Striking alter ego allegations in California is the topic of this blog post.
In order to request a court order striking allegations of alter ego liability in California you will have to file a motion to strike the alter ego allegations. The motion to strike could be filed in response to any complaint or cross-complaint that contains allegations of alter ego liability, particularly if those allegations are devoid of any factual details and are mostly generic boilerplate allegations as those types of allegations do not state enough facts to support an alter ego claim.
I have worked in California and Federal litigation since 1995. I worked on a case a month or so ago in which the plaintiff had filed an original complaint that did not contain any alter ego allegations against the owner of a corporation and a limited liability company. In fact the original complaint not only did not even name the owner as an individual defendant it did not contain any alter ego allegations against any named defendant.
The plaintiff in that case later discovered that at least one of the fictitious business entities named as a defendant had been suspended from doing business in the State of California and any judgment against that party would have not been worth the paper it was printed on. Once the plaintiff discovered that fact they filed a motion for leave to file a first amended complaint which was granted. I began working on the case after the first amended complaint had been filed and served.
I carefully reviewed and compared both the original complaint and the first amended complaint and quickly realized the obvious fact that the owner was only named as an individual defendant in order to exert financial pressure on them to settle the case. I then performed further research on alter ego liability in California law which uncovered the fact that the law is clear in California that generic boilerplate allegations will not support an alter ego claim. I then prepared a motion to strike the alter ego allegations of the first amended complaint along with several other portions.
Grounds for requesting an order striking alter ego allegations in California.
As I mentioned earlier the law is settled in California that boilerplate allegations alleging that “each defendant was the agent and employee of every other co-defendant” have been described by both the California Supreme Court and California Courts of Appeal in published decisions as an example of generic boilerplate secondary liability allegations.
The reality is that many complaints include alter ego allegations that are merely generic boilerplate allegations that essentially rely on rote and conclusory allegations of agency and alter ego. Arbitrary contentions that defendants are alter egos of each other is not proper pleading practice as it deprives the individual defendants of an opportunity to respond to the allegations against them.
The law in California also states that any imposing of alter ego liability be approached with caution and that the burden is on the plaintiff to overcome the presumption of the separate existence of the corporate entity. For example plaintiffs cannot allege a sufficient alter ego claim merely by including allegations that it may be difficult for them to enforce a judgment or recover losses from the wrongdoers unless alter ego liability is imposed.
Sample motion to request an order striking alter ego allegations in California.
Attorneys or parties in California that would like to view a portion of a 16 page sample motion to strike alter ego allegations containing brief instructions, a memorandum of points and authorities with citations to case law and statutory authority, sample declaration and proof of service by mail sold by the author can use the link shown below.
The author of this log post, Stan Burman, is a freelance paralegal who has worked in California and Federal litigation since 1995 and has created over 300 sample legal documents for sale.
For licensed attorneys and law firms that need assistance with any California or Federal litigation matters, Mr. Burman is available on a freelance basis. Mr. Burman may be contacted by e-mail at DivParalgl@yahoo.com for more information. He accepts payments through PayPal which means that you can pay using most credit or debit cards.
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Please note that the author of this blog post, Stan Burman is NOT an attorney and as such is unable to provide any specific legal advice. The author is NOT engaged in providing any legal, financial, or other professional services, and any information contained in this blog post is NOT intended to constitute legal advice.
The materials and information contained in this blog post have been prepared by Stan Burman for informational purposes only and are not legal advice. Transmission of the information contained in this blog post is not intended to create, and receipt does not constitute, any business relationship between the author and any readers. Readers should not act upon this information without seeking professional counsel.