Opinion
DOCKET NO. A-3915-14T1
10-07-2016
CRISTIAN OSSA, Plaintiff-Appellant, v. KALYANA MITRA L.L.C., A/K/A WELLNESS POSSIBILITIES, and DAWN NOBLE, Defendants, and KATHY MILLER, Defendant-Respondent.
Cristian Ossa, appellant pro se. Raymond A. Grimes, attorney for respondent.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is only binding on the parties in the case and its use in other cases is limited. R.1:36-3. Before Judges Yannotti and Fasciale. On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-3109-11. Cristian Ossa, appellant pro se. Raymond A. Grimes, attorney for respondent. PER CURIAM
Plaintiff appeals from a March 25, 2015 default judgment entered against defendant Kalyana Mitra L.L.C. a/k/a Wellness Possibilities (Wellness Possibilities). The court entered the default judgment in the aftermath of a February 24, 2014 order granting partial summary judgment in favor of defendants Wellness Possibilities, its Chief Executive Officer, Kathy Miller, and its Chief Marketing Officer, Dawn Noble. Plaintiff also appeals from an August 12, 2014 order denying his motion to amend his complaint. We affirm.
This is primarily a breach of contract case pertaining to plaintiff's former employment with Wellness Possibilities. Plaintiff acted as its Chief Information Officer and Vice President of Operations. Pertinent to this appeal is plaintiff's attempt to pierce the corporate veil seeking to hold Miller and Noble personally liable.
Plaintiff filed a six-count complaint in November 2011, alleging he worked for Wellness Possibilities from October 2009 until January 2011 in exchange for a salary and equity interest in the company. He alleged he was entitled to reimbursement for work performed for the company, expenses incurred within his scope of employment, and for a loan he extended to Wellness Possibilities. The February 24, 2014 order granting partial summary judgment to defendants included the dismissal of count six, piercing the corporate veil. Thereafter, the court denied plaintiff's motion to amend his complaint to add causes of action dismissed by the summary judgment order.
On appeal, plaintiff argues genuine issues of material fact precluded summary judgment as to his piercing the corporate veil allegations, and plaintiff contends that the judge erred by denying his motion to amend the complaint to add causes of action against Miller and Noble personally.
We review a summary judgment order de novo, applying the same standard governing the trial court, Oyola v. Xing Lan Liu, 431 N.J. Super. 493, 497 (App. Div.) (citations omitted), certif. denied, 216 N.J. 86 (2013), but we accord no deference to its legal conclusions. Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 382-83 (2010) (citations omitted). Under that standard, summary judgment is appropriate where, considering the evidence in the light most favorable to the non-moving party, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. R. 4:46-2(c); see also Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
Piercing the corporate veil is an equitable doctrine invoked to provide a remedy for an underlying wrong, where a remedy would otherwise be unenforceable because the primary defendant is a corporation without sufficient assets to pay the award. See Verni ex rel. Burstein v. Harry M. Stevens, Inc., 387 N.J. Super. 160, 198-99 (App. Div. 2006), certif. denied, 189 N.J. 429 (2007). Courts developed the doctrine to prevent the corporate form from "being used to defeat the ends of justice" or as a vehicle for an illegitimate purpose. State, Dept. of Envtl. Prot. v. Ventron Corp., 94 N.J. 473, 500 (1983).
A party seeking to pierce the corporate veil bears the burden of proving that doing so is appropriate. Richard A. Pulaski Constr. Co. v. Air Frame Hangars, Inc., 195 N.J. 457, 472 (2008) (citations omitted). "[A] corporation is an entity separate from its stockholders[,]" and "[i]n the absence of fraud or injustice, courts generally will not pierce the corporate veil to impose liability on the corporate principals." Lyon v. Barrett, 89 N.J. 294, 300 (1982) (citations omitted).
Generally, veil-piercing is appropriate only where the corporation's principals misused the corporate entity "to perpetrate fraud, to accomplish a crime, or otherwise to evade the law." State, Dept. of Envtl. Prot., supra, 94 N.J. at 500. Courts consider numerous factors, including whether the corporation was undercapitalized at formation and the extent to which the principals observed corporate formalities. Id. at 500-01. In general, the factfinder determines whether veil- piercing is appropriate "unless there is no evidence sufficient to justify disregard of the corporate form." Verni, supra, 387 N.J. Super. at 199.
Considering the evidence in the light most favorable to plaintiff, we conclude there is no genuine issue of material fact and that Miller and Noble are entitled to judgment as a matter of law. Plaintiff generally makes bald assertions that Miller treated Wellness Possibilities as her "alter ego," committed fraud by transferring monies to her other company, did not follow corporate formalities, and fraudulently induced plaintiff into working for the company and extending a loan, resulting in unjust enrichment. Plaintiff failed to offer evidence refuting the undisputed record, which established that there is no basis for piercing the corporate veil in this case. The record reflects sufficient corporate formalities were followed, which is evidenced by documentation of minutes of meetings, notes, and agendas, and tax and bank records indicating company funds were not siphoned for personal use. Further, the record reflects that Miller was not taking money from Wellness Possibilities, but was paying back her husband's company because it was Wellness Possibilities' creditor. In addition, there is a no evidence that Miller personally guaranteed plaintiff's loan, although the loan existed. Moreover, there is no evidence of injustice to warrant piercing the corporate veil given that Miller and Noble are also owed substantially more funds from the company than plaintiff, which they will not receive.
As to plaintiff's motion to amend his complaint, although leave to amend under Rule 4:9-1 is to be liberally granted, Notte v. Merchs. Mut. Ins. Co., 185 N.J. 490, 501 (2006), we generally will not disturb a trial judge's exercise of discretion on such a motion absent a "clear abuse of discretion." Franklin Med. Assocs. v. Newark Pub. Sch., 362 N.J. Super. 494, 506 (App. Div. 2003) (quoting Salitan v. Magnus, 28 N.J. 20, 26 (1958)). This exercise involves a two-step evaluation, considering the extent of prejudice to the non-moving party, and whether the amendment sought would prove futile. Notte, supra, 185 N.J. at 501. Indeed, a court must consider the factual context of the motion, including the reason for delay, and whether the movant is seeking to avoid an otherwise applicable rule of law. Bldg. Materials Corp. of Am. v. Allstate Ins. Co., 424 N.J. Super. 448, 484-85 (App. Div.), certif. denied, 212 N.J. 198 (2012).
Here, by moving to amend the complaint, plaintiff ignores the prior order granting partial summary judgment and rejecting plaintiff's allegation of piercing the corporate veil. Rather than seeking reconsideration of the prior ruling, plaintiff sought to amend his complaint to add several counts against Miller and Noble, predicated largely on similar arguments to those underlying his contentions for piercing the corporate veil. Such an amendment would clearly be futile in light of the prior ruling rejecting the veil-piercing remedy and shielding Miller and Noble from personal liability.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION