60 So. 3d 632
La. Ct. App.2011Background
- Bottom Line Equipment, L.L.C. leased three pieces of construction equipment to BZ Equipment, L.L.C. in 2007; BZ ceased business in 2008, leaving unpaid debts.
- Bottom Line sued BZ and members John Bodilly and Darin Zech, seeking to pierce the corporate veil and hold Bodilly personally liable.
- Bodilly (Wisconsin) was managing member; Zech (Louisiana) was a participating member; Bodilly signed documents as managing member.
- Bottom Line sought damages for unpaid rent and repair losses after repossession of equipment damaged beyond normal wear-and-tear.
- Trial court found no evidence of fraud or alter-ego behavior and dismissed Bodilly; court treated BZ as separate from Bodilly and others.
- On appeal, Bottom Line challenged veil piercing, arguing totality of circumstances and single-entity theory supported personal liability; court affirmed dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the veil should be pierced under five-factor test | Bottom Line contends Bodilly used BZ to defraud creditors. | Bodilly argues no fraud, proper separate entities, and Haynesville factors not met. | No veil piercing; five-factor test not satisfied; judgment affirmed. |
| Whether single-entity theory should apply | Bottom Line argues the entities should be viewed as a single entity. | Bodilly argues separate entities; single-entity theory not applicable here. | Single-entity theory does not apply; recovery denied against Bodilly. |
| Whether the district court properly dismissed Bodilly and the veil issue | Bottom Line asserts trial court erred by limiting analysis and considering only Haynesville factors. | Bodilly maintains trial court properly weighed evidence and credibility; no manifest error. | No manifest error; judgment affirming dismissal affirmed. |
Key Cases Cited
- Prasad v. Bullard, 51 So.3d 35 (La.App. 5 Cir. 2010) (totality of circumstances governs alter ego piercing; five-factor list non-exclusive)
- Town of Haynesville, Inc. v. Entergy Corp., 956 So.2d 192 (La.App. 2 Cir. 2007) (five non-exclusive factors for veil piercing)
- Garrity v. St. Paul Fire & Marine Ins. Co., 984 So.2d 900 (La.App. 5 Cir. 2008) (manifest error standard; deference to credibility findings)
- Peyton Place Condominium Associates, Inc. v. Guastella, 18 So.3d 132 (La.App. 5 Cir. 2009) (alter ego considerations and limits on corporate separateness)
- ORX Resources, Inc. v. MBW Exploration, LLC, 32 So.3d 931 (La.App. 4 Cir. 2010) (alter ego doctrine extends to LLCs; disregard of corporate form in certain contexts)