ATTORNEY FOR APPELLANTS: ATTORNEYS FOR APPELLEES:
WILLIAM E. WENDLING, JR. STEVE CARTER
Campbell Kyle Proffitt Attorney General of Indiana
DAVID L. STEINER
Deputy Attorney General
COURT OF APPEALS OF INDIANA
COMMUNITY CARE CENTERS, INC., )
NEW HORIZONS DEVELOPMENTAL )
CENTER, MYRON BRADBURN and )
BONITA J. BRADBURN, )
vs. ) No. 18A02-0202-CV-142
JOHN HAMILTON in his capacity as Secretary
of Family and Social Services Administration; )
and KATHLEEN D. GIFFORD in her capacity )
as Director of the Office of Medicaid Policy and )
Planning, Family and Social Services )
APPEAL FROM THE DELAWARE CIRCUIT COURT
The Honorable Richard A. Dailey, Judge
Cause No. 18D01-9511-CP-241
September 5, 2002
OPINION - FOR PUBLICATION
Myron and Bonita Bradburn appeal the trial courts grant of summary judgment, which
dissolved the corporate identity of Community Care Centers, Inc. (CCCI) and rendered them
personally liable for reimbursing funds to the State. Because we find that
the trial court improperly pierced CCCIs corporate veil on summary judgment, we reverse.
Facts and Procedural History
Following changes to the Medicaid reimbursement rules in 1988, which would have
had the effect of reducing the value of CCCIs facilities upon transfer, CCCI
sought an injunction to prevent the implementation of the new rules. These
new transfer provisions were of concern to CCCI because it was being forced
to transfer ownership of some of its facilities due to losses accruing as
a result of the maximum annual rate increase limitation imposed by the 1984
Medicaid reimbursement rules. The injunction enjoining the implementation of the 1988 rules
was granted, thereby allowing CCCI to transfer its facilities without reducing their value.
However, CCCI did not wish to transfer all of its facilities and
decided to seek an injunction to enjoin the State from using the maximum
annual rate increase limitation as the sole determinant in setting Medicaid rates.
This injunction was also granted.
The Indiana Supreme Court reversed both the injunction that enjoined the 1988 rules
from being implemented and the injunction that enjoined the use of the maximum
annual rate increase limiter. Ind. Bd. of Pub. Welfare v. Tioga Pines
Living Ctr., Inc., 622 N.E.2d 935 (Ind. 1993). Two days after our
supreme court handed-down Tioga Pines, the Bradburns executed a capital lease agreement that
transferred the operations of all of the CCCI facilities to Legacy Healthcare, Inc.,
which is owned by their son, Douglas Bradburn.
Based on the Tioga Pines decision, the Family and Social Services Administration (FSSA)
filed an action seeking a refund of Medicaid funds paid to CCCI pursuant
to injunctions that reimbursed CCCI at rates greater than the State would have
been obligated to pay absent the injunctions. The FSSA initiated
its restitution action against both CCCI and its owners, the Bradburns. CCCI
answered the complaint, but the Bradburns filed a motion to dismiss the personal
claims against them. The FSSA then moved for partial summary judgment seeking
entitlement as a matter of law for restitution of the difference between the
Medicaid payments received by CCCI under the erroneously issued injunctions and the payments
it would have been entitled to receive under Indianas then-applicable Medicaid payment regulations,
which the trial court granted. Additionally, the trial court denied the Bradburns
motion to dismiss and directed that the case would proceed on the remaining
issues: (1) the amount of the States damages; and (2) whether CCCIs corporate
shield protected the Bradburns from personal liability for the restitution sought by the
Subsequently, the FSSA filed a motion for partial summary judgment on the issue
of the amount of restitution, which the trial court granted and entered a
final judgment against CCCI in the amount of $6,302,976.02, plus interest and costs.
CCCI appealed the judgment, which we affirmed. Cmty. Care Ctrs., Inc.
v. Sullivan, 701 N.E.2d 1234 (Ind. Ct. App. 1998), trans. denied.
The FSSA filed a third motion for summary judgment on the issue of
whether the Bradburns were personally liable for payment of the restitution judgment.
The trial court granted summary judgment in favor of the FSSA. In
granting summary judgment, the trial court found the following facts to be uncontroverted:
Throughout the existence of [CCCI], incorporated in 1970, Myron Bradburn has owned sixty
(60) percent and his wife Bonita Bradburn has owned the remaining forty (40)
percent of the issued stock.
