Hacker v. Fabe, 92 Cal. App. 5th 1267 (2023)

In 2005, attorney Jacqueline Fabe filed claim for unpaid wages against her employer with the Labor Commissioner.  Her employer then filed a malpractice suit against Fabe, and Fabe in response filed a retaliation suit with the Labor Commissioner.  Fabe and the Labor Commissioner later won on all claims.  In March 2010, Fabe filed a motion to add Ron Hacker, the principal of Fabe’s former employer, to the judgment as a judgment debtor.  This motion was denied without prejudice.  Fabe and the Commissioner tried to enforce the judgment against Fabe’s employer for years without success.

After years of back-and-forth, in 2020, the trial court granted a motion by the Labor Commissioner to amend the judgment to add Hacker as an alter ego judgment debtor. Hacker appealed this order. He contended there was “virtually no evidence” he commingled his assets or operations with those of the judgment debtor; that the original judgment was not renewed during the 10-year limitation period; the doctrine of laches bars the alter ego motion; and the denial of an earlier alter ego motion barred the current motion under res judicata principles.

The Court of Appeal rejected Hacker’s arguments and affirmed the trial court’s order and judgment.  The court cited Hacker’s complete control over Fabe’s former employer, his control of the litigation, his sharing of attorneys with Fabe’s former employer, his transfer of the company to another person immediately after the judgment and his destruction of relevant records of assets as evidence that Hacker acted in bad faith and was hiding behind the corporate shell of Fabe’s former employer.  Hacker’s other arguments for why he should not be added as a judgment debtor were also rejected.