Opinion
No. COA11–1527.
2012-05-15
John DODD, Plaintiff, v. MANHEIM AUCTIONS, INC., Manheim Corporate Services, Inc., and Manheim Automotive Financial Services, Inc., Defendants.
McGeachy, Hudson & Zuravel, by Donald C. Hudson, for plaintiff-appellant. Cranfill Sumner & Hartzog LLP, by Jaye E. Bingham–Hinch, for defendant-appellees.
Appeal by plaintiff from order entered 6 September 2011 by Judge Paul Gessner in Superior Court, Johnston County. Heard in the Court of Appeals 25 April 2012. McGeachy, Hudson & Zuravel, by Donald C. Hudson, for plaintiff-appellant. Cranfill Sumner & Hartzog LLP, by Jaye E. Bingham–Hinch, for defendant-appellees.
STROUD, Judge.
Plaintiff appeals an order allowing summary judgment in favor of defendants. For the following reasons, we affirm.
I. Background
On 31 March 2010, plaintiff filed a complaint against defendants Manheim Auctions Inc., Manheim Corporate Services, Inc., Manheim Automotive Financial Services, Inc. (collectively “the Manheim defendants”), and North Carolina Services Corp. (“NCSC”) for negligence. Plaintiff alleged that while attending an automobile auction a
truck, driven by an agent or employee of the Defendants, ran into and struck the Plaintiff from behind on his left arm causing the Plaintiff to fall, and did run over and trap the Plaintiff's left foot underneath the right front tire of the said truck, causing the Plaintiff serious painful and permanent injury.
On 1 June 2010, the Manheim defendants answered plaintiff's complaint by substantially denying the material allegations and alleging various defenses. On 14 July 2010, plaintiff filed a voluntary dismissal as to defendant NCSC. On 30 August 2011, the Manheim defendants filed a motion for summary judgment alleging:
(1) That the Plaintiff has failed to name the proper corporate entity;
(2) That the Defendants do not currently or at the time applicable to this lawsuit own or operate the auto auction where the alleged negligence as pled in Plaintiff's Complaint occurred;
(3) That the Defendants do not currently or at the time applicable in this lawsuit employ the unnamed employee who was allegedly negligent in the course and scope of his employment;
....
(5) Plaintiff has not sufficiently alleged allegations for a claim of “piercing the corporate veil” in their Complaint; additionally the facts in this case do not support such a claim;
....
(7) Defendants are entitled to Summary Judgment because there are no issues of fact as to the ownership of the auto auction, and the improper [sic] party has not been named in this action.
On 6 September 2011, defendant's motion was allowed and plaintiff's case was dismissed with prejudice. Plaintiff appeals.
II. Standard of Review
Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law. A trial court's grant of summary judgment receives de novo review on appeal, and evidence is viewed in the light most favorable to the non-moving party.
Mitchell, Brewer, Richardson v. Brewer, ––– N.C.App. ––––, 705 S.E.2d 757, 764–65,disc. review denied,365 N.C. 188, 707 S .E.2d 243 (2011) (citations and quotation marks omitted).
Where a defendant seeking summary judgment carries his burden of proving a lack of genuine issue of fact for trial by evidentiary presumption or otherwise, the plaintiff may not rely on his bare allegations to the contrary but must, by affidavits or otherwise, set forth specific facts showing a genuine issue of fact for trial to defeat defendants' motion.
Clifton v. Fesperman, 50 N.C.App. 178, 181, 272 S.E.2d 624, 626 (1980).
III. Summary Judgment
On appeal, plaintiff argues that the trial court erred in allowing summary judgment. Plaintiff appears to concede that his injuries were caused by an employee of a business owned by NCSC, the party which plaintiff voluntarily dismissed from the case, but contends that NCSC “is a wholly owned subsidiary of Manheim Auctions Inc.” As defendants' brief points out, “[i]t appears that plaintiff's argument ... on appeal is not that the Manheim defendants owned and operated the auto auction, but that liability should extend to them by piercing of the corporate veil.”
This Court has noted that
[o]ur courts will disregard the corporate form and pierce the corporate veil where an individual exercises actual control over a corporation, operating it as a mere instrumentality or tool. Under these circumstances, the controlling individual is liable for the torts of the corporation. The instrumentality rule has been set forth by our Supreme Court as follows:
When a corporation is so operated that it is a mere instrumentality or alter ego of the sole or dominant shareholder and a shield for his activities in violation of the declared public policy or statute of the State, the corporate entity will be disregarded and the corporation and the shareholder treated as one and the same person, it being immaterial whether the sole or dominant shareholder is an individual or another corporation.
Liability may be imposed on an individual controlling a corporation as an instrumentality when he had:
(1) Control, not mere majority or complete stock control, but complete domination, not only of 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; and
(2) Such control must have been used by the defendant to commit fraud or wrong, to perpetrate the violation of a statutory or other positive legal duty, or a dishonest and unjust act in contravention of plaintiff's legal rights; and
(3) The aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of.
Becker v. Graber Builders, Inc., 149 N.C.App. 787, 790–91, 561 S.E.2d 905, 908 (2002) (citations and quotation marks omitted).
In Becker, this Court considered the plaintiff's complaints to determine if a proper claim for piercing the corporate veil had been made and stated:
[The p]laintiff alleges that Dwight Graber: (1) exercised complete domination and control over Graber Builders, Inc.; (2) that such control was used to violate the North Carolina Building Code and commit fraud against defendant; and (3) that the aforesaid control and the violation of the Code proximately caused damages to plaintiff in that she was required to install a new septic system. Accordingly, the allegations in plaintiff's complaints are sufficient to state a claim for disregard of the corporate entity.
Id. at 791, 561 S.E.2d at 908–09 (quotation marks omitted). On the other hand plaintiff's complaint makes no allegations regarding Manheim Auctions Inc.'s wrongful control over NCSC which resulted in injury. See id. at 790–91, 561 S.E.2d at 908. As such, plaintiff has not properly pled a claim for piercing the corporate veil. See id. In addition, plaintiff has failed to direct this Court's attention to any affidavits or other evidence which would support a claim for piercing the corporate veil. See Clifton, 50 N.C.App. at 181, 272 S.E.2d at 626.
In support of their motion for summary judgment, the Manheim defendants presented the affidavit of Mr. James Demetry, Chief of Staff at Manheim Inc., stating that none of the Manheim defendants owned or operated the automobile auction where plaintiff was allegedly injured. Mr. Demetry's affidavit further averred that NCSC operated the automobile auction at issue. Plaintiff has not refuted this evidence nor has plaintiff properly asserted a claim to pierce the corporate veil of the Manheim defendants, so we must affirm. See Mitchell, ––– N.C.App. at ––––, 705 S.E.2d at 764–65.
IV. Conclusion
For the foregoing reasons, we affirm.
AFFIRMED. Judges HUNTER, Robert C. and ERVIN concur.
Report per Rule 30(e).