*1
INTERCEPT Appellee
Plaintiff and FINANCIAL, LLC, Cyber dba
CALIMA Funding, Defendant
Cash individually,
Edgar G. Appellant.
Defendant and
No. 20060307. Dakota. Court of North
Supreme 14, 2007.
Nov. *2 Sinclair, Firm,
Brаd A. Serkland Law N.D., Fargo, plaintiff appellee. for Santos-Hill, Lauderdale, Edgar G. Fort FL, pro se.
SANDSTROM, Justice. Edgar a appeals dis- trict court judgment finding him personal- ly responsible Corporation’s $63,500 judgment against Calima Finan- cial, affirm, LLC. concluding We thе dis- trict court acted in piercing the corporate veil.
I Santos-Hill, resident, a Florida Financial, LLC, formed Calima April 2004 in the state of Utah. Calima was payday lending, business of San- only tos-Hill was the member listed articles of organization. Intercеpt, corporation, North Dakota is in busi- electronically ness of transferring funds for its clients. In June Intercept by telephone, seeking contacted to utilize its services. as vice summary judgment, Calima, tercept’s motion for completеd applica- an president Intercept. complaint, claiming In its and to dismiss the with tion to do business average stated the sin- and thus not employee application, July would be gle transaction liable for the debt. The district $300. *3 2004, Intercept еntered into a and granted summary judgment against Calima court electronically Intercept contract to have and Calima Santos-Hill. started funds for Calima. Calima transfer moved to vacate the Santos-Hill [¶ 6] $7,000 $25,000 of that capital, and
with against him. summary judgment entered security deposit with Inter- used as a was motion, hearing After a the court began their relation- when the entities cept the under N.D.R.Civ.P. vacated con- capital was ever ship. No additional 60(b)(vi) it found as to Santos-Hill becаuse tributed. of material fact genuine there were issues agreement, parties’ Under the [¶ 3] to what Santos-Hill’s role was with as to request Intercept would Santos-Hill simply than an officer of Calima other as to from Calima’s account transfer funds court concluded the company. the clients, payments and then when Calima’s corporate of the veil could issue clients, Intercept due from Calima’s were law, as a matter of and decided from clients would transfer funds Calima’s Intercept would have the burden at trial of account. Calima warranted to Calima’s establishing necessary the elements to funds it agreement under the the veil. pierce the transfer from Cali- requested Intercept to trial, sought Prior to Santos-Hill сlients were ma’s account to Calima’s answer, asserting the district to amend his account. The existing funds Calima’s personal jurisdiction. He court lacked the funds trans- agreement also stated require- unaware of the claimed was by Intercept “cannot exceed the ferred un- pleading ment of affirmative defenses and agreed Intercept amount to between law. The court denied der North Dakota agreement Company the [Calima].” motion, concluding made a Sаntos-Hill Dakota law. governed by to be North fil- voluntary appearance the action 21, 2004, From December to De- [¶ 4] without ing an answer and other motions 2004, 24, electronic fund cember a series of raising personal jurisdiction. lack of re- by Intercept were performed transfers August A trial held in bench [¶ 8] of non-sufficient funds turned because opinion and its memorandum account. The amount of the Calima’s trial, following the court found Santos-Hill $63,500, which was dis- transfers totaled an officer of aсting simply was not as $40,000 to Costeño tributed as follows: he had obtained The court found Inc., $16,000 to Contracting, $63,500 benefit. There- for his own $7,500 Delys St. Hill. Santos-Hill and fore, veil of pierced payday claimed the transactions were and concluded Santos-Hill Cаlima loans to clients. $63,500 judgment personally liable for the 2005, Intercept In March sued [¶ 5] against Calima. individually for and Santos-Hill subject court had contract, The district seeking [¶ 9] of a return of breach Const, answered, jurisdiction under N.D. art. $63,500. he matter alleging VI, 8, § 27-05-06. San- § and N.D.C.C. responsible for the was not timely under appeal is summary tos-Hill’s debt. then moved 4(a). juris- has This Court deny N.D.R.App.P. In- judgment. Santos-Hill moved Const, VI, §§ diction N.D. art. III under § N.D.C.C. 28-27-01. argues 12] Santos-Hill he was Calima, an of employee and not a member
