Diana Guadalupe Chiapana vs Jaspinder Grewal et al.

I. BACKGROUND In 2019, Dominic DeBiaso pursued his former employer, Care Intranet Inc. (“CII”), for unpaid wages. (Complaint, ¶4). On February 26, 2019, a hearing was held at the offices of the California Labor Commissioner. (Complaint, ¶5). Defendant Puneet D. Grewal (“Puneet”)23, represented by counsel, was found not individually liable and was dismissed. (Complaint, ¶¶6 – 7). Defendant Jaspinder P. Grewal (“Jaspinder”) was not served in the Labor Commissioner matter. CII was served, but did not put on a defense. (Complaint, ¶10).

The Labor Commissioner issued an “Order, Decision or Award” on May 8, 2019 in favor of Dominic DeBiaso and against CII. (Complaint, ¶11 and Exh. 1). Judgment based upon the Labor Commissioner’s Order was entered in Santa Clara County Superior Court on July 22, 2019 in the total amount of $36,203.77 (“Judgment”) in case number 19CV352304 (“Underlying Action”). (Complaint, ¶12 and Exh. 2).

On November 9, 2020, the original judgment creditor, Dominic DeBiaso, transferred and assigned all rights, title, and interest in the Judgment to Phillip Erkenbrack. (Complaint, ¶13).

On November 8, 2023, Phillip Erkenbrack transferred and assigned all rights, title, and interest in the Judgment to plaintiff Diana C. Guadalupe Chipana dba Wealth Recovery Solutions (“Plaintiff”). (Complaint, ¶14).

No money has been paid on the Judgment and, as of May 18, 2025, the balance has risen to $57,301.14 with interest continuing to accrue at 10% per annum. (Complaint, ¶¶15 – 16).

Plaintiff now brings a separate and independent action against defendants Jaspinder and Puneet (collectively, “Grewals” or “Defendants”) on an alter ego theory to enforce the prior Judgment against the corporation, CII.

On July 8, 2025, Plaintiff filed a verified complaint against defendant Grewals asserting a single cause of action “For Alter Ego Liability to Add Defendants Jaspinder P. Grewal and Puneet D. Grewal as Additional Judgment Debtors.”

On October 14, 2025, defendant Grewals filed the motion now before the court, a demurrer to Plaintiff’s Complaint.

II. LEGAL STANDARD Pursuant to Code of Civil Procedure section 430.10, a party may demur to a complaint on the grounds that it “does not state facts sufficient to constitute a cause of action.” (Code Civ. Proc., § 430.10, subd. (e)). A demurrer tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747 (Hahn)). When considering demurrers, courts accept all well pleaded facts as true. (Fox v. JAMDAT Mobile, Inc. (2010) 185 Cal.App.4th 1068, 1078). In ruling on a demurrer, the Court treats it “as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Piccinini v. Cal. Emergency Management Agency (2014) 226 Cal.App.4th 685, 688, citing Blank v. Kirwan (1985) 39 Cal.3d 311, 318 (Blank)).

23 The court refers to defendants by their first names for the sake of clarity and means no disrespect. 31

“A general demurrer will lie where the complaint ‘has included allegations that clearly disclose some defense or bar to recovery.’ [Citation.]” (Cryolife, Inc. v. Superior Court (2003) 110 Cal.App.4th 1145, 1152). Defendants Chen and YESI generally demur to Plaintiff’s first cause of action for negligence because the FAC includes allegations that Plaintiff released defendant Chen and other parties from all liability for the accident. (FAC, ¶12 and Exh. A). “The existence of a valid release is a complete defense to a tort action against the releasee.” (Rodriguez v. Oto (2013) 212 Cal.App.4th 1020, 1026 (Rodriguez)).

