                                                             FILED
                 UNITED STATES COURT OF APPEALS              FEB 17 2015

                                                          MOLLY C. DWYER, CLERK
                        FOR THE NINTH CIRCUIT              U.S. COURT OF APPEALS




ROBERT A. POLITTE; JOAN M.            No. 12-55927
POLITTE; TRKSS, LLC,
                                      D.C. No. 3:07-cv-01950-AJB-
          Plaintiffs - Appellants,    WVG

 v.
                                      ORDER
UNITED STATES OF AMERICA,

          Defendant - Appellee.



ROBERT A. POLITTE,                    No. 12-55928

          Plaintiff,                  D.C. No. 3:07-cv-01950-AJB-
                                      WVG
TRKSS, LLC,

          Plaintiff,

 And

JOAN M. POLITTE,

          Plaintiff - Appellant,

 v.

UNITED STATES OF AMERICA,

          Defendant - Appellee.
ROBERT A. POLITTE; JOAN M.                      No. 12-55929
POLITTE,
                                                D.C. No. 3:07-cv-01950-AJB-
              Plaintiffs,                       WVG

  And

TRKSS, LLC,

              Plaintiff - Appellant,

  v.

UNITED STATES OF AMERICA,

              Defendant - Appellee.


Before:      W. FLETCHER and BYBEE, Circuit Judges, and SETTLE,
             District Judge.*


       The memorandum disposition filed December 3, 2014, is amended as

follows:

       On page 5, lines 5–6:

       The text <both were owned by the Polittes, led by the same management

team, and operated as a “single enterprise.”> is replaced with <both were owned by




       *
             The Honorable Benjamin H. Settle, District Judge for the U.S. District
Court for the Western District of Washington, sitting by designation.

                                        -2-
the Polittes and led by the same management team, and the Polittes unilaterally

made decisions and controlled policies affecting both companies.>.

      On page 5, lines 9–12:

      The final two sentences of the paragraph, and the accompanying citation, are

replaced with <Without maintaining formalities and, for the most part, without

repayment, RAJMP transferred funds to TRKSS for non-RAJMP purposes, such as

the financing of TRKSS operations.>.

      With this amendment, Judges W. Fletcher and Bybee have voted to deny the

petitions for rehearing and petitions for rehearing en banc. Judge Settle so

recommends.

      The full court has been advised of the petitions for rehearing en banc and no

judge of the court has requested a vote on them.

      The petitions for rehearing and petitions for rehearing en banc are DENIED.

No further petitions for rehearing or for rehearing en banc may be filed.




                                         -3-
                                                                            FILED
                           NOT FOR PUBLICATION                               FEB 17 2015

                                                                         MOLLY C. DWYER, CLERK
                     UNITED STATES COURT OF APPEALS                       U.S. COURT OF APPEALS



                            FOR THE NINTH CIRCUIT


ROBERT A. POLITTE; JOAN M.                       No. 12-55927
POLITTE; TRKSS, LLC,
                                                 D.C. No. 3:07-cv-01950-AJB-
              Plaintiffs - Appellants,           WVG

  v.
                                                 AMENDED MEMORANDUM*
UNITED STATES OF AMERICA,

              Defendant - Appellee.



ROBERT A. POLITTE,                               No. 12-55928

              Plaintiff,                         D.C. No. 3:07-cv-01950-AJB-
                                                 WVG
TRKSS, LLC,

              Plaintiff,

  And

JOAN M. POLITTE,

              Plaintiff - Appellant,

  v.


        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
UNITED STATES OF AMERICA,

               Defendant - Appellee.



ROBERT A. POLITTE; JOAN M.                       No. 12-55929
POLITTE,
                                                 D.C. No. 3:07-cv-01950-AJB-
               Plaintiffs,                       WVG

  And

TRKSS, LLC,

               Plaintiff - Appellant,

  v.

UNITED STATES OF AMERICA,

               Defendant - Appellee.


