Sample complaint for california with alter ego allegations by stan burman on scribd. Many entrepreneurs create business entities to operate their businesses, to facilitate commercial ventures, and to shield themselves from personal liability. How to pierce the corporate veil under new york law image. Determining when a business has pierced the veil as most professionals in the legal and insurance fields are aware, the law permits a business to incorporate for the purpose of permitting the business owner to escape personal liability as long as there is no comingling of funds andor the privilege of the separation is not abused so as to permit the piercing of the corporate. Alter ego doctrine and piercing the corporate veil. Piercing the corporate veil in california legaldocspro, llc. Personal liability of corporate officers and directors for tortious conduct. Batratchenko was not a party to that pleading, and therefore was 6.
Piercing the corporate veil in california legal blog. While pennsylvania courts do not squarely address whether a. So much for any personal liability of shore based on a piercing of the corporate veil as to him. Those seeking to pierce the corporate veil must show that the corporation or llc was dominated in connection with the transaction at issue and that the domination was the instrument of fraud or otherwise resulted in wrongful or inequitable consequences. How to pierce the corporate veil under new york law law. Strategies regarding corporate veil piercing and alter ego doctrine july 31, 2018 12 opus e. Current laws in new york regarding piercing the corporate veil. In conducting the research for their paper, which is titled the three justifications for piercing the corporate veil, macey and mitts performed a sophisticated data analysis on more than 9,000 opinions in search of instances where plaintiffs succeeding in uncovering the owners behind a corporate form.
Paul godfread 389316 100 south fifth street, suite 1900 minneapolis, mn 55402 612 2847325 attorney for plaintiff, alan cooper acknowledgment. Influenced by robert thompsons pathbreaking study of veil piercing in state and federal courts, veil piercing scholars have since 1991 focused their research. This means creditors can go after the owners home, bank account, investments, and other assets to satisfy the corporate debt. Litigated cases may not serve as a truly representative sample of all the corporate. There are, however, limited circumstances where michigan courts will ignore the liability protection afforded by the corporate form and pierce the corporate veil to hold the individual business owner personally liable. In outsider reverse corporate piercing, the same general principles apply. On april 28, 2009, thompson hine filed on ses behalf a verified complaint for. For such other relief as the court determines to be fair and equitable. Ann groninger, patterson harkavy llp, charlotte, nc. When must a claim to pierce the corporate veil be brought.
However, piercing the corporate veil is easier said than done. The court also noted that a claim of corporate veil piercing did not require fed. Reviewing a sample complaint requesting piercing of a corporate veil may be instructive in noting what courts and plaintiffs attorneys look for although this is. Instead, corporate veil piercing is an equitable doctrine which allows a corporations separate. In order to pierce the corporate veil, a plaintiff must show that. Generally, a plaintiff seeking to pierce the corporate veil must show. A complaint s factual allegations must be enough to raise a right to relief above the. Avoiding member liability for business debts paul b. A corporate officer may not be held individually liable on a contract unless he signed in an individual capacity, or unless the corporate veil was pierced or the corporate entity should be ignored because it was found to be formed or used for fraudulent purposes, or where the corporation was merely the alter ego of the shareholder. Part of a large network of real estate companies a.
Piercing the corporate veil in california allows a plaintiff to pierce the corporate veil and add an individual person, or persons, or even another corporation as a defendant and seek to hold them responsible for the debt of the main corporation. Plaintiff cannot bring veil piercing claim without claim. The good news for owners is that florida is a conservative state and courts here are reluctant to pierce the corporate veil. This sample complaint for california with alter ego allegations is used when a party wants to request that the court pierce the corporate veil and find that another defendant is the alter ego of the corporate defendant and thus responsible. In their amended complaint, plaintiffs brought claims to pierce the corporate veil, nondischargeability of debt for defalcation, and nondischargeability of debt for fraudulent misrepresentation. To establish an alter ego theory of liability and pierce the corporate veil in arizona, the proponent of the theory must establish 1 unity of control and 2 that observance of corporate form would sanction a fraud or promote injustice.
Piercing the corporate veil is a remedy not a cause of action. Piercing the corporate veil is the judicial act of imposing personal liability on the shareholders andor directors of a corporation by lifting the corporate veil, in contravention to the usual policy that a corporation is a separate legal entity and provides limited liability protection to its shareholders and directors from business debts and liabilities. As this is a diversity case, this issue is governed by pennsylvania law. Brown employed to avoid personal liability, in my opinion. The three justifications for piercing the corporate veil. You file your complaint and send in discovery requests. An equitable result is achieved by disregarding the corporate form and holding morris and bradshaw personally liable for olixos breach of contract as olixo has been drained of assets and, without piercing the corporate veil, cloud nine will be unable to recoup damages and monies owed, including without limitation, by olixo under the. For the district of columbia thompson hine llp, an ohio limited liability partnership.
