H. G. Hill Realty Company, L.L.C. v. Re/Max Carriage House, Inc.
2013 Tenn. App. LEXIS 474
| Tenn. Ct. App. | 2013Background
- H. G. Hill Realty filed a complaint against Re/Max Carriage House for breach of a commercial lease; original complaint February 25, 2011.
- Amended complaint (June 17, 2011) sought past-due rent; ad damnum stated total due was $206,396.48 plus other damages.
- Re/Max surrendered the premises under a stipulated order; Hill sought default judgments when no responsive pleadings were filed.
- Hill later sought to amend to name Robert L. Wood Jr. personally as a co-defendant; default judgments were entered against Re/Max (August 19, 2011) and against Wood (November 28, 2011).
- Amendment to the amended complaint joined Wood for personal liability; Hill sought relief from Wood’s default under Rule 60.02 in 2012.
- Wood moved to set aside the default judgment; trial court denied relief; appeal followed challenging piercing the corporate veil and the sufficiency of the default judgment amount.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court properly pierced the corporate veil to make Wood liable. | Pleadings allege undercapitalization, asset diversion, and misuse of the corporation to benefit Wood. | Wood argues no basis to pierce the veil; the pleadings fail to establish the requisite factors. | Yes; pleadings sufficient to pierce the veil; Wood liable jointly and severally with Re/Max. |
| Whether Wood is entitled to relief from the default judgment under Rule 60.02. | Relief should be denied because default was proper and the judgment has evidentiary support. | Wood contends the default judgment is void or improper due to pleading defects and excess damages. | No; Wood acted willfully; no 60.02 relief; judgment affirmed and case remanded. |
Key Cases Cited
- Patterson v. Rockwell Int’l, 665 S.W.2d 96 (Tenn. 1984) (default judgments; admission of facts)
- Clark v. Sputniks, LLC, 368 S.W.3d 431 (Tenn. 2012) (default judgments; scope of pleadings)
- Muroll Gesellschaft M.B.H. v. Tennessee Tape, Inc., 908 S.W.2d 211 (Tenn. Ct. App. 1995) (piercing corporate veil factors)
- Schlater v. Haynie, 833 S.W.2d 919 (Tenn. Ct. App. 1991) (piercing doctrine; equity and justice)
- Oceanics Schools, Inc. v. Barbour, 112 S.W.3d 135 (Tenn. Ct. App. 2003) (Allen factors for veil piercing)
- Pamperin v. Streamline Mfg., Inc., 276 S.W.3d 428 (Tenn. Ct. App. 2008) (piercing veil; extreme circumstances caution)
- Fidelity Trust Co. v. Service Laundry Co., 160 Tenn. 57, 22 S.W.2d 6 (1929) (corporate separateness; basis for veil piercing)