542 P.3d 1159
Alaska2024Background
- MJ Corporation (MJ Corp.), operator of a gas station and convenience store, owned an ATM for which it supplied vault cash and received most transaction fees.
- Societe Financial, LLC (d/b/a Alaska ATM Service), managed by James Dainis, processed ATM transactions for MJ Corp., taking a minor portion of fees.
- Beginning in late 2019, MJ Corp. discovered missing electronic deposits and contacted Societe; Societe made partial repayment but MJ Corp. claimed it was owed much more.
- MJ Corp. subpoenaed third-party processors and revealed $58,339 of disputed deposits went into accounts controlled by Societe, Dainis, or related companies.
- MJ Corp. sued Societe and Dainis for breach of contract, conversion, and to pierce the corporate veil to hold Dainis personally liable; the superior court granted summary judgment for MJ Corp. on all claims.
- Societe and Dainis appealed the summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of Contract | Societe breached an implied contract by not paying agreed funds | There is a contract term barring late claims over 30 days | Genuine issue of material fact precludes SJ—Reversed |
| Conversion | Societe exercised dominion/control over funds owed to MJ Corp. | No intentional deprivation; errors due to processors/others | SJ proper; all elements of conversion satisfied |
| Piercing Corporate Veil | Dainis should be personally liable as Societe’s alter ego | Insufficient evidence for personal liability | Not enough evidence for veil-piercing—Reversed |
| Award Against Related Entities | MJ Corp. should recover from related companies' accounts | Not all entities were proper parties or had evidence for veil-piercing | Must amend to add entities if seeking recovery |
Key Cases Cited
- Brooks Range Petrol. Corp. v. Shearer, 425 P.3d 65 (Alaska 2018) (establishing breach of contract requires proof of contract, breach, and damages)
- Christensen v. Alaska Sales & Serv., Inc., 335 P.3d 514 (Alaska 2014) (standard for summary judgment; burden shifting and sufficiency of evidence)
- Silvers v. Silvers, 999 P.2d 786 (Alaska 2000) (elements of conversion and required intent)
- Brown v. Knowles, 307 P.3d 915 (Alaska 2013) (standards and factors for piercing the corporate veil in Alaska)
- Uchitel Co. v. Telephone Co., 646 P.2d 229 (Alaska 1982) (six-factor test for alter ego/mere instrumentality veil-piercing)