Bonita Bradburn, corporate secretary-treasurer, works mainly at home. Myron Bradburn, corporate president,
who works an average of twenty (20) hours a week, has no idea
what she does besides consulting with him on the litigation, the bills and
In 1995, [CCCI] received $5.9 million lease revenue, from which $2.8 million was
paid out in mortgage payments.
Testimony indicates that at least in 1994, 1995, and 1996, Myron Bradburn received
an annual salary of $600,000 and Bonita Bradburn received an annual salary of
$300,000. In 1994 and 1995, four of their children Lee, Deb,
Jon and Amy received $10-12,000 each annually for assistance in making decisions
about litigation, bills, and banks.
The annual salaries of Myron Bradburn and Bonita Bradburn were not a reasonably
equivalent value for the modest services they performed.
Myron Bradburn testified on March 7, 1995, that the cash which flowed from
his individual properties and from [CCCIs] properties was jointly used to satisfy debts
incurred by both sets of properties. Wherever the payable came from, the
creditors all looked to Myron Bradburn in the end.
CCCI did not and does not have operating or capital budgets.
Appellants App. p. 29. From these facts, the trial court concluded:
[T]he corporate fiction should be disregarded with regard to [CCCI] and Myron Bradburn
and Bonita Bradburn should not be allowed to evade personal liability for the
acts of their corporation, e.g.
Myron Bradburn and Bonita Bradburn, as sole stockholders of [CCCI] used said corporation
to wrongfully obtain $6,302,976.02 medicaid [sic] funds from Plaintiffs;
Two days following the Indiana Supreme Courts vacation of the injunction which had
allowed [CCCI] to obtain the overpayment of medicaid [sic] funds, [CCCI] entered into
a capital lease with Legacy Healthcare, Inc., which is owned by their son
Douglas, a vice-president of [CCCI];
In 1994, 1995, and 1996, alone and without looking at other years, through
excessive salaries, Myron Bradburn and Bonita Bradburn transferred to themselves $2.7 million from
[CCCI] at a time when they knew that the Plaintiffs would be looking
to it for restitution;
Myron Bradburn has consistently disregarded the corporate form, commingling personal and corporate funds
in payment of corporate and personal obligations.
The glaring injustice which compels the equitable granting of Plaintiffs motion is that
the Defendants Myron Bradburn and Bonita Bradburn, through the manipulation of the corporate
form, were the wrongful recipients of $6,302,976.02 in taxpayer-derived Medicaid funds. This
is enhanced by the absence herein of corporate bugetary [sic] records, payment by
the corporation of individual obligations and vice versa, commingling assets and affairs, together
with the transfer of assets by salaries which were on their face fundamentally,
unreasonably disparate to any value received.
Appellants App. p. 30 (citations omitted). This appeal ensued.
Discussion and Decision
When reviewing a grant of a motion for summary judgment we stand in
the shoes of the trial court, and we are not limited to reviewing
the trial courts reasons for granting summary judgment. Strodtman v. Integrity Builders,
Inc., 668 N.E.2d 279, 281 (Ind. Ct. App. 1996), trans. denied. We
resolve any doubt about a fact or any inference to be drawn from
it in favor of the nonmoving party. Id. We will affirm
the trial courts decision only if no genuine issues of material facts exist
and the movant is entitled to judgment as a matter of law.
Id. See also Ind. Trial Rule 56(C). If we have any
doubts concerning the existence of a genuine issue of material fact, we must
resolve those doubts in favor of the nonmoving party and reverse the entry
of summary judgment. Soames v. Young Oil Co., 732 N.E.2d 1236, 1238
(Ind. Ct. App. 2000).
A fact is material for summary judgment purposes if its resolution is decisive
of either the action or a relevant secondary issue. Id. A
factual issue is genuine if those matters properly considered under Indiana Trial Rule
56 evidence a factual dispute requiring the trier of fact to resolve the
opposing parties different versions. Id. Finally, we note that summary judgment
should not be granted when it is necessary to weigh the evidence.
Bochnowski v. Peoples Fed. Sav. & Loan Assn, 571 N.E.2d 282, 285 (Ind.
