Webber v. Inland Empire Investments, Inc

In Webber v. Inland Empire Investments, Inc. (1999) 74 Cal.App.4th 884, the defendant corporations were sued by a creditor. The trial court pierced the corporate veil as to some of the causes of action, but allowed the plaintiff to proceed against the individual corporate defendants as to another cause of action for conspiracy to interfere with a contract. On appeal, the defendants argued that this was an impossibility since the court had found the corporations to be the alter egos of one another and a certain Mr. Previti. Thus, the defendants argued, they could not conspire with themselves. The court relying on Shapoff v. Scull (1990) 222 Cal. App. 3d 1457, 3 1470, 272 Cal. Rptr. 480 stated, "disregard of the corporate entity is in no sense automatic." "Thus it is plain that contrary to the defendants' argument on appeal, abuse of the corporate privilege by itself does not require that a court disregard the separate identity of a corporation. There must be some equitable purpose which will be served by ignoring the corporate form." ( Shapoff v. Scull, supra, at p. 1471.) The court then determined that a trial court's finding of alter ego does not prevent a jury from finding the alter ego entities liable for tortious interference with contract, nor does it prevent the trial court from entering judgment on a jury's verdict in such a circumstance. What is important to this case, however, is the court's holding that the alter ego doctrine cannot be used as a sword to preclude liability or as a shield to protect defendants from otherwise tortious conduct. In each case it is for the trial court to determine, on a cause of action by cause of action analysis, whether the doctrine should be applied in order to prevent an inequitable result. ( Webber v. Inland Empire Investments, Inc., supra, 74 Cal.App.4th at p. 901.)