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Davila v. Nickell10/26/2005
the special verdict form, counsel additionally asserted that the court's alter ego finding was relevant to the joint venture issue: "'Do you find the following individuals or defendants were involved in a joint venture for the remodel?' Absolutely. His Honor is going to also I believe instruct you of the finding of the alter ego, that is Joadd, Sun Villa, R.N.D. Investments, were the alter ego of Sun Louie, Kay Louie, Rumjahn and Nickell, not of Rodriguez. That is a simple question to answer." However, Davila's counsel did not refer to the court's alter ego finding when referencing the agency question on the special verdict form. Instead, he focused on testimony at trial concerning the Louies' relationship with Rumjahn, including their directions to Rumjahn to do "whatever is necessary" to get the job done, and the Louies' involvement in hiring joint counsel to defend against Barraza's initial lawsuit.
During the ensuing jury instructions, the court instructed the jury that Sun Villa Inc. "is the alter ego of the principal owners of said alleged corporation; that is, the corporate veil is pierced and the principals/owners of said . . . alleged corporation are individually liable for the liability of Sun Villa, Inc. . . . in this action." The court gave a similar instruction with respect to corporate defendant Joadd.
2. Analysis
We agree with the Louies that it was improper for the court to instruct the jury on its alter ego finding. Although the evidence on the alter ego and liability issues was overlapping, the court's finding on the alter ego issue was not relevant to any disputed issue in the liability case. The jury's task at trial was to determine the identity of the employer, whether the defendants rebutted the negligence presumption, the existence of agency and joint venture relationships, causation, and the extent of the damages. The court's equitable finding on the alter ego doctrine had no relevance to the jury's determinations on these issues and there was no need to instruct the jury that the court had made this finding. Moreover, because much of the evidence relating to the alter ego doctrine was also relevant to agency and joint venture theories and to credibility issues before the jury, the instruction could potentially confuse the jury.
However, on our review of the entire record, we conclude there was no reasonable probability that the jury improperly relied on the court's alter ego instruction to reach its factual conclusions. (See Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 574-580.) The Louies argue that the instruction was prejudicial because it permitted the jury to use the alter ego ruling "as a springboard to obtaining favorable findings on agency and joint venture." They maintain that the instruction "was tantamount to a directed verdict on agency and joint venture," particularly given counsels' use of the alter ego finding in their closing arguments. (Underscoring omitted.)
These arguments are unsupported by the record. First, based on the other jury instructions, the jury would have reasonably understood that it was required to resolve the factual issues relevant to the agency and joint venture issues and that it should not be influenced by the court's finding regarding individual liability for corporate acts. Immediately after telling the jury that "I just read to you the alter ego finding of the court," the court told the jury, "I have not intended by anything I have said or done or any questions I may have asked or by any rulings that I may have made to suggest how you should decide any questions of fact, that I believe or disbelieve any witness. If anything I have done or said seems to so indicate, you must disregard
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