Here, the trial court entered specific findings of fact and conclusions thereon, which
would normally trigger the two-tiered appellate standard of review contained in Indiana Trial
Rule 52. Ferrell v. Dunescape Beach Club Condos. Phase I, Inc., 751
N.E.2d 702, 709 (Ind. Ct. App. 2001) (citing Campbell v. Spade, 617
N.E.2d 580, 582 (Ind. Ct. App. 1993)). While specific findings and conclusions
entered by the trial court when ruling on a motion for summary judgment
afford the appellant an opportunity to address the merits of the trial courts
rationale and aid our review by providing us with a statement of reasons
for the trial courts action, they have no other effect. Ferrell, 751
N.E.2d at 709. Thus, rather than relying upon the trial courts findings
and conclusions, we must base our decision upon the materials properly presented to
the trial court under Indiana Trial Rule 56(C). Id.
As a general rule, Indiana courts are reluctant to disregard corporate identity and
do so only to protect third parties from fraud or injustice when transacting
business with a corporate entity. Lambert v. Farmers Bank, 519 N.E.2d 745,
747 (Ind. Ct. App. 1988). When a court exercises its equitable power
to pierce a corporate veil, it engages in a highly fact-sensitive inquiry.
Smith v. McLeod Distrib. Inc., 744 N.E.2d 459, 462 (Ind. Ct. App. 2000).
A party seeking to pierce the corporate veil bears the burden of
establishing that the corporation was so ignored, controlled or manipulated that it was
merely the instrumentality of another, and that the misuse of the corporate form
would constitute a fraud or promote injustice. Gurnik v. Lee, 587 N.E.2d 706,
710 (Ind. Ct. App. 1992). In deciding whether the party seeking to
pierce the corporate veil has met its burden, Indiana courts consider whether the
party has presented evidence showing: (1) undercapitalization; (2) absence of corporate records; (3)
fraudulent representation by corporation shareholders or directors; (4) use of the corporation to
promote fraud, injustice, or illegal activities; (5) payment by the corporation of individual
obligations; (6) commingling of assets and affairs; (7) failure to observe required corporate
formalities; or (8) other shareholder acts or conduct ignoring, controlling, or manipulating the
corporate form. Smith, 744 N.E.2d at 463.
The FSSA fails to direct our attention to any cases where Indiana courts
have pierced the corporate veil on summary judgment, nor were we able to
find any. This is not surprising in light of the fact that
it is recognized that the determination of whether there are sufficient grounds for
piercing the corporate veil ordinarily should not be disposed of by summary judgment,
in view of the complex economic questions often involved, especially if fraud is
alleged. 1 William Meade Fletcher, Fletcher Cyclopedia of the Law of Private
Corporations § 41.95 at 700 (Perm. ed. 1999). See also Mustang Tractor
& Equip. Co. v. Cornett, 747 S.W.2d 33, 36 (Tex. App. 1988) (finding
no case where the corporate sham theory had been established so as to
support a summary judgment); Laya v. Erin Homes, 352 S.E.2d 93, 102 (W.
Va. 1986) (opining It is also clear that the propriety of piercing the
corporate veil should rarely be determined upon a motion for summary judgment.
Instead, the propriety of piercing the corporate veil usually involves numerous questions of
fact for the trier of the facts to determine upon all the evidence.).
In essence, the FSSA is accusing the Bradburns of having used their corporation
to commit a fraud upon its agency. This is precisely the type
of situation that Professor Fletcher warns is ill suited for disposition on summary
judgment. Nonetheless, we will examine the evidence presented by the parties as
to each veil-piercing factor and the inferences to be drawn therefrom to determine
whether the trial court properly pierced the corporate veil on summary judgment.
Inadequate capitalization means capitalization very small in relation to the nature of the
business of the corporation and the risks attendant to such businesses. Fletcher,
supra, § 41.33 at 652. The adequacy of capital is to be
measured as of the time of a corporations formation. Id. A
corporation that was adequately capitalized when formed, but which subsequently suffers financial reverses
is not undercapitalized. Id. On the other hand, if an adequately
capitalized corporation later substantially expands the size or nature of the business with
an attendant substantial increase in business hazards, the corporation might be deemed inadequately
capitalized unless there is an infusion of additional risk capital by shareholders.
Id. at 652-53. Consequently, while a trial courts examination of the adequacy
of capitalization may inquire beyond the capitalization at the inception of the corporation,
such inquiry is limited to those circumstances where the corporation distinctly changes the
nature or magnitude of its business. Id. at 653.