Where the complaint's allegations or judicially noticeable facts reveal the existence of an affirmative defense, the "plaintiff must 'plead around' the defense, by alleging specific facts that would avoid the apparent defense. Absent such allegations, the complaint is subject to demurrer for failure to state a cause of action . . . .” (Gentry v. eBay, Inc. (2002) 99 Cal.App.4th 816, 824).

The doctrine of res judicata may be raised on demurrer. (See Lincoln Property Co. v. Travelers Indemnity Co. (2006) 137 Cal.App.4th 905).

“As generally understood, ‘[t]he doctrine of res judicata gives certain conclusive effect to a former judgment in subsequent litigation involving the same controversy.’ [Citation.] The doctrine ‘has a double aspect.’ [Citation.] ‘In its primary aspect,’ commonly known as claim preclusion, it ‘operates as a bar to the maintenance of a second suit between the same parties on the same cause of action. [Citation.]’ [Citation.] ‘In its secondary aspect,’ commonly known as collateral estoppel, ‘[t]he prior judgment . . . “operates” ’ in ‘a second suit . . . based on a different cause of action . . .“as an estoppel or conclusive adjudication as to such issues in the second action as were actually litigated and determined in the first action.” [Citation.]’ [Citation.] ‘The prerequisite elements for applying the doctrine to either an entire cause of action or one or more issues are the same: (1) A claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceeding. [Citations.]’ ” (People v.

Barragan (2004) 32 Cal.4th 236, 252–253, 9 Cal.Rptr.3d 76, 83 P.3d 480). (Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 797).

“In deciding whether to apply collateral estoppel, the court must balance the rights of the party to be estopped against the need for applying collateral estoppel in the particular case, in order to promote judicial economy by minimizing repetitive litigation, to prevent inconsistent judgments which undermine the integrity of the judicial system, or to protect against vexatious litigation.” (Alvarez v. May Dept. Stores Co. (2006) 143 Cal.App.4th 1223, 1233).

III. ANALYSIS Defendant Grewals demur on the ground that the Plaintiff’s complaint is barred by the doctrine of res judicata.

Here, Plaintiff’s complaint expressly states Code of Civil Procedure section 18724 vests the court with “the power to add a judgment debtor where a person or entity is an alter ego of the original judgment debtor. In doing so, the court is amending the judgment to add the real judgment debtor.” (Complaint, ¶17). Plaintiff’s complaint goes on to allege and explain that a plaintiff may bring a motion in the original action or file a separate independent action to add a judgment debtor who was an alter ego of the original judgment debtor. “In petitioning the trial court to amend a

24 Code Civ. Proc., §187 states, “When jurisdiction is, by the Constitution or this Code, or by any other statute, conferred on a Court or judicial officer, all the means necessary to carry it into effect are also given; and in the exercise of this jurisdiction, if the course of proceeding be not specifically pointed out by this Code or the statute, any suitable process or mode of proceeding may be adopted which may appear most conformable to the spirit of this Code.” 32

judgment to add an alter ego defendant, must the plaintiff proceed by a motion in the original action, or may plaintiff proceed by complaint in an independent action on the judgment? Either procedure will do.” (Lopez v. Escamilla (2020) 48 Cal.App.5th 763, 763 (Lopez); see also Highland Springs Conference & Training Center v. City of Banning (2016) 244 Cal.App.4th 267, 288—“As an alternative to filing a section 187 motion to add a judgment debtor to a judgment, the judgment creditor may file an independent action on the judgment, alleging that the proposed judgment debtor was an alter ego of an original judgment debtor.”)

Defendant Grewals ask the court to take judicial notice of the memorandum of points and authorities Plaintiff filed in the Underlying Action to amend judgment to add alter-egos [defendant Grewals] to judgment as well as Plaintiff’s declaration filed in the Underlying Action in support of her motion to amend judgment to add alter-egos [defendant Grewals] to judgment. Defendant Grewals also ask this court to take judicial notice of the court’s (Hon. E. Pennypacker) January 29, 2025 order denying Plaintiff’s motion in the Underlying Action to amend the judgment. As these are all court records, this court will take judicial notice of the requested documents.

