King

FACTS

Plaintiff Ron King owned a cabinet making business in the 1990’s and early 2000’s. The business was organized as a corporation named National West Manufacturing, Inc.1 King retained defendant Stephen M. House as his certified public accountant, and they became close friends. House embezzled millions of dollars from King’s business by telling King to send his tax deposits to House’s firm instead of

1Records filed with the California Secretary of State and available online show the corporation filed its articles of incorporation in November 1985 and a certificate of dissolution in February 2008. We have not taken judicial notice of the official records because these facts are provided as background and do not affect the outcome of this appeal.

2. sending them directly to the taxing authorities. House kept the money and filed false tax returns on behalf of King and his company. When the scheme was discovered, the taxing authorities notified King that he owed millions of dollars in back taxes. These events resulted in the loss of King’s business and the demise of his marriage. Federal criminal charges were brought against House. In October 2006, House pleaded guilty to one…