                    Appeal from the United States District Court
                       for the Southern District of California
                    Anthony J. Battaglia, District Judge, Presiding

                      Argued and Submitted November 18, 2014
                                Pasadena, California

Before:        W. FLETCHER and BYBEE, Circuit Judges, and SETTLE,
               District Judge.**




          **
             The Honorable Benjamin H. Settle, District Judge for the U.S. District
Court for the Western District of Washington, sitting by designation.
      Taxpayers Robert Politte, Joan Politte, and TRKSS, LLC, appeal from the

district court’s judgment denying their claims for a tax refund under 26 U.S.C. §

7426(a). We have jurisdiction under 28 U.S.C. § 1291. We review the district

court’s determination that one party is the “alter ego” of another for clear error.

Wolfe v. United States, 798 F.2d 1241, 1243 n.2 (9th Cir. 1986). Finding no clear

error, we affirm.

      This case arises out of the liability of RAJMP, Inc., a California corporation,

for unpaid employment taxes. The Internal Revenue Service (IRS) contends that

Appellants are liable for RAJMP’s unpaid taxes, on the ground that they are the

“alter egos” of RAJMP (or, alternatively, held title to certain assets as RAJMP’s

“nominees”). Appellants disagree. They filed the instant refund suit to recover the

value of certain assets sold to satisfy RAJMP’s debts. After a bench trial, the

district court entered judgment for the IRS, finding both that Appellants were

RAJMP’s alter egos and that they held title to certain assets as its nominees.

      The district court did not clearly err in finding that Robert and Joan Politte

were RAJMP’s alter egos. Under California law, to “pierce the corporate veil,” a

creditor must show “(1) that there be such unity of interest and ownership that the

separate personalities of the corporation and the individual no longer exist and (2)

that, if the acts are treated as those of the corporation alone, an inequitable result


                                            3
will follow.” Mesler v. Bragg Mgmt. Co., 702 P.2d 601, 606 (Cal. 1985) (internal

quotation marks and citation omitted).

      Here, ample evidence supported the district court’s finding that a “unity of

interest and ownership” existed between the Polittes and RAJMP. Robert and Joan

Politte were the majority shareholders of RAJMP, exercised substantial control

over the corporation’s operations, and regularly drew on corporate funds to finance

personal expenses. Although Robert exercised more control than Joan, Joan

nonetheless served as corporate secretary and signed checks on behalf of RAJMP.

The district court’s finding that a “unity of interest and ownership” existed

between the Polittes and RAJMP is well supported by the record.

      The district court did not clearly err in finding that an “inequitable result”

would follow from adherence to the corporate form. See Mesler, 702 P.2d at 606;

Orloff v. Allman, 819 F.2d 904, 909 (9th Cir. 1987). Here, the record demonstrates

that, by 2005, the Polittes owed RAJMP over $1 million, well more than the

$343,987.03 recovered by the IRS from the sale of the Polittes’ condominiums.

The record also supports the district court’s finding that the Polittes borrowed

money without maintaining corporate formalities. Given that RAJMP had profits

to “lend” to the Polittes by virtue of its failure to pay its employment taxes, it




                                            4
would be “inequitable” to prevent the IRS from recovering some portion of those

taxes from the Polittes.

      The district court also did not clearly err in finding that TRKSS was

RAJMP’s alter ego. A “unity of interest and ownership” existed between the two

corporations: both were owned by the Polittes and led by the same management

team, and the Polittes unilaterally made decisions and controlled policies affecting

both companies. See Las Palmas Assocs. v. Las Palmas Ctr. Assocs., 1 Cal. Rptr.

2d 301, 318 (Ct. App. 1991). Nor did the district court err in finding that an

“inequitable result” would follow from adherence to the corporate form. Without

maintaining formalities and, for the most part, without repayment, RAJMP

transferred funds to TRKSS for non-RAJMP purposes, such as the financing of

TRKSS operations.

      Because the district court did not clearly err in finding that Appellants were

RAJMP’s alter egos, we need not decide whether Appellants also held title to

certain assets as RAJMP’s nominees.

      AFFIRMED.




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