Under California corporations law, a corporate director generally has an absolute right to inspect the corporation’s books and records. In Wolf v. CDS Devco, the California Court of Appeal held that a trial court properly declined to enforce a director’s demand for inspection where the director’s term expired after the demand for inspection.
When more than one party is liable for injury to a third party, California law permits a responsible party who has paid the injured third party to obtain partial reimbursement from the other liable parties through equitable indemnity. A claim for equitable indemnity does not exist until one of the responsible parties makes payment on… read more
Many businesses are subject to regulation on more than one level. A business may be subject to federal regulation, state regulation, and local regulation. A common challenge to the enforcement of a state or local regulation is the argument that the regulation is preempted by the law of a higher level government.
California law requires a court to grant a party relief from a default or dismissal if the party is innocent of any wrongdoing and the default or dismissal is solely the result of the mistake, surprise, or neglect of that party’s attorney. In Gutierrez v. G & M Oil Company, Inc., the California Court of… read more
A plaintiff who loses a lawsuit brought under the federal Fair Debt Collections Practices Act is not liable for the defendant’s court costs except in the unusual circumstance that the trial court finds the plaintiff sued in bad faith and for purposes of harassment. Normally, a party who loses a lawsuit is liable for the… read more
Small businesses should not only think carefully about the appropriate form for the operation of the business, but also for the possible end of the business. When a corporation ceases doing business, it may be dissolved. However, not all states treat a dissolved corporation the same a California does. This distinction was recently illustrated in… read more
Prior posts on this blog have discussed the remedies available to those dealing with unlicensed contractors. One available remedy is an action pursuant to California Business and Professions Code section 7031(b) to obtain a refund of all amounts paid to the unlicensed contractor. A recent decision by the Ninth Circuit Court of Appeals held that… read more
Corporate shares with no current market value may not be ordered transferred to satisfy a money judgment. In Ho v. Hseih, the California Court of Appeal reversed a trial court order directing a judgment debtor (a person who owes money on a judgment) to transfer her shares to the judgment creditor. The judgment debtor held… read more
In Berg & Berg Enterprises, LLC v. Boyle, the California Court of Appeal held that directors of a incorporation danger of becoming insolvent do not owe a fiduciary duty to the company’s creditors. The debtor company in Berg & Berg was failing and entered into an assignment for the benefit of creditors instead of filing… read more
A corporate shareholder’s creditors may not “pierce the corporate veil” to reach the corporation’s assets to satisfy claims against the shareholder. Under very limited circumstances, a court will disregard the corporate form so that a shareholder’s personal assets are subject to claims against the corporation. However, in Postal Instant Press v. Kaswa Corp., the California… read more