Wh Smith, Plc v. Benages & Associates, Inc.
2010 Fla. App. LEXIS 19811
| Fla. Dist. Ct. App. | 2010Background
- Benages sued W.H. Smith entities; sought to pierce corporate veil under alter ego theory to reach Smith PLC for a Florida breach claim.
- Trial court denied Smith PLC's Motion to Dismiss, applying alter ego theory based on evidence.
- Smith PLC is a UK public limited company; Smith U.S. Defendants are separate US entities with independent operations.
- Allegations centered on Smith PLC allegedly dominating Smith U.S. Defendants and directing actions to breach the contract with Benages.
- Court reviews de novo the jurisdictional ruling and reverses, holding Benages cannot prove alter ego and improper conduct; remands with instruction to dismiss.
- Procedural timeline includes 2001 contract, 2003 termination, 2009/default judgment against Smith U.S. Defendants, and 2010 pleadings for piercing the veil.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Smith U.S. Defendants were mere instrumentality of Smith PLC | Benages argues dominance and control by Smith PLC over Smith U.S. Defendants | Smith PLC contends independent existence and sufficient separateness | Unproven; cannot meet prong one; reversal warranted |
| Whether Smith PLC engaged in improper conduct in formation/use of Smith U.S. Defendants | Smith PLC directed breach to make judgments uncollectible | Merely using a shell to breach a contract is insufficient, without more deceitful conduct | Even if true, not enough to pierce; not sufficient improper conduct |
| Whether the trial court should have held an evidentiary hearing under Venetian Salami | Affidavits conflict; hearing needed to resolve jurisdiction | Record supports ruling without live testimony | Remand required for evidentiary hearing unless no factual dispute remains |
Key Cases Cited
- Venetian Salami Co. v. Parthenais, 554 So.2d 499 (Fla. 1989) (two-step process for long-arm jurisdiction; applicable to alter ego)
- Bellairs v. Mohrmann, 716 So.2d 320 (Fla. 2d DCA 1998) (alter ego long-arm requires piercing the veil with proper pleadings and proof)
- Gasparini v. Pordomingo, 972 So.2d 1053 (Fla. 3d DCA 2008) (veil piercing requires substantial dominance and improper conduct)
- Merkin v. PCA Health Plans of Fla., Inc., 855 So.2d 137 (Fla. 3d DCA 2003) (addressed alter ego framework and burden-shifting under Venetian Salami)
- Geigo Props., LLP v. R.J. Gators Real Estate Grp., Inc., 849 So.2d 1109 (Fla. 4th DCA 2003) (mere use of a shell for breach not enough to pierce veil)
- North American Clearing, Inc. v. Brokerage Computer Sys., Inc., 666 F. Supp. 2d 1299 (M.D. Fla. 2009) (breach/convertual conduct alone may be insufficient to pierce the veil)