SEA-LAND SERVICES, INC v. PEPPER SOURCE 993 F.2d 1309 (7th Cir. 1993) CASE BRIEF

SEA-LAND SERVICES, INC V. PEPPER SOURCE

993 F.2d 1309 (7th Cir. 1993)

NATURE OF THE CASE: This is an appeal from a judgment piercing a corporate veil and awarding P substantial damages.

FACTS: P shipped the peppers on behalf of D. D then stiffed P on the freight bill, which was rather substantial. P filed a federal diversity action and the district court entered a default judgment in favor of P in the amount of $86,767.70. D was no-where to be found; it had been 'dissolved' in mid-1987 for failure to pay the annual state franchise tax. D apparently had no assets. P could not recover its judgment against D. P then brought this action against Gerald J. Marchese and five business entities he owns: PS, Caribe Crown, Inc., Jamar Corp., Salescaster Distributors, Inc., and Marchese Fegan Associates. P to pierce D's corporate veil and render Marchese personally liable for the judgment and then 'reverse pierce' Marchese's other corporations so that they, too, would be on the hook for the $87,000. P alleged that all of these corporations 'are alter egos of each other and hide behind the veils of alleged separate corporate existence for the purpose of defrauding plaintiff and other creditors.' P filed an amended complaint adding Tie-Net International, Inc. Tie-Net is half owned by Marchese and George Andre. P moved for summary judgment. The court granted P's motion. The court discussed and applied the test for corporate veil-piercing explicated in Van Dorn Co. v. Future Chemical and Oil Corp. D appealed. The court reversed and remanded for further fact finding to meet its burden under the Van Dorn case. The court awarded P damages and found that P had satisfied the second prong by establishing wrongs beyond its inability to collect on the judgment. D appealed.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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