Green v. Ziegelman, 310 Mich. App. 436

Plaintiffs (Green, Hendrickson, Esper, and Libwag, LLC) obtained a 2006 arbitration award (reduced to judgment) against Ziegelman Architects for breach of an architectural agreement; judgment was about $156,313.
Plaintiffs later learned via a 2006 creditor’s exam that Ziegelman Architects had almost no assets or ongoing business; Ziegelman was sole shareholder/officer and effectively the firm’s only architect.
Ziegelman provided extensive, undocumented loans and benefits to Ziegelman Architects and used the firm to pay his personal expenses; he formed a new entity shortly after the judgment and transferred assets to avoid creditor collection.
Plaintiffs filed a separate action (2012, after a 2010 attempt) seeking to disregard the corporate form and hold Ziegelman personally liable for the 2006 judgment, alleging alter-ego, fraudulent transfer, and Business Corporation Act violations.
The trial court found Ziegelman had operated Ziegelman Architects as an alter ego, abused corporate form, and fraudulently transferred assets, and entered judgment holding Ziegelman personally liable; defendants appealed arguing res judicata and insufficient evidence for veil piercing.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the 2012 claim to pierce the corporate veil was barred by res judicata	The veil-piercing claim could not reasonably have been raised in the 2006 arbitration because facts supporting misuse of the corporate form became evident only after the judgment and creditor’s exam	The claim arose from the same transaction and thus should have been raised earlier; res judicata and compulsory joinder bar the later suit	Denial of res judicata: plaintiffs could not, with reasonable diligence, have pleaded veil-piercing in 2006; res judicata did not apply
Whether court properly pierced the corporate veil and held Ziegelman personally liable	The corporate form was a sham: Ziegelman dominated the firm, misrepresented its viability, used it to pay personal expenses, abandoned it after judgment, and transferred assets to avoid collection	Plaintiffs failed to prove fraud/wrong and unjust loss caused by Ziegelman’s control; veil-piercing elements not met	Affirmed: trial court properly applied equitable veil-piercing (totality of circumstances showed alter-ego, misuse causing wrong, and unjust loss)

Pierson Sand and Gravel, Inc. v. Keeler Brass Co., 460 Mich 372 (doctrine of res judicata purpose and limits)
Dart v. Dart, 460 Mich 573 (res judicata bars subsequent claims arising from same transaction)
Seasword v. Hilti, Inc., 449 Mich 542 (corporate veil; presumption of separateness and alter-ego doctrine)
Wells v. Firestone Tire & Rubber Co., 421 Mich 641 (grounds for disregarding corporate entity to prevent injustice)
Gledhill v. Fisher & Co., 272 Mich 353 (three-part test for piercing: domination, fraud/wrong, unjust loss)
Klager v. Robert Meyer Co., 415 Mich 402 (totality-of-circumstances; avoid mechanistic application of veil-piercing)
Rymal v. Baergen, 262 Mich App 274 (discussion of veil-piercing elements)
Maki v. Copper Range Co., 121 Mich App 518 (formulation of piercing elements)