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PLAINTIFF SHOULD NOT HAVE BEEN ALLOWED TO CONFORM THE PLEADINGS TO THE PROOF RE: PIERCING THE CORPORATE VEIL; DEFENDANT WAS PREJUDICED BY THE FAILURE TO PLEAD THE SUPPORTING ALLEGATIONS (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined plaintiff should not have been allowed to conform the pleadings to the proof re: piercing the corporate veil for two reasons: (1) defendant Chilled was prejudiced by the failure to plead facts supporting the alter ego theory; and (2) the proof at trial did not demonstrate Chilled was the alter ego of defendant EMB:

Chilled demonstrated that it was prejudiced in the preparation of its defense by the lack of notice that the plaintiff would seek to pierce EMB’s corporate veil or prove that Chilled was an alter ego of EMB … . In general, claims involving veil piercing or alter ego liability are fact-laden … . Chilled established that the lack of notice hindered its ability to present evidence that might have shown … that corporate formalities were respected or that EMB and Chilled dealt with each other at arms’ length. * * *

… [T]he plaintiff failed to establish that Chilled exercised complete domination over EMB in the transaction with the plaintiff … . …

,,, [T]he plaintiff failed to establish that Chilled used its alleged domination of EMB to commit a fraud or wrong against the plaintiff … . Americore Drilling & Cutting, Inc. v EMB Contr. Corp., 2021 NY Slip Op 05845, Second Dept 10-27-21

 

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