Taylor Steel, Inc. v. Lana C. Keeton

417 F.3d 598, 2005 U.S. App. LEXIS 16419, 2005 WL 1875521
CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 8, 2005
Docket02-4167
StatusPublished
Cited by52 cases

This text of 417 F.3d 598 (Taylor Steel, Inc. v. Lana C. Keeton) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Taylor Steel, Inc. v. Lana C. Keeton, 417 F.3d 598, 2005 U.S. App. LEXIS 16419, 2005 WL 1875521 (6th Cir. 2005).

Opinions

BOGGS, C.J., delivered the opinion of the court, in which CLELAND, D.J., joined.

GILMAN, J. (pp. 610-612), delivered a separate dissenting opinion.

OPINION

BOGGS, Chief Judge.

In a bench trial, Defendant-Appellant Lana Keeton and her company, Great Events, Inc. d/b/a Keeton Corporation,1 were found jointly and severally liable to Plaintiff-Appellant Taylor Steel for $88,345.78, as a result of Keeton’s failure to pay for five trackloads of steel that she ordered from Taylor Steel on behalf of a third party. To hold Keeton liable in her personal capacity, the court had to pierce the corporate veil. Keeton appeals pro se, contending that the district court’s holding was against the weight of the evidence, that Taylor Steel owed her money because it sold her defective steel, and that the district court improperly pierced the corporate veil to hold her personally liable. The clerk of this court denied Keeton’s pro se appeal on behalf of her company, so Keeton, in her individual capacity, is the only appellant. We affirm the district court.

I

Keeton, through her company Great Events, Inc. d/b/a Keeton Corp. (Keeton Corp.), of which she is the sole shareholder, officer, director, and employee, acted as a steel broker and outside steel salesperson. The transaction at issue in the suit concerned a large purchase of steel that Keeton Corp. made on behalf of its client, Mountain Metals, from Taylor Steel. Kee-ton Corp. placed the Mountain Metals order for 500 tons of steel in August 2000. [603]*603As per Taylor Steel’s standard practice with Keeton Corp., the company was sold steel on a limited credit line, requiring either cash in advance or payment within ten days of invoicing. Taylor Steel had maintained these terms with Keeton Corp. since first doing business with the company in 1997, due to its knowledge that Kee-ton Corp. had limited credit and generally did business on a cash flow basis.

Keeton Corp. paid in a timely fashion for the first ten truckloads of steel shipped to Mountain Metals. This suit concerns the last five truckloads, shipped during January and February 2001, amounting to $94,860.98 worth of steel. In order to pay for these shipments, Keeton obtained a letter of credit from Mountain Metal made out to Keeton Corp., not to Taylor Steel. The five truckloads were shipped, Mountain Metals paid Keeton Corp. on the letter of credit, but Keeton Corp. never paid Taylor Steel.

The parties have stipulated to all of these facts. The parties also stipulate that Keeton Corp. returned three coils of steel as unacceptable and that Taylor Steel credited Keeton Corp. the full amount of these coils. The stipulated total amount owed on the five truckloads of steel, then, is $88,345.78. Taylor Steel sued for an action upon an account and for fraud and sought to pierce the corporate veil.

The Defendants counterclaimed for breach of commissions contract, breach of contract, and tortious interference with contracts and business relationships. Asserting-apparently for the first time-in their counterclaim that the steel shipped to Mountain Metals was not prime steel and that it was not properly warranted, Defendants calculated that they owed Taylor Steel only $14,847.16. In addition, Defendants sought damages in the amount of $199,352 for (1) commissions that Keeton claimed Taylor Steel owed Keeton for sales made to D.T. Sari, a company Keeton had brought to Taylor Steel; and (2) for Taylor Steel’s tortious interference with Keeton’s business relationship with Mountain Metal in selling directly to that company. Keeton claims that she refused to pay Taylor Steel and ceased all communications with that company in March 2001 due to these complaints. Taylor Steel offered proof that it continued to pay Keeton her commission and refrained from dealing directly with Mountain Metals as long as Keeton was in contact with Taylor Steel.

After Taylor Steel initiated the present suit, Keeton closed the Keeton Corp. bank account, put Great Events, Inc. and Kee-ton Corp. out of business, and formed a new company, Lana Keeton, LLC, to continue her steel brokering business.

The district court found Keeton Corp. liable for the full $88,345.78 and pierced the corporate veil to extend liability to Keeton herself. The court denied Taylor Steel’s complaint for fraud, finding that Keeton Corp. did not contract with Taylor Steel with the intent to defraud it, and the court denied all of the Defendants’ counterclaims. This appeal, ostensibly on behalf of Keeton Corp. and Lana Keeton individually, followed.

Because neither a corporate officer nor a shareholder may appear on behalf of the corporation, the clerk of the court properly denied Keeton the right to represent her company. Doherty v. American Motors Corp., 728 F.2d 334, 340 (6th Cir.1984); Canderm Pharmacal, Ltd. v. Elder Pharmaceuticals, Inc., 862 F.2d 597, 602-03 (6th Cir.1988); see also Rowland v. California Men’s Colony, 506 U.S. 194, 201-02, 113 S.Ct. 716, 121 L.Ed.2d 656 (1993); In re K.M. A., Inc., 652 F.2d 398, 399 (5th Cir.1981). Therefore, we consider only the question of Keeton’s personal liability for the corporate liability.

[604]*604II

We review the factual findings of the district judge in a bench trial for clear error, and the legal findings de novo. Pressman v. Franklin Nat’l Bank, 384 F.3d 182, 185 (6th Cir.2004). Great deference is demanded when the factual findings required the judge to make credibility determinations. Anderson v. City of Bessemer City, 470 U.S. 564, 575, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985). This being a diversity case, the district court looked to the choice of law provisions of the forum state (Ohio), properly leading it to apply Ohio law.

Under Ohio law, “an action on an account is appropriate where the parties have conducted a series of transactions, for which a balance remains to be paid.” AMF, Inc. v. Mravec, 2 Ohio App.3d 29, 440 N.E.2d 600, 601 (Ohio App. 8 Dist. 1981), paragraph 1 of the syllabus. To succeed in an action on an account, the plaintiff must prove both all the elements of the contract and that the contract is one that involves transactions usually the subject of a book account. Am. Sec. Serv., Inc. v. Baumann, 32 Ohio App.2d 237, 289 N.E.2d 373, 378 (Ohio App. 10 Dist.1972). The parties produced invoices demonstrating the transactions in question. They further stipulated to the contract to pay for the five truckloads of steel and the failure to make that payment.

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417 F.3d 598, 2005 U.S. App. LEXIS 16419, 2005 WL 1875521, Counsel Stack Legal Research, https://law.counselstack.com/opinion/taylor-steel-inc-v-lana-c-keeton-ca6-2005.