Schultz v. General Electric Healthcare Financial Services Inc.
360 S.W.3d 171
Ky.2012Background
- GE obtained a $450,000 judgment on Schultz via piercing Intra-Med veil based on pleadings.
- Schultz admitted using Intra-Med funds for personal property purchases.
- GE argued Intra-Med was Schultz’s instrumentality subject to veil piercing.
- Court of Appeals upheld piercing based on pleadings; trial court’s judgment entered.
- This Court reverses and remands for proceedings consistent with equity posture of veil piercing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether veil piercing is an equity matter and its implications for pleadings | Schultz | GE | Veil piercing is equitable; not proper on pleadings alone |
| Whether pleadings establish instrumentality and harm to justify piercing | Schultz | GE | Pleadings fail to show control causing harm; insufficient to pierce on pleadings |
| Whether trial court erred granting judgment on the pleadings | Schultz | GE | Judgment on pleadings error; remand required to proceed further |
Key Cases Cited
- White v. Winchester Land Development Corp., 584 S.W.2d 56 (Ky.App.1979) (veil piercing requires strong justification)
- Daniels v. CDB Bell, LLC, 300 S.W.3d 204 (Ky.2009) (equity-based piercing doctrine; jury issues relation)
- La Vielle v. Seay, 412 S.W.2d 587 (Ky.1966) (summary/temporary relief treated as inequitable where pleadings raise factual issues)
- City of Pioneer Village v. Bullitt County ex rel. Bullitt Fiscal Court, 104 S.W.3d 757 (Ky.2003) (CR 12.03; judgment on pleadings testing legal sufficiency)
- Inter-Tel Technologies, Inc. v. Linn Station Properties, LLC, 360 S.W.3d 152 (Ky.2012) (guide on remand handling veil piercing)