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COA reverses piercing of corporate veil, but upholds slander of title finding

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A Hendricks County storage facility’s claims of breach of contract and slander of title were affirmed on appeal against a contractor hired by the facility to provide excavation services. The Indiana Court of Appeals reversed the piercing of Country Contractors Inc.’s corporate veil to find its two shareholders personally liable.

A Westside Storage of Indianapolis Inc. hired Country Contractors in August 2007 and work began in summer of 2008. Country shareholders Jahn and Stephen Songer were not involved in the contract negotiations as another employee worked with Westside. Country then subcontracted out most of the work. It left the worksite without completing the job and didn’t pay several subcontractors.

Those subcontractors filed mechanic’s liens, which Westside paid. It had to hire another company to complete the job. Complicating the matter is that Country filed a notice of intent to hold a mechanic’s lien on Westside’s property in the amount of the total owed to the subcontractors.

Westside sued, alleging breach of contract and slander of title, and it requested piercing of the corporate veil to hold the Songers personally liable.

The trial court ruled in favor of Westside and against Country and the Songers personally, awarding $117,000 in damages, which consisted of costs to complete the project, prejudgment interest, attorney fees and damages for delay of the project caused by Country’s breach.

In Country Contractors, Inc., Stephen Songer, and Jahn Songer v. A Westside Storage of Indianapolis, Inc., 32A01-1304-CC-155, the Court of Appeals reversed the piercing of the corporate veil, finding that the Songers did not use the corporation to engage in misconduct to their own benefit. Westside also failed to establish that Country’s dwindling capital was due to anything other than a general downturn in the economy or construction industry, Judge Terry Crone wrote.

Crone also noted that lack of recourse because Country is now bankrupt is “simply not a proper basis for piercing the corporate veil.”

The judges affirmed the slander of title finding with respect to Country, however. When Country filed its lien claim, both the subcontractors’ lien claims and the release of lien based on Westside’s direct payment to the subcontractors were on file in the county records. As such, Country had constructive notice of those entries, and its filing of an invalid lien claim constitutes evidence sufficient to support the finding that it slandered Westside’s title.

The $17,500 in attorney fees award is reasonable, but the COA remanded for further proceedings regarding delay damages and prejudgment interest because the nearly $34,000 amount adopted by the trial court was speculative.
 

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  1. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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