Appellate court again declines to pierce corporate veil on rehearing

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An Indianapolis man who won $3,000 in a small claims dispute with a fencing company but lost in his bid to pierce the corporate veil has also lost his arguments on appellate rehearing.

The Court of Appeals of Indiana in December 2021 affirmed the Washington Township Small Claims Court’s decision not to pierce the corporate veil in a dispute between Sjon Martin and Top Quality Professional Construction LLC. Martin hired To Quality to install a fence at his house and paid a deposit, but the fence was never installed and the money was not refunded.

In a rehearing petition, Martin argued the Court of Appeals failed to address all dispositive issues on appeal — namely, “the Trial Court’s significant departure from the trial rules.” According to Martin, he is entitled to a default judgment against Tina Krise — an individual member of Top Quality — because she failed to appear.

But the COA rejected that argument in a rehearing opinion, writing, “Applying Indiana Small Claims Rule 10(B), Tina Krise did not need to appear, and, quite properly, she was not defaulted.”

“Once Martin signed the ‘Proposal’ with the LLC, the LLC, not Joe or Tina Krise individually, then became responsible to Martin to complete the fence installation. The Proposal Martin signed was executed by Joe Krise as a representative of the LLC, not by Joe Krise individually,” Judge Paul Mathias wrote Monday. “While the record shows that Tina may have interacted with Martin at times, she is not liable for the action or inaction of the LLC. Therefore, her appearance was not required as a matter of substantive law and entry of default judgement against her would have been improper.

“In addition, the last requirement of Indiana Small Claims Rule 10(B)(4) requires that ‘[t]he plaintiff [Martin] has a prima facie case’ against the defendant,” Mathias continued. “Our review of the transcript clearly shows that Martin did not have a prima facie case against either of the Krises individually. As indicated in the first footnote to our original opinion, individual liability might be established in proceedings supplemental to judgment but was not present at the time of the hearing.”

Martin also argued the trial court departed from the trial rules when it did not require the LLC to hire an attorney. But the COA noted Martin did not raise that issue in the trial court, so he waived it on appeal.

Lastly, Martin argued the COA “significantly” misquoted part of his brief, resulting in a “gross mischaracterization of his argument.”

But the appellate court determined the language in its originally opinion “capture[d] the issue contained in Martin’s rhetorical question, namely, how was he to prove the evidence needed to pierce the corporate veil without access to Joe Krise?”

“Once again,” Mathias wrote,” the answer is found in the first footnote to our original opinion: through proceedings supplemental.”

The case is Sjon Martin v. Joe Krise, Tina Krise, Top Quality Professional Construction, LLC, 21A-SC-1337.

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