This Court first considered the instant case in
Mike’s Garage Door Co. v. Dews,
Mike’s Garage Doors having been insolvent from the date the foregoing lawsuit was filed, Dews brought the instant action against Ratterree and appellee-defendant Cynthia Jeanine Ratterree, Ratterree’s wife, personally as the alleged owners of Mike’s Garage Doors seeking to pierce the corporate veil to recover damages for the injuries to Dews’ hand. It is from the Bibb County Superior Court’s order granting the Ratterrees summary judgment in this case that Dews now appeals. Held:
On a motion for summary judgment under OCGA § 9-11-56, the moving party may prevail by (1) presenting evidence which negates an essential element of the plaintiff’s claims, or (2) showing an absence of evidence to support the case as to any essential element. Caven v. Warehouse Furnishings Distrib.,209 Ga. (App. 706 434 SE2d 532 ) (1993). If the moving party discharges this burden, the nonmoving party cannot rest on its pleadings, but rather must point to specific evidence giving rise to a triable issue. OCGA § 9-11-56 (e).
Speir v. Krieger,
The Ratterrees each submitted an affidavit in support of their motion for summary judgment. By his affidavit, Mike Ratterree pertinently stated that he is the sole owner and shareholder of his business, Mike’s Garage Doors; that he has been the sole owner and shareholder of Mike’s Garage Doors from its inception as a corporation; that originally Mike’s Garage Doors operated as Mike’s Overhead Doors, Inc.; that, on or about February 13, 1996, he changed the
name “Mike’s Garage Doors” in order to avoid confusion with a Conyers company known as Doors By Mike, Inc.; that “he [has] always operated . . . [Mike’s Garage Doors] as a separate and distinct entity”; that he has never commingled funds from Mike’s Garage Doors with his own personal funds; that Mike’s Garage Doors was formed to make a profit in Georgia; that “[t]he corporation has never been used to perpetrate fraud, confuse or avoid judgment creditors or avoid liability”; that when Dews’ hand was injured in 1991, Mike’s Garage Doors was operating as a corporation and was “virtually insolvent,” as it remains; that he was not present and had no participation in the installation of the overhead door at Dews’ residence; that he did not have knowledge the door had allegedly malfunctioned until he was served with Dews’ first lawsuit; and that his wife has no ownership interest in the corporation and does not participate in its operations in any capacity. Ms. Ratterree’s affidavit corroborated that of her husband, adding that “[she did] not handle
Dews opposed the Ratterrees’ motion for summary judgment, as he does on appeal, pointing to Mr. Ratterree’s deposition testimony. Pertinently, Mr. Ratterree deposed that he started the business in 1991 by depositing loans to the corporation from personal sources in the Ratterrees’ personal checking account, thereafter using the account for business and personal purposes until establishing an individual account for Mike’s Garage Doors approximately seven months later. Mr. Ratterree also deposed that, without dissolving Mike’s Garage Doors, he incorporated Mike’s Overhead Doors, Inc. in 1995; that Mike’s Overhead Doors subsequently made payments on loans to Mike’s Garage Doors as to which the Ratterrees were personally liable; and that Mike’s Garage Doors used and paid for several trucks he purchased in his own name and depreciated personally for tax purposes.
Initially, we point out that the affidavit Mr. Ratterree offered in support of his motion for summary judgment is conclusory insofar as it stated that corporate funds belonging to Mike’s Garage Doors had never been commingled with his personal funds; that Mike’s Garage Doors was insolvent at the time of the injuries to Dews’ hand and remains insolvent; and that “[t]he corporation has never been used to perpetrate fraud, confuse or avoid judgment creditors or avoid liability.” To the extent that Mr. Ratterree’s affidavit was conclusory it was inadmissible on motion for summary judgment. OCGA § 9-11-56 (e) (“[A]ffidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in the evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.”).
The rule is that where an affidavit contains conclusions which would not be admissible in evidence, the conclusions are to be disregarded in considering the affidavit in connection with the motion for summary judgment. Chandler v. Gately,119 Ga. App. 513 (1) (167 SE2d 697 ) (1969).
Love v. Love,
Notwithstanding the foregoing, unexplained conflict also exists between the affidavit Mr. Ratterree offered in support of his motion for summary judgment and his earlier deposition testimony, then otherwise of record.
Gen. Motors Corp. v. Walker,
Jury questions arise even upon an analysis of Mr. Ratterree’s affidavit as inconsistent with his deposition but explained. Upon accepting an explanation as reasonable on motion for summary judgment, any contradictory testimony remains, and we must consider all the evidence, favorable and unfavorable.
Gentile v. Miller, Stevenson & Steinichen, Inc.,
Because Dews put forward at least some evidence that Mr. Ratterree commingled the assets of Mike’s Garage Doors with his own; acted to confuse Mike’s Garage Doors, Mike’s Overhead Doors and himself as separate legal entities to avoid judgment creditors; and used Mike’s Garage Doors as an instrumentality for the transaction of his own personal affairs,
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the instant case, however analyzed, presents issues of fact for jury determination as to whether the corporate veil should be pierced.
Lau’s Corp. v. Haskins,
Judgment reversed.
Notes
On being deposed, when asked if he could document his loans to Mike’s Garage Doors, Mr. Ratterree stated that such documentation had existed, but explained, “I can’t tell you where it’s at or what I’ve done with it.”
On being deposed, Mr. Ratterree did not specify whether he incorporated Mike’s Overhead Doors before or after judgment was entered against him in Mike’s Garage Door Co. v. Dews, supra.
In order to disregard the corporate entity because a corporation is a mere alter ego or business cbnduit of a person, it should have been used as a subterfuge so that to observe it would work an injustice. To prevail based upon this theory it is necessary to show that the shareholders disregarded the corporate entity and made it a mere instrumentality for the transaction of their own affairs; that there is such unity of interest and ownership that the separate personalities of the corporation and the owners no longer exist. The concept of piercing the corporate veil is applied in Georgia to remedy injustices which arise where a party has overextended his privilege in the use of a corporate entity in order to defeat justice, perpetuate fraud or to evade contractual or tort responsibility. Because the cardinal rule of corporate law is that a corporation possesses a legal existence separate and apart from that of its officers and shareholders, the mere operation of corporate business does not render one personally liable for corporate acts. Sole ownership of a corporation by one person or another corporation is not a factor, and neither is the fact that the sole owner uses and controls it to promote his ends. There must be evidence of abuse of the corporate form. Plaintiff must show that the defendant disregarded the separateness of legal entities by commingling on an interchangeable or joint basis or confusing the otherwise separate properties, records or control.
(Citations and punctuation omitted; emphasis supplied.)
Heyde v. Xtraman, Inc.,