WILLARD F. WEIKEL, CPA VS. LISA HARRIS VS. ROBERT HARRIS(DC-5195-15, CAMDEN COUNTY AND STATEWIDE)
A-0711-15T3
| N.J. Super. Ct. App. Div. | Jun 6, 2017Background
- Bailey and Robert Harris divorced in 2015. Harris owned and operated Family Limousine, II, Inc. (Limo); Bailey worked for Limo at times but there was no evidence she was a shareholder or officer.
- CPA Willard Weikel provided accounting services for Limo and for Bailey and Harris personally from 2009–2014; invoices went unpaid.
- Limo and the couple filed bankruptcy in May 2010; Weikel sought only fees for services rendered after the bankruptcy discharge (totaling $12,595), later reduced by the trial court to $11,155.
- Weikel sued Bailey in Special Civil Part seeking recovery of unpaid fees; Bailey filed a third-party complaint against Harris for indemnification.
- The trial court found Bailey liable under an implied-recovery theory (quantum meruit) for fees attributable to the couple’s personal matters and also held her responsible for Limo’s fees based on the business being a closely-held family operation; court dismissed third-party complaint without prejudice to Family Part allocation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bailey is liable for Limo’s corporate debts | Weikel argued Bailey should pay outstanding fees billed to Limo because the business was a family-run operation and she participated in it | Bailey argued she was an employee (not a shareholder or officer); corporate separateness shields her from corporate liabilities | Reversed in part: court held no evidence to pierce the corporate veil; fees attributable to Limo are not Bailey’s and trial court must determine which fees are corporate-related and vacate that portion of judgment |
| Whether a binding contract existed between Bailey and Weikel | Weikel asserted services were performed under an oral agreement with the couple and billed to each | Bailey denied a contract with Weikel for Limo or full personal responsibility | Noted but not relied on: trial court did not base recovery on contract; recovery was on quantum meruit |
| Whether Weikel may recover on quantum meruit for services to Bailey and Harris personally | Weikel contended he performed services in good faith, they accepted them, expected to pay, and services had reasonable value | Bailey disputed liability for some fees but did not contest value of services for personal returns | Affirmed: elements of quantum meruit satisfied as to personal-finance services; Bailey liable for those fees |
| Whether dismissal of Bailey’s third-party complaint against Harris was proper | Weikel argued allocation of marital debts should be left to Family Part | Bailey sought indemnification from Harris if she was held liable | Affirmed: dismissal without prejudice appropriate because allocation of marital debt belongs to Family Part |
Key Cases Cited
- State Dep't of Envtl. Prot. v. Ventron Corp., 94 N.J. 473 (1983) (corporate veil may be pierced only to prevent defeat of justice, fraud, crime, or evasion of law)
- Rova Farms Resort, Inc. v. Inv'rs Ins. Co., 65 N.J. 474 (1974) (appellate deference to trial court factual findings and limited circumstances for reversal)
- Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366 (1995) (legal conclusions reviewed de novo)
- Starkey v. Estate of Nicolaysen, 172 N.J. 60 (2002) (elements required to recover in quantum meruit)
- Smith Setzer & Sons v. S.C. Procurement Review Panel, 20 F.3d 1311 (4th Cir. 1994) (Subchapter S entities remain corporations for purposes of separateness and limited liability)
- Carter v. Anderson (In re Carter), 182 F.3d 1027 (9th Cir. 1999) (describing Subchapter S corporation status)