Williams v. Farmwald, 2016 Ohio 7151

On Dec. 27, 2010, 15-year-olds Yabrielle Williams and Derrick Arthur were shot at a crowded “Teen Night” at Evolution Ultra Lounge; both sustained serious injuries and significant medical bills.
Club capacity was exceeded by ~150 people; multiple fights occurred, security broke down, and an ejected patron re-entered and fired shots.
Plaintiffs sued Matthew Farmwald (club operator), Storm 28611, Inc. (his corporation), Maurice Wright (security), Evolution Ultra Lounge, and others, alleging negligent security and related failures.
After a bench trial, the trial court found Farmwald, Wright, Storm 28611, Inc., and Evolution Ultra Lounge jointly and severally liable and awarded damages to the plaintiffs; Alpha Protection was dismissed as non-existent at the time.
Farmwald appealed, arguing he should be shielded from personal liability by his active corporation (Storm 28611, Inc.); the trial court and appellate court analyzed veil-piercing under Belvedere.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Farmwald is personally liable despite corporate form	Farmwald exercised control and committed wrongful acts through Storm; plaintiffs seek to pierce veil and hold him liable	Storm is an active corporation; Farmwald entitled to corporate immunity from personal liability	Court held Farmwald personally liable; pierced the corporate veil and also found he committed torts personally
Whether first Belvedere prong (alter ego) is met	Plaintiffs: Storm was a façade; corporate formalities absent	Farmwald: corporation existed and shields him	Court: first prong met — complete control, no corporate records, inadequate capitalization, façade
Whether second Belvedere prong (fraud/illegal/similarly unlawful act) is met	Plaintiffs: deficient security hiring/training and conduct to maximize profit amounted to tortious/unlawful act	Farmwald: security arrangements were corporate matters and do not warrant veil-piercing	Court: second prong met — control exercised in manner producing torts/unjust acts; even without veil-piercing, officer liable for personal torts related to corporate business
Whether plaintiffs suffered injury from the wrongful control (third Belvedere prong)	Plaintiffs: injuries resulted from Farmwald’s control and negligence	Farmwald: corporate form insulated him from personal responsibility	Court: third prong met — plaintiffs suffered unjust loss traceable to Farmwald’s control and negligence

Belvedere Condominium Unit Owners’ Assoc. v. R.E. Roark Cos., 67 Ohio St.3d 274 (1993) (establishes three-part test for piercing corporate veil)
Dombroski v. Wellpoint, Inc., 119 Ohio St.3d 506 (2008) (construes second Belvedere prong to include fraud, illegal acts, or similarly unlawful acts)
C.E. Morris Co. v. Foley Constr. Co., 54 Ohio St.2d 279 (1978) (standard for reviewing manifest-weight of the evidence)
Seasons Coal Co. v. Cleveland, 10 Ohio St.3d 77 (1984) (deference to trial court as factfinder on credibility)
LeRoux’s Billyle Supper Club v. Ma, 77 Ohio App.3d 417 (1991) (factors for alter-ego/veil-piercing analysis)