Notice pleading of veilpiercing preserves complaint. Courts pierce the corporate veil as a tool of statutory application. The first step towards establishing alterego liability is to amend the complaint and name the. Piercing the corporate veil to collect damages plaintiff magazine. Personal liability of corporate officers and directors for.
Alan cooper, for his complaint states and alleges as follows. Somehow you learn that big corporation may not actually have the resources you thought it would. Townline is a good example of the factintensive nature of the veil piercing inquiry. The following is an example of alterego allegations. Ltd v kambolin 2015 ny slip op 30740u april 29, 2015 supreme court, new york county. Plaintiffs can must consider pursuing veil piercing at the outset of litigation by pleading an alter ego theory in the initial complaint. In new york, it is not necessary to plead or prove fraud in order to pierce the corporate veil. In other words, the court will pierce the corporations veil of limited liability.
Piercing the corporate veil is a practice in which a lawyer will prove that the corporation that would otherwise protect its shareowners from personal liability is really a facade or fiction that allows for the piercing of that veil to recover from the true owners. An observation by an early corporate commentator is equally applicable to llcs, llps, and lllps today. The allegations are known as piercing the corporate veil because they are used to pierce the corporate veil and allow a plaintiff to add an individual person, or persons, or even another corporation as a defendant and seek to hold them responsible for the debt of the main corporation. Attorneys or parties in california who would like to view a sample complaint for california that includes alter ego and corporate veil piercing allegations sold by the author can use the link shown below. When must a claim to pierce the corporate veil be brought holding the owner of a corporation personally liable for a corporations debt is known as piercing the corporate veil. This blog post discusses the essential elements of corporate veil piercing in florida and the common factors florida courts utilize. In deciding whether a plaintiff has met the burden to pierce the corporate veil, the court considers whether the plaintiff has presented evidence showing. The five most common ways to pierce the corporate veil and. To solve this issue, a plaintiff can seek to pierce the corporate veil and hold directors, officers, shareholders, or parent companies directly liable for the corporations judgment.
Wacker drive suite 1700 chicago, illinois 60606 312. Leave of the court to amend this complaint to add a claim for punitive damages. We reverse the trial courts grant of summary judgment in favor of appellee, robert w. Piercing the corporate veil, alter ego and successor liability. Piercing the corporate veil in california legaldocspro blog. Count iii piercing the corporate veil defendants claim that count iii must be dismissed because piercing the corporate veil is not a proper independent cause of action. Want to hold a corporate officer personally liable for an alleged. Alter ego liability also known as piercing the corporate veil in california is the topic of this blog post. After the trial court dismissed westmeyers complaint on procedural grounds, she appealed her case to the illinois court of appeals. Piercing the corporate veil is a practice in which a lawyer will prove that the. Veil piercing veil piercing should be rare because limited liability and the separateness of entities and their owners are intended purposes of the llc act and the statutory provisions allowing for llps and lllps. Plaintiff cannot bring veil piercing claim without claim against entity whose veil is being pierced. Christoph, and remand for further proceedings on appellants, seminole boatyard, inc. Piercing the corporate veil in california is the topic of this blog post.
If a court pierces a companys corporate veil, the owners, shareholders, or members of a corporation or llc can be held personally liable for corporate debts. The five most common ways to pierce the corporate veil and impose personal liability for corporate debts. Strategies regarding corporate veil piercing and alter ego. The court noted that while these allegations might not be sufficient to prove that the veil was pierced, they were sufficient for fed. Piercing the corporate veil is a remedy not a cause of. In conducting the research for their paper, which is titled the three justifications for piercing the corporate veil, macey and mitts performed a sophisticated data analysis on more than 9,000 opinions in search of instances where plaintiffs succeeding in uncovering the owners behind a corporate. This legal concept is typically used to impose personal liability on the corporations owner by finding that the corporation. Sample complaint for california with alter ego allegations. Illinois court of appeals permits veil piercing of. Piercing the corporate veil and holding passive corporate business owners personally liable. Sample complaint for california with alter ego allegations free download as word doc. When this happens its called piercing the corporate veil. Business owners would be wise to know these circumstances and avoid them.