329 P.3d 368
Idaho2014Background
- Wandering Trails and Liquid Realty seek veil-piercing against Piper Ranch and the Schelhorns for an assignment deal with paving work.
- Piper Ranch is owned by Tim and Julie Schelhorn; Wandering Trails/ Liquid Realty allege unity of interest via Piper Ranch/Big Bite.
- Assignment purported to give Piper Ranch 25% in Wandering Trails in exchange for paving work valued around $160,000.
- District court granted Big Bite and Schelhorns summary judgment and denied veil-piercing against them; denied plaintiffs’ request for reconsideration.
- Court address whether Piper Ranch is alter ego of Schelhorns and whether Big Bite is liable; also addresses attorney fees on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Big Bite was properly dismissed | Plaintiffs contend contract existed between Piper Ranch and Big Bite. | No contract, written or implied, between Piper Ranch and Big Bite; Wandering Trails not third-party beneficiary. | No implied contract; Big Bite properly dismissed. |
| Piper Ranch alter ego | Piper Ranch is undercapitalized and used as conduit by Schelhorns. | LLC formalities allowed; separate bank accounts; unity of interest not shown. | No unity of interest; Piper Ranch not alter ego of Schelhorns. |
| Veil-piercing against Big Bite | Big Bite behind Piper Ranch via Circle Z; should pierce veil. | Big Bite not a party to assignment; no behind-the-veil justification. | Veil-piercing against Big Bite improper; affirmed denial. |
| Prevailing party and attorney fees for Big Bite | If reversed on other issues, Big Bite may not prevail. | Since Big Bite prevailed on summary judgment, fees appropriate. | Big Bite prevailing; fees affirmed. |
| Prevailing party and fees for Schelhorns | Schelhorns prevailed on veil-piercing; deserve fees. | Litigation complex; no clear prevailing party. | District court erred; Schelhorns entitled to fees. |
Key Cases Cited
- ParkWest Homes, LLC v. Barnson, 154 Idaho 678 (2013) (summary judgment standard; Rule 56 applies in Idaho)
- Vanderford Co. Inc. v. Knudson, 165 P.3d 261 (2007) (alter ego equitable vs. liability factors)
- VFP VC v. Dakota Co., 109 P.3d 714 (2005) (veil piercing may go to jury in some cases)
- Maroun v. Wyreless Sys., Inc., 114 P.3d 974 (2005) (alter ego analysis; jury role discussions)
- Surety Life Ins. Co. v. Rose Chapel Mortuary, Inc., 514 P.2d 594 (1973) (unity of interest factors for piercing veil)
- Hutchinson v. Anderson, 950 P.2d 1279 (1997) (LLCs distinct from members; formalities relaxed)