You are here: / / Pleading Requirements for Piercing the Corporate Veil Described in Some...
,

Pleading Requirements for Piercing the Corporate Veil Described in Some Detail

The First Department determined questions of fact concerning whether the corporate veil should be pierced (alter-ego theory) had been raised.  The court explained the analytical criteria:

In order to state a claim for alter-ego liability plaintiff is generally required to allege “complete domination of the corporation [here PFLLC] in respect to the transaction attacked” and “that such domination was used to commit a fraud or wrong against the plaintiff which resulted in plaintiff's injury” … . Because a decision to pierce the corporate veil in any given instance will necessarily depend on the attendant facts and equities, there are no definitive rules governing the varying circumstances when this power may be exercised … .

If plaintiff prevails in proving that PFLLC owes it a debt …, the further allegations in the complaint are sufficiently pleaded to support plaintiff's claim that defendant is an alter-ego of PFLLC. The complaint asserts that with respect to the transaction at issue, defendant dominated and controlled the negotiations on behalf of PFLLC and actually provided the erroneous information which persuaded plaintiff to enter into the agreement. The allegations … sufficiently frame factual issues about whether defendant, as the parent company of PFLLC, commingled funds and disregarded corporate formalities … .

In addition, the allegations that defendant, through its domination of PFLLC, misrepresented the value of the assets sold and then caused PFLLC to become judgment proof, are also sufficient to support claims that defendant perpetrated a wrong or injustice against plaintiff, thus warranting intervention by a court of equity … . Wrongdoing in this context does not necessarily require allegations of actual fraud. While fraud certainly satisfies the wrongdoing requirement, other claims of inequity or malfeasance will also suffice … . Allegations that corporate funds were purposefully diverted to make it judgment proof or that a corporation was dissolved without making appropriate reserves for contingent liabilities are sufficient to satisfy the pleading requirement of wrongdoing which is necessary to pierce the corporate veil on an alter-ego theory … . Baby Phat Holding Co LLC v Kellwood Co, 2014 NY Slip Op 08364, 1st Dept 12-2-14

 

You might also like
PLAINTIFF-RELATOR BROUGHT A QUI TAM ACTION (ON BEHALF OF THE GOVERNMENT) AGAINST A BANK ALLEGING VIOLATION OF THE STATE FINANCE LAW; THE QUI TAM ACTION WAS DISMISSED FOR FAILURE TO STATE A CLAIM; EVEN THOUGH THE CITY SETTLED WITH THE BANK IN A RELATED ACTION, PLAINTIFF-RELATOR WAS NOT ENTITLED TO A PERCENTAGE OF THE SETTLEMENT (FIRST DEPT).
“Bad Faith Claims Handling” Cause of Action Properly Dismissed As Duplicative of Breach of Contract Cause of Action/Sanctions Appropriate for Inclusion of Dismissed Cause of Action in Amended Complaint
THE ARBITRATOR-PANEL DID NOT HAVE THE AUTHORITY TO RECONSIDER A PARTIAL FINAL AWARD IN THIS DISPUTE BETWEEN AN INSURER AND THE INSURED, THE PANEL INITIALLY FOUND THAT A $10 MILLION SETTLEMENT PAID BY THE INSURED WAS NOT A COVERED LOSS, BUT SUBSEQUENTLY REVERSED ITSELF (FIRST DEPT).
CEREMONIAL MARRIAGE SUFFICIENTLY PROVEN, CHILD ENTITLED TO SUPPORT.
THE JUDGE DID NOT MAKE THE REQUIRED FINDINGS OF FACT AND CONCLUSIONS OF LAW BEFORE DETERMINING DEFENDANT’S SORA RISK-LEVEL; MATTER REMITTED (SECOND DEPT). ​
ALTHOUGH A PARTY WHO SIGNS AN AGREEMENT IS USUALLY DEEMED TO HAVE READ IT, A RELATIONSHIP OF TRUST AND CONFIDENCE BETWEEN THE PARTIES MAY ALLOW ONE PARTY TO RELY ON THE ASSURANCES OF THE OTHER, A CERTIFIED BUT UNSIGNED TRANSCRIPT OF A DEPOSITION WAS ADMISSIBLE BECAUSE IT HAD BEEN TIMELY MAILED TO OPPOSING COUNSEL (FIRST DEPT).
NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK.
PLAINTIFF’S EXPERT’S AFFIDAVIT IN THIS MEDICAL MALPRACTICE ACTION DID NOT SPECIFICALLY ADDRESS DEFENDANT’S EXPERT’S OPINIONS, THEREBY WARRANTING SUMMARY JUDGMENT IN FAVOR OF DEFENDANT (FIRST DEPT).

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

When a Party Does Not Object to Errors in a Verdict Sheet, the Jury Charge Becomes... Trial Court Abused Its Discretion When It Disqualified Defense Counsel Over...