Thomas Berkeley Consulting Engineer, Inc. v. Zerman

911 S.W.2d 692, 1995 Mo. App. LEXIS 2045, 1995 WL 731598
CourtMissouri Court of Appeals
DecidedDecember 12, 1995
Docket66831
StatusPublished
Cited by17 cases

This text of 911 S.W.2d 692 (Thomas Berkeley Consulting Engineer, Inc. v. Zerman) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thomas Berkeley Consulting Engineer, Inc. v. Zerman, 911 S.W.2d 692, 1995 Mo. App. LEXIS 2045, 1995 WL 731598 (Mo. Ct. App. 1995).

Opinion

RONNIE L. WHITE, Special Judge.

Thomas Berkeley Consulting Engineer, Inc. (plaintiff), a Missouri corporation, sued attorney Allan H. Zerman (defendant) for wrongful garnishment. The garnishment was filed by defendant in a divorce action between the president of the corporation and his wife. Following the divorce action, plaintiff filed a civil action against defendant. The trial court granted summary judgment in favor of defendant and plaintiff appeals. We reverse and remand.

For purposes of the appeal, the facts are as follows. Thomas Berkeley (Berkeley) and Linda Berkeley (wife) were parties to a dissolution of marriage proceeding. Berkeley is the president of plaintiff. Wife was represented by defendant in the dissolution proceeding.

The trial court entered an Order Pendente Lite (PDL) for temporary support of wife. Berkeley failed to meet his financial obligations under the PDL order and defendant filed three garnishments against Berkeley and/or plaintiff. Plaintiff was never made a party to the dissolution action. At no time *695 was plaintiff indebted to wife or in possession of marital property.

Berkeley and wife ultimately reached a settlement agreement in the dissolution of their marriage. During the settlement proceeding, Berkeley orally released his claims against wife and defendant. Plaintiff and defendant dispute whether Berkeley released plaintiff's claims against wife and defendant. Berkeley did not execute a written release.

Plaintiff subsequently brought this wrongful garnishment action against defendant alleging it lost revenues, employees, and clients as a result of the garnishments on its corporate assets. In his answer, defendant pled plaintiff was estopped from pursuing the wrongful garnishment claim because of Berkeley’s oral release during the dissolution proceeding. On May 25, 1993, defendant moved for summary judgment. This motion was denied. An amended motion was filed on June 14, 1994. This motion was identical to the initial motion except defendant added as reference a single case involving the issue of collateral estoppel. The court took judicial notice of the file in the wrongful garnishment action, the file in the dissolution action, and each of three garnishments filed by defendant against Berkeley and plaintiff. The court then granted defendant’s motion for summary judgment holding no genuine issue of material fact existed regarding whether Berkeley was the alter ego of plaintiff. The court further found to ignore the relationship between Berkeley and plaintiff would result in an injustice and the garnishments were proper. This appeal followed.

Plaintiff raised no challenge to the sufficiency of the motion in the court below. On appeal, plaintiff asserts the motion does not comply with the particularity requirements of Rule 74.04(c)(1) and because of such failure the decision of the trial court should be reversed. We agree the motion is not in technical compliance with the Rule and such failure would justify the trial court or this court’s denial of summary judgment. However, where the basis for the judgment is obvious to counsel, to the trial court and to the appellate court, this court is authorized to review the case on the merits. Mathes v. Nolan, 904 S.W.2d 353, 355 (Mo.App.E.D. 1995). This is particularly true in the present situation where plaintiff did not object to the motion’s lack of particularity in the trial court. Id. Accordingly, as a matter of discretion we will review the merits.

Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Rule 74.04(c). On appeal of a summary judgment, we review the record in the light most favorable to the party against whom judgment was entered. ITT Commercial Finance Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Our review is essentially de novo. Id.

On appeal, plaintiff argues the trial court erred in granting summary judgment to defendant because a genuine issue of material fact existed as to whether Berkeley was the alter ego of plaintiff and there was no factual or legal basis upon which the trial court could pierce the corporate veil. Plaintiff also contends genuine issues of material fact exist as to whether defendant wrongfully garnished the assets of plaintiff. Finally, plaintiff asserts the elements necessary to apply the doctrine of collateral estoppel do not exist and, therefore, this affirmative defense is not applicable.

Ordinarily, a corporation is regarded as a wholly and separate legal entity, distinct from the members who compose it. Krajcovic v. Krajcovic, 693 S.W.2d 884, 886 (Mo.App.E.D.1985). The mere fact of similar ownership and control does not in and of itself authorize piercing the corporate veil. S.R. v. S.M.R., 709 S.W.2d 910, 914 (Mo.App.E.D.1986). To disregard the existence of a corporate entity, the control which the proponent must show is “complete domination, not only of the finances, but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own.... ” Dave Kolb Grading, Inc. v. Lieberman Corporation, 837 S.W.2d 924, 936 (Mo.App.E.D.1992). The test for piercing the corporate veil is two pronged: first, the corporation must be controlled and influenced by persons or by another corporation; second, the evidence must establish the corporate cloak was used as a subterfuge to defeat public convenience, to *696 justify a wrong, or to perpetuate a fraud. Id. The inquiries we make here are does a genuine issue of material fact exist regarding whether plaintiff was controlled and influenced by Berkeley or whether plaintiff was manipulated through its interrelationship with Berkeley to cause illegality, fraud, or injustice.

In defendant’s motion for summary judgment, he alleges plaintiff is a Missouri corporation wholly owned by Berkeley, defendant obtained a money judgment against Berkeley, and Berkeley failed to satisfy this debt. Defendant also states in his motion garnishments were issued against plaintiff and these garnishments were “filed in reliance upon the Missouri law that when a corporation is indistinct from the person controlling it, the corporate form may be disregarded if its retention would result in an injustice.”

Defendant fails to present in his motion, however, any facts or other evidence establishing plaintiff is as a matter of law indistinct from Berkeley. Nor does defendant establish as a matter of law Berkeley’s “complete domination, not only of the finances, but of policy and business practice_” Id. We note Berkeley is not the only employee of plaintiff. Additionally, defendant’s reliance on the fact plaintiff is a corporation wholly owned by Berkeley is misplaced.

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Bluebook (online)
911 S.W.2d 692, 1995 Mo. App. LEXIS 2045, 1995 WL 731598, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thomas-berkeley-consulting-engineer-inc-v-zerman-moctapp-1995.