Pister v. State, Department of Revenue
354 P.3d 357
| Alaska | 2015Background
- Dr. James Pister, a radiologist, operated Northwest Medical Imaging, Inc. (NW Medical) in Washington; NW Medical dissolved in 1990 but continued contracting in Alaska after dissolution.
- Alaska taxed NW Medical for unpaid 1992–1995 corporate taxes; prior Office of Tax Appeals decisions constrained tax liability, but Alaska Supreme Court later held NW Medical liable for post-dissolution taxes.
- State sought to hold Pister personally liable by piercing NW Medical’s veil, seeking successor liability and voiding two transfers as fraudulent conveyances; court held NW Medical’s veil could be pierced and Skyrad liable as successor, with some contracts voided.
- Superior Court (2013) found veil piercing under Alaska’s misconduct and mere instrumentality standards, and rejected res judicata as bar; court also ruled two contracts fraudulent conveys; Pister and Skyrad appealed.
- State and appellants challenged choice of law (Alaska vs Washington) for veil piercing; trial court applied Alaska law, triggering further review.
- We affirm in part, reverse in part, and remand for limited proceedings on Maniilaq contract valuation related to fraudulent conveyance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars veil piercing suit | State argues claim freedom from preclusion; earlier judgment on liability does not preclude veil piercing | Pister argues prior case bars new veil-piercing claims | Res judicata does not bar veil piercing suit |
| What law governs veil piercing of a foreign corporation | State argues Alaska law should apply; courts apply Alaska law to veil piercing abroad | Pister argues Washington law should apply as the state of incorporation | Court applies Alaska law where appropriate and confirms piercing would be valid under both Alaska and Washington law (without deciding which governs in all respects) |
| Whether the superior court properly pierced NW Medical’s veil under Alaska law | State shows misconduct via rent scheme to evade taxes | Pister contends lack of clear misconduct under Alaska law; argues alternative basis insufficient | Veil pierced under Alaska misconduct standard; outcome supported by findings |
| Whether the ANHS and Maniilaq contracts were fraudulently conveyed | State contends transfers stripped NW Medical of assets to benefit Skyrad | Pister argues transfers were not fraudulent and/or failed proper valuation | ANHS contract voided? error; Maniilaq contract valuation flawed; remand limited to Maniilaq issue to reassess if material to judgment |
| Effect of the Maniilaq contract on judgment | Valuation supports transfer as device to fund the debt | Valuation used improper metrics; may not prove fraud | Remand on Maniilaq issue to determine sufficiency of consideration and renewal likelihood; other fraud findings affirmed |
Key Cases Cited
- Northwest Med. Imaging, Inc. v. State, Dep’t of Revenue, 151 P.3d 434 (Alaska 2006) (foundation for post-dissolution tax liability and veil piercing relevance)
- Brown v. Knowles, 307 P.3d 915 (Alaska 2013) (collateral issues in veil piercing; multiple standards considered)
- Latham v. Palin, 251 P.3d 341 (Alaska 2011) (elements for collateral estoppel applicability)
- Meisel v. M & N Modern Hydraulic Press Co., 645 P.2d 689 (Wash. 1982) (Washington veil-piercing standard and nexus between abuse and harm)
- Truckweld Equip. Co. v. Olson, 618 P.2d 1017 (Wash. App. 1980) (Washington analysis of veil-piercing requirements)
- Landstar Inway, Inc. v. Samrow, 325 P.3d 327 (Wash. App. 2014) (relevance of nexus between abuse and injury in veil-piercing context)