Sea-Land Services, Inc. v. Pepper Source
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Sea-Land Services, Inc. v. Pepper Source | |
Court | |
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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:
- failure to maintain adequate records to comply w/ corp. formalities
- commingling of funds and/or assets
- undercapitalization
- one corp. treating assets of another corp. as its own.