The FSSA claims that CCCI is undercapitalized. Specifically, the FSSA points to
the deposition testimony of Myron Bradburn in which he explained that CCCI has
not paid back the $550,000 loan from Legacy because it has not had
the funds. This is the only evidence the FSSA proffers of CCCIs
alleged undercapitalization. However, the record discloses that when CCCI was formed in
1970, the stockholders contributed a facility to CCCI that was sold in 1988
for a net gain of $2,818,387. Additionally, the stockholders contributed $1,000,000 of
paid-in capital in 1989. The FSSA does not contend, nor provide any
evidence to suggest, that CCCI was undercapitalized at its inception or that CCCI
changed the nature or magnitude of its business so as to require an
additional infusion of capital. Consequently, we conclude that a factual dispute as
to whether CCCI was undercapitalized exists.
(2) Absence of Corporate Records
Under the Indiana Business Corporation Law (IBCL) a corporation must keep as permanent
records minutes of all meetings of its shareholders and board of directors, a
record of all actions taken by the shareholders or board of directors without
a meeting, and a record of all actions taken by a committee of
the board of directors in place of the board of directors on behalf
of the corporation. Ind. Code § 23-1-52-1(a); see also 19 Paul J.
Galanti, Indiana Practice Business Organizations § 33.2 at 345-46 (1991) (highlighting the
record keeping requirements of Indiana Code § 23-1-52-1). A corporation must also
maintain appropriate accounting records. I.C. § 23-1-52-1(b). Additionally, a corporation or
its agent must maintain a record of its shareholders, in a form that
permits preparation of a list of the names and addresses of all shareholders,
in alphabetical order by class of shares showing the number and class of
shares held by each. I.C. § 23-1-52-1(c). Finally, a corporation must
keep a copy of the following records at its principal office: its articles
or restated articles of incorporation and all amendments to them currently in effect;
its bylaws or restated bylaws and all amendments to them currently in effect;
resolutions adopted by its board of directors with respect to one or more
classes or series of shares and fixing their relative rights, preferences, and limitations,
if shares issued pursuant to those resolutions are outstanding; all written communications to
shareholders generally within the past three years, including the financial statements furnished for
the past three years under Indiana Code § 23-1-53-1; a list of the
names and business addresses of its current directors and officers; and its most
recent annual report delivered to the secretary of state under Indiana Code §
23-1-53-3. I.C. § 23-1-52-1(e).
The FSSA contends that CCCIs failure to establish and maintain critical corporate
records demonstrates further indicia of corporate guise. In particular, the FSSA notes
that CCCI did not maintain operating or capital budgets even though outside accountants
warned that failure to do so would make it difficult to know whether
management statements about CCCIs financial condition are accurate. Although it may not
be sound business practice to operate without operating or capital budgets, the FSSA
does not make a showing that budgets are required corporate records under the
IBCL. While the IBCL generally requires that a corporation maintain appropriate accounting
records, there is no indication of what constitutes appropriate accounting records.
The Bradburns assert that CCCI has maintained all required records under the
IBCL. In particular, the Bradburns contest that CCCI violated the record keeping
requirement in light of the fact that CCCI has maintained accounting records in
which it records, among other things, payments made by CCCI to its owners
and payments by its owners to CCCI. Thus, we find there is
a factual dispute regarding whether the Bradburns maintained appropriate accounting records.
(3) Fraudulent Representation by Corporation Shareholders or Directors
The FSSA does not allege any fraudulent representations by CCCI shareholders or directors.
Therefore, we do not consider this veil-piercing factor.