Evidence Code section 452 and 453 permit the trial court to “take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached—in the documents such as orders, statements of decision, and judgments—but [the court] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.” (People v. Woodell (1998) 17 Cal.4th 448, 455).

From the judicially noticed court records from the Underlying Action, defendant Grewals ask the court to find Plaintiff’s complaint now barred by the doctrine of res judicata or collateral estoppel since Judge Pennypacker has already denied Plaintiff’s motion and the issues raised are the same. The authorities cited by Plaintiff in the complaint allowing an independent action instead of making a motion in the Underlying Action make clear that the procedures are allowed, in the alternative. As defendant Grewals argue, Plaintiff cannot do both.

Plaintiff’s argument in opposition appears to be that the issues are not the same as the elements necessary to establish alter ego are different from the elements necessary for a court to add a judgment debtor. Plaintiff acknowledges that:

To prevail on a motion to add a judgment debtor, the judgment creditor generally must show, by a preponderance of the evidence, that “(1) the parties to be added as judgment debtors had control of the underlying litigation and were virtually represented in that proceeding; (2) there is such a unity of interest and ownership that the separate personalities of the entity and the owners no longer exist; and (3) an inequitable result will follow if the acts are treated as those of the entity alone.”

(Favila v. Pasquarella (2021) 65 Cal.App.5th 934, 947; see also Toho-Towa Co., Ltd. v. Morgan Creek Productions, Inc. (2013) 217 Cal.App.4th 1096, 1106 (Toho)—“The ability under section 187 to amend a judgment to add a defendant, thereby imposing liability on the new defendant without trial, requires both (1) that the new party be the alter ego of the old party and (2) that the new party had controlled the litigation, thereby having had the opportunity to litigate, in order to satisfy due process concerns.”)

However, to establish alter ego, a plaintiff need only establish the second and third elements. “[T]wo 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.” (Tucker Land Co. v. State of California (2001) 94 Cal.App.4th 1191, 1202; see also Hasso v. Hapke (2014) 227 Cal.App.4th 107, 155). Indeed, the cases setting forth these two elements for alter ego are legion.

Plaintiff suggests the first element identified above from Favila is unique to the amendment of a judgment made pursuant to a motion under Code of Civil Procedure section 187 and it was this first element that Judge Pennypacker found lacking and served as the basis for her denial of the motion. As such, Plaintiff contends res judicata/ collateral estoppel does not apply because Judge Pennypacker did not reach the actual merits of whether defendant Grewals were alter egos of CII.

The court finds merit to Plaintiff’s position. The requirement that the party to be added to the judgment had control of the underlying litigation is, as Favila states, needed to prevail on a motion to add a judgment debtor. Likewise, the excerpt from Toho cited above seems to impose this requirement in order to “impos[e] liability on the new defendant without trial.” And in Lopez, the court explained:

It does not matter whether the petition alleging Escamilla is an alter ego of the corporation is labeled a complaint or a motion, or whether the petition is assigned a case number different from the underlying action. The substantive question is whether Escamilla is, in fact, an alter ego. “The law respects form less than substance.” (Civ. Code, § 3528). Either a complaint or a motion is sufficient.(Lopez v. Escamilla (2020) 48 Cal.App.5th 763, 765; emphasis added).

Thus, since Judge Pennypacker’s ruling did not reach the actual merits of the issue of whether defendant Grewals were the alter egos of CII, the doctrine of res judicata/ collateral estoppel does not bar Plaintiff’s complaint.

IV. CONCLUSION Based on the foregoing, defendant Grewals’ demurrer to Plaintiffs’ complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)], i.e., the Plaintiff’s complaint is barred by the doctrine of res judicata and/or collateral estoppel, is OVERRULED.

The Court will prepare the formal Order.

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