Butler America v. Aviation Assurance Co., LLC
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The Court of Appeal affirmed the trial court's order amending the judgment to add alter egos as judgment debtors. In this case, the trial court ordered that Craig Garrick individually and the Garrick entities be added to a judgment Butler America has against AFS.
The court held that the release clause in the settlement agreement does not release Garrick and the Garrick entities because the express terms of the release clause excludes the release of any action to enforce the settlement agreement; AFS's breach of the settlement agreement terminated the agreement, including the releases; when the stipulated judgment was entered on the settlement agreement, it terminated all of AFS's and its third party beneficiaries' rights in the agreement, including the releases; and the trial court's finding of fraud are supported by substantial evidence. The court also held that the trial court did not err in finding that Garrick and the Garrick entities are alter egos of AFS. In this case, AFS was nothing but a shell; it had no substantial business activity and no income with which to pay its debts; and its only function was to act as a screen for Garrick and the Garrick entities. Finally, Butler is not equitably estopped from denying the separate existence of AFS and the Garrick entities, and the authority of the trial court to add alter egos as judgment debtors has long been recognized.
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