Austin Capital Collision, LLC// Barbara Pampalone v. Barbara Pampalone// Cross-Appellee, Austin Capital Collision, LLC and Eric Hinojosa
03-15-00447-CV
| Tex. App. | Dec 18, 2015Background
- Plaintiff Pampalone sued Austin Capital Collision, LLC (ACC) for breach of an alleged unwritten loan agreement and obtained a judgment against ACC; ACC appealed and posted a supersedeas bond.
- Pampalone separately sued ACC’s principal shareholder, Eric Hinojosa, seeking to pierce the corporate veil and hold him personally liable; the trial court declined to pierce the veil and entered judgment for Hinojosa.
- Pampalone’s petition did not plead actual fraud or fraudulent-transfer theories; her alter-ego allegations asserted unity of interest and that holding only the corporation liable would result in injustice.
- The trial court expressly found the evidence insufficient to show Hinojosa used the entity to perpetrate a fraud, and declined to make other alter-ego findings.
- Hinojosa (as cross-appellee) argues (1) the underlying claim against ACC is unenforceable under the statute of frauds, (2) Pampalone failed to plead or prove the fraud elements necessary to pierce the veil in a contract case, and (3) there is no evidence that refusing to pierce the veil will operate an injustice given ACC’s supersedeas bond.
Issues
| Issue | Pampalone's Argument | Hinojosa's Argument | Held |
|---|---|---|---|
| Enforceability of the alleged unwritten loan against ACC (statute of frauds) | The loan is enforceable and supports judgment against ACC. | The loan was unwritten and unenforceable under the statute of frauds; if judgment against ACC fails, piercing is moot. | Trial-court judgment against ACC is challenged on statute-of-frauds grounds; if ACC’s judgment fails, alter-ego claim against Hinojosa lacks a basis. |
| Adequacy of pleadings to impose alter-ego liability in a contract case | Pleadings asserted unity and injustice sufficient to pierce the veil. | Pleadings did not allege actual or statutory fraud required to pierce the veil in a breach-of-contract case. | Trial court relied on lack of pleaded or proven fraud; appellee argues that failure to plead fraud defeats alter-ego claim. |
| Sufficiency of evidence to support piercing (fraud/use of entity) | Evidence supports inference that Hinojosa used entities to avoid obligations. | Trial court, as factfinder, found evidence insufficient to show use of the entity to perpetrate fraud; that factual finding deserves deference. | Trial court found insufficient evidence of fraud; appellee contends that finding is supported by record and should be affirmed. |
| Injustice element (whether refusing to pierce will leave plaintiff unpaid) | Failure to pierce will operate an injustice because older entities/owners cannot satisfy debt. | No evidence ACC cannot satisfy judgment; ACC posted supersedeas bond; no injustice shown. | Record lacks evidence of probable injustice; supersedeas protects plaintiff pending appeal—no basis to pierce veil. |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (factfinder credibility and sufficiency review principles govern appellate review of factual findings)
- Mancorp., Inc. v. Culpepper, 802 S.W.2d 226 (Tex. 1990) (elements for piercing corporate veil in contract context)
- Chesser v. Lifecare Mat. Servs., 356 S.W.3d 613 (Tex. App.—Fort Worth 2011) (discussing necessity of fraud elements when piercing veil in contract cases)
- Stewart & Stevenson Services, Inc. v. Serv-Tech, Inc., 879 S.W.2d 89 (Tex. App.—Houston [14th Dist.] 1994) (ownership/control element of alter ego analysis)
- Cappuccitti v. Gulf Industrial Products, Inc., 222 S.W.3d 468 (Tex. App.—Houston [1st Dist.] 2007) (piercing veil justified where sole shareholder rendered corporation insolvent and unable to satisfy creditor)