The court concluded that the principles behind the alter-ego requirement supported amending the judgment. It found that Ramiro Chavez and Claudia Chavez created the trust and transferred the facility property to it while the litigation was pending. The court also stated that, in a later case-management statement, the defendants falsely represented that they were unaware of entities with a financial or other interest that could be substantially affected by the case. The defendants did not contest whether Section 187 applied.

The court separately found that the litigation-control requirement was satisfied. Ramiro Chavez and Claudia Chavez were the trust’s sole trustees and had litigated the case from its beginning. Because the same individuals had participated in the litigation, the court found that amending the judgment raised no due-process concerns.

Ruling

The court amended the October 24, 2022 judgment, as amended by the September 28, 2023 fees order, to reflect a total award of $235,001.70 in damages, attorney’s fees, and costs. It corrected the judgment-debtor names to “Ramiro Chavez, individually and as Trustee of the Ramiro and Claudia Chavez Trust dated April 2, 2020” and “Claudia Chavez, individually as Trustee of the Ramiro and Claudia Chavez Trust dated April 2, 2020,” respectively. The clerk may issue an abstract of judgment with those corrected names upon submission of the appropriate forms.