ERB Poultry, Inc. v. CEME, L.L.C.
20 N.E.3d 1228
Ohio Ct. App.2014Background
- Erb Poultry, Inc. supplied chicken products to Bank Shots (CEME, LLC) in 2013; payments were made by two checks which Bank Shots later stopped; Erb alleged intentional stop-payment to avoid payment for non-conforming goods.
- Erb sought damages of $3,072.30 plus interest, costs, and fees; CEME denied liability and counterclaimed for lost profits.
- Ewart, sole manager/owner of CEME, moved to dismiss or obtain summary judgment to avoid personal liability; Erb argued he was alter ego of CEME.
- Erb later amended complaint adding a claim for Passing Bad Checks under R.C. 2913.11; discovery revealed Ewart’s responses to interrogatories but not production of requested documents.
- The trial court granted summary judgment for Erb against Ewart personally; CEME/Ewart’s untimely responses were not considered; the judgment against Ewart was reversed on appeal and remanded for further proceedings as to Erb’s claim against Ewart.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court properly pierced the corporate veil to hold Ewart personally liable | Erb：Ewart controlled CEME; sole member/manager; alter ego | Ewart：corporate form separate; no veil piercing | No; veil piercing not supported by record; reversed as to Ewart |
| Whether Belevdere factors supported piercing the corporate veil | Erb contends factors met due to sole ownership | Ewart argues lack of indistinguishability and intent | Bevedere not satisfied; judgment against Ewart reversed |
| Whether the trial court properly struck untimely responses to summary judgment | Erb relied on timely filings; responses timely within window | Responses untimely; court acted within discretion to strike | No abuse of discretion; court did not err in not considering untimely response |
| Whether the trial court correctly granted summary judgment against CEME | Erb showed proper delivery, conforming goods; nonconformity lacked substantiation | CEME asserted nonconforming goods; contract rights under UCC 1302 | Summary judgment in Erb’s favor affirmed as to CEME on goods-rejection theory |
| Whether the counterclaims were properly resolved by the summary judgment order | Erb’s motion resolved all claims | Counterclaims not properly heard; due process concerns | Implicitly resolved; remanded for further proceedings as to Ewart only |
Key Cases Cited
- Belvedere Condominium Unit Owners' Assn. v. R.E. Roark Cos., Inc., 67 Ohio St.3d 274 (1993) (veil-piercing factors; alter ego analysis)
- Zimmerman v. Eagle Mtge. Corp., 110 Ohio App.3d 762 (1996) (corporate separateness; sole ownership does not auto pierce)
- Charvat v. Farmers Ins. Columbus, Inc., 178 Ohio App.3d 118 (2008) (corporate veil piercing principles; limited discussion of control)
- Springfield v. Palco Investment Co., Inc., 2013-Ohio-2348 (2d Dist.) (alter ego analysis; focus on true issue of alter ego, not mere dominion)
- Dombroski v. WellPoint, Inc., 119 Ohio St.3d 506 (2008) (second Belvedere prong requires fraud/illegal act; not mere inequity)
- Trajcevski v. Bell, 115 Ohio App.3d 289 (9th Dist.) (buyer’s duty to hold rejected goods; effect on restitution)