(4) Use of the Corporation to Promote Fraud, Injustice or Illegal Activities
The FSSA claims that the Bradburns used the corporation to wrongfully obtain funds
from the State. More specifically, the FSSA contends,
[T]he glaring injustice which warranted imposing personal liability on the Bradburns was the
fact that [CCCI] (and the Bradburns as sole owners) were the windfall recipients
of approximately $6.3 million of taxpayer-derived Medicaid funds and the fact that the
Bradburns took steps that removed substantial funds and assets from [CCCI] so that
[CCCI] was not in a financial position to repay the public funds owed
to the FSSA/State resulting from the wrongful injunctions. Summary Judgment, App. 28-30
Appellees Br. p. 11. The FSSA accuses the Bradburns of overcompensating themselves
in an effort to purposefully siphon funds from CCCI. While it is
undisputed that Myron Bradburn collected a salary of $600,000 per year and Bonita
Bradburn collected a salary of $300,000 per year between 1994 and 1996, the
record fails to disclose that these sums were unreasonable within the long-term care
industry given the magnitude of CCCIs operations. Without information about what the
norm is for the industry, conflicting inferences could be drawn as to whether
these undisputed salaries were excessive. Moreover, the only evidence we have of
the Bradburns salaries is for the years 1994-1996. We do not know
what their salaries were prior to the injunctions being overturned in October of
1993. Therefore, we are unable to determine from the record before us
whether the Bradburns increased their salaries in an effort to siphon funds from
CCCI after the injunctions were overturned on appeal. (5) Payment by the Corporation of Individual Obligations
Further, we note that the Bradburns should not be penalized for CCCIs resort
to the judicial system in an effort to enjoin what it believed to
be the imposition of unfair rate limiters and transfer provisions which would have
reduced the value of the facilities upon transfer without evidence that the motivation
in seeking the injunctions was to fleece the State. The trial courts
order on summary judgment suggests that CCCI sought the injunctions as a means
of cheating the State. However, CCCI contends that the injunctions were sought
in order to prevent CCCI from having to sell off its facilities and
to help the corporation to remain profitable.
Finally, we take issue with the trial courts conclusion that the Bradburns, through
the manipulation of the corporate form, were the wrongful recipients of $6,302,976.02 in
taxpayer-derived Medicaid funds. Appellants App. p. 30. While admittedly, if true,
this would support a decision to pierce the corporate veil, the record is
insufficient to show that the Bradburns personally received over six million dollars in
Medicaid funds. Moreover, the Bradburns disputed this fact by attesting that the
money was used to provide patient care pursuant to the provider agreements under
which the payments were received. Accordingly, we find that there are conflicting
inferences here as to whether the Bradburns intended to perpetrate a fraud upon
The FSSA also asserts that CCCI paid some of the Bradburns individual obligations.
In particular, the FSSA notes the following examples of the Bradburns using
corporate assets for their own private purposes:
[CCCI] supplies Myron Bradburn with a car for personal use even though he
does not go into the office on a daily basis[;] . . .
Trucks and vehicles which are assets of [CCCI], are used by Myron to
do lawn work at his residence[;] . . . .
Myron Bradburn carries a credit card used for personal expenses that is billed
to [CCCI;] . . . .
. . . .
[CCCI] has also extended millions of dollars in loans to Myron and Bonita
Bradburn[;] . . . .
Despite the fact that there is very little work to be done for
[CCCI], Myron Bradburn keeps four of his children on the payroll and pays
each a salary of between $10,000 to $12,000 per year[;] . . .
None of the children have any clear responsibilities or obligations to the corporation;
. . . and
[CCCI] also provides extensive nursing care to a fifth Bradburn child who was
disabled in an automobile accident. . . .
Appellants App. p. 39-40 (citations omitted).
In response to the FSSAs allegations that CCCI paid the Bradburns personal obligations,
the Bradburns presented a verified affidavit of a certified public accountant (CPA).
The CPA relied on CCCIs financial statements and workpapers furnished by CCCIs outside
auditors in arriving at his conclusions as to the propriety of the Bradburns
financial transactions. The CPA concluded:
It is typical in closely owned businesses of this type for a company,
as a matter of convenience, to provide relatively small miscellaneous services for its
stockholders and charge the stockholders for those services. . . . In
this Corporations case, such miscellaneous services provided to stockholder are recorded and charged
to the stockholders.
Appellants App. p. 264-65, 270. Thus, while the Bradburns do not dispute
that some individual obligations were paid by CCCI, they do offer evidence that
the services and money provided to them were recorded and charged to them
as stockholders of CCCI. In essence, the Bradburns reimbursed the corporation.
Furthermore, the CPA concluded that [f]or a closely held enterprise of this size,
$765,106 over a six year period (about $127,500 per year) is a relatively
modest net capital flow between the corporation and stockholder which would not be
considered unreasonable or excessive. Appellants App. p. 268. The CPA also
It is also typical for all types of family-owned or controlled businesses (both
large and small) to employ family members in the operation . . .
. The fact that family members work in a business operation controlled
by that family does not constitute a commingling of assets or business affairs
between the family stockholders and the company.
Appellants App. p. 267. While the FSSA urges us to discount this
information as self-serving, it fails to conclusively establish that such practices are atypical
of family-owned or controlled businesses. Because the Bradburns claim that they effectively
reimbursed CCCI for any payment of their individual obligations and that many actions
that the FSSA cites as justification for piercing the CCCIs corporate veil are
typical of family run corporations, conflicting inferences exist regarding whether the Bradburns actions
support a decision to pierce the corporate veil.
