Sea-Land Services, Inc. v. Pepper Source: Difference between revisions

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{{Infobox Case Brief
{{Infobox Case Brief
| court                 =  
|court=
| citation             =
|citation=
| date                  =  
|subject=Business Associations
| subject               = Business Associations
|appealed_from=
| appealed_from         =
|case_treatment=No
| decision_by          =
|overturned=
| joined_by            =  
|partially_overturned=
| concurrence          =
|reaffirmed=
| dissent              =
|questioned=
| concur_dissent        =  
|criticized=
| overturned           =  
|distinguished=
| partially_overturned =  
|cited=
| reaffirmed           =  
|followed=
| questioned           =  
|related=
| criticized           =  
|facts=Pepper source (PS) failed to pay SLS for shipping services. SLS filed federal diversity suit. D Ct. filed default judgment for $86K. But PS had already been dissolved. SLS filed against Marchses, owner of PS.
| distinguished         =  
|procedural_history=Dist. Ct. granted SLS SJ b/c 2 requirements for veil piercing were met: 1) such unity of interest and ownership that sep. personalities of corp and individual no longer exist. (See Below in comments) 2) circumstances must be such that adherence to the fiction of separate corp. existence would sanction a fraud or promote injustice.
| cited                 =  
|issues=
| followed             =  
|arguments=SLS wants to pierce the veil to the owner and then "reverse pierce" to his other corps.
| related               =  
|holding=There was no evidence of actual "wrongs" to prove injustice.
}}
|judgment=Reversed and remanded.
'''Facts''': Pepper source (PS) failed to pay SLS for shipping services. SLS filed federal diversity suit. D Ct. filed default judgment for $86K. But PS had already been dissolved. SLS filed against Marchses, owner of PS.
|reasons=
 
|rule=
'''Procedural History''': Dist. Ct. granted SLS SJ b/c 2 requirements for veil piercing were met: 1) such unity of interest and ownership that sep. personalities of corp and individual no longer exist. (See Below in comments) 2) circumstances must be such that adherence to the fiction of separate corp. existence would sanction a fraud or promote injustice.
|comments=Factors to determine whether a corp is so controlled by another:
 
'''Arguments''': SLS wants to pierce the veil to the owner and then "reverse pierce" to his other corps.  
 
'''Holding''': There was no evidence of actual "wrongs" to prove injustice.
 
'''Judgment''': Reversed and remanded.
 
'''Comments''': Factors to determine whether a corp is so controlled by another:
#failure to maintain adequate records to comply w/ corp. formalities
#failure to maintain adequate records to comply w/ corp. formalities
#commingling of funds and/or assets
#commingling of funds and/or assets
#undercapitalization
#undercapitalization
#one corp. treating assets of another corp. as its own.
#one corp. treating assets of another corp. as its own.
|case_text_links=
|Court_opinion_parts=
}}

Revision as of 01:12, September 17, 2020

Sea-Land Services, Inc. v. Pepper Source
Court
Citation
Date decided

Facts

Pepper source (PS) failed to pay SLS for shipping services. SLS filed federal diversity suit. D Ct. filed default judgment for $86K. But PS had already been dissolved. SLS filed against Marchses, owner of PS.

Procedural History

Dist. Ct. granted SLS SJ b/c 2 requirements for veil piercing were met: 1) such unity of interest and ownership that sep. personalities of corp and individual no longer exist. (See Below in comments) 2) circumstances must be such that adherence to the fiction of separate corp. existence would sanction a fraud or promote injustice.

Arguments

SLS wants to pierce the veil to the owner and then "reverse pierce" to his other corps.

Holding

There was no evidence of actual "wrongs" to prove injustice.

Judgment

Reversed and remanded.

Comments

Factors to determine whether a corp is so controlled by another:

  1. failure to maintain adequate records to comply w/ corp. formalities
  2. commingling of funds and/or assets
  3. undercapitalization
  4. one corp. treating assets of another corp. as its own.

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