(6) Commingling of Assets and Affairs
Additionally, we note that the record before us is insufficient to allow us
to make a determination concerning the propriety of the loans between CCCI and
the Bradburns. Our review of the record reveals that a number of
loans were extended by CCCI to the Bradburns. There is evidence in
the record that the Bradburns extended loans to the corporation as well.
The legitimacy of these loans is difficult to discern from the record before
us. Moreover, we are unable to determine whether the loans have been
paid back or are still outstanding. Thus, conflicting inferences can be drawn
as to the propriety of these loans.
In order to be recognized as an entity separate from its shareholders, a
corporation should be operated as a distinct and separate business and financial unit,
with its own books, records, and bank accounts. Fletcher, supra, § 41.50
at 677. Evidence that shareholders used corporate funds for personal purposes, mixed
corporate and personal accounts, or commingled assets so that the ownership interests were
indistinguishable will be weighed, along with other factors, when a disregard of corporate
separateness is urged. Id. at 677-78.
The FSSA argues that the Bradburns commingled the affairs of CCCI facilities with
those of the facilities they operated as sole proprietorships. The FSSA directs
our attention to the deposition testimony of Myron Bradburn in which he stated
wherever [a payable] comes from, they all look to me at the end.
Appellants App. p. 40. The FSSA interprets this to mean, Entities
doing business with either [CCCI] or with Myron Bradburns individually-owned facilities may look
to a common pool of money for payment of their bills. Appellants
App. p. 40. While Myron Bradburn made his characterization in the midst
of a deposition, the CPA, after reviewing CCCIs accounting records, attested that CCCI
and the Bradburns do not share any financial accounts or hold any assets
in common. We find that a factual dispute exists concerning whether commingling
sufficient to justify piercing the corporate veil occurred.
(7) Failure to Observe Required Corporate Formalities
In order to avoid the potential for a court to pierce the
corporate veil, a corporation must observe corporate formalities. Fletcher, supra, § 41.31
at 635. Failure to observe corporate formalities includes such activities as commencement
of business without the issuance of shares, lack of shareholders or directors meetings,
lack of signing of consents, and the making of decisions by shareholders as
if they were partners. Id. at 635-36.
In support of its contention that CCCI failed to observe required corporate formalities,
the FSSA points to the casual manner in which the capital lease agreement
for the CCCI facilities was entered into by Myron and Douglas Bradburn.
The FSSA suggests that this transaction should have been accomplished by a shareholders
or directors meeting. Myron Bradburn admits that the initial lease deal was
the product of a back of the envelope negotiation process. Appellants App.
p. 107. However, the Bradburns claim that CCCI adhered to corporate formalities
such as issuing shares, electing a board of directors, and holding shareholders and
directors meetings. The FSSA does not contest this claim. Consequently, we
are not convinced that the informal transfer of CCCIs operations alone is enough
to support a decision to pierce the CCCIs corporate veil. Thus, we
find that conflicting inferences exist as to whether corporate formalities were ignored so
as to allow CCCIs corporate veil to be pierced.
(8) Other Shareholder Acts or Conduct Ignoring, Controlling, or Manipulating the Corporate Form
The FSSA does not proffer any evidence of other shareholder acts or conduct
ignoring, controlling, or manipulating the corporate form. Thus, we do not consider
this veil-piercing factor.
While it may be that CCCIs corporate veil should be pierced, it should
not have been pierced on summary judgment. Piercing the corporate veil should
only be accomplished on summary judgment in extraordinary circumstances such as when it
is patently obvious that the sole purpose for a corporations existence is to
perpetrate a fraud or injustice. Because the record before us is inconclusive
as to whether CCCI was merely a sham corporation in existence to allow
the Bradburns to exploit third parties, we conclude that the trial court erred
by piercing CCCIs corporate veil on summary judgment. Consequently, we remand for
further proceedings to determine whether CCCIs corporate veil should be pierced and liability
imposed upon the Bradburns.
Judgment reversed and remanded for further proceedings.
RILEY, J., and MATTINGLY-MAY, J., concur.
We note that some of these examples seem to fit more
naturally in a discussion of commingling of assets. However, because the FSSA
included them in its discussion of payment by the corporation of individual obligations,
we address them in this section.