II company, as the distriсt court found. appeal, On A fact finding subject district court’s is district court lacked argues the clearly to the standard erroneous of re jurisdiction individually. him A over dis 52(a). view. A finding N.D.R.Civ.P. acquires personal trict court fact erroneous under Rowley over a under N.D.R.Civ.P. 4. party 52(a) N.D.R.Civ.P. if it is induced ¶ 9, Cleaver, 598 N.W.2d law, if view of the no erroneous 4(b)(4), N.D.R.Civ.P. a court Under *4 support finding, if, exists to or jurisdiction may acquire personal over a record, is entire this Court left with a party if the makes a volun non-resident firm definite and a conviction mistake has tary general appearance and fails to assert ¶ D.M., 62, 6, been made. re 2007 ND personal jurisdiction. Id. lack of The 730 N.W.2d “appearance” broadly is concept of de 13] Santos-Hill formed Calima fined, and it includes an assortment of acts April produced 2004. He documents respond a that to the com defendant showing had ownership he transferred of plaint sufficiently give plaintiff no Munoz, a to Cristina resident of tice of the defendant’s intention contеst Panama, shortly Hatch, after formed. the claim. Hatch v. 484 N.W.2d He also in a (N.D.1992). deposition testified Mu lack-of-personal- A 285 noz the owner. At the time of the jurisdiction defense is waived if it is nei transactions, however, December 2004 ther made motion nor included in a Santos-Hill was still as the owner listed responsive pleading. N.D.R.Civ.P. Utah, Calima in the 12(h)(1). State of where Calima ruling regard A district court’s was formed. There was also evidence that a ing personal question referred to Calima as law, “my fully appeal. which is reviewable on ¶ company” in an Herd, August 2004 e-mail he sent 217, 7, Bolinske v. 689 to Intercept allegedly after he transferred N.W.2d 397. ownership. Intercept was never informed individually of a transfer of ownership. district response filed an to Interсept’s answer court testimony found Santos-Hill’s He complaint. did not raise the lack-of- the documentary showing a answer, personal-jurisdiction defense his transfer of ownership were not credible. timely nor separate did he file a motion We conclude district court did not err personal jurisdiction alleging lack under in finding a Santos-Hill was member of 12(b). gave N.D.R.Civ.P. His answer In tercept sufficient notice of his intention to claim; therefore, contest the his answer IV voluntary a appeаrance constituted under 4(b)(4). argues N.D.R.Civ.P. Because Santos-Hill [¶ 14] Santos-Hill lack-of-jurisdic failed to raise the district erroneously per court found him defense, tion sonally Intercept’s waived the defense under liable 12(h)(1). Therefore, against N.D.R.Civ.P. we con Calima. He there can argues be personal juris clude the no personal liability district had for members of a lim diction liability over Santos-Hill. ited company. Under N.D.C.C. financial stating that member, statement 10-32-29(1), governor, man- “a § 6.9 million dollars a limited he had assets worth agent of ager, or other not, account of this worth 4.2 million dollars. merely on and liabilities company is acts, debts, for the status, liable personally 5. Financial information Santos liabilities, limited lia- of the obligations or false, and Santos submitted was owner of a A member or bility company.” it was false. knew liability company will be limited Hill submitted to 6. Santos however, if the conditions and responsible, from the State Incorporation Articles of under which circumstances of Utah.... under mаy pierced be corporation of a veil present. law are N.D.C.C. North Dakota Financial, LLC, never had a 7. Calima 10-32-29(3). § Utah, physical presence this by San- knowingly representation false may veil tos Hill. entity is used to legal when the pierced convenience, justify wrong, public defeat fraud, Jablonsky defend crime.
protect or in business 9. Calima Financial was (N.D. Klemm, 377 N.W.2d *5 2004. July of 2004 to December of from 1985). injustice, inequity element of “[A]n time, Santos Hill was the During this present must be unfairness or fundamental Financial. He was only owner of Calima may pierce the a court before charge in of the only also ... the one at The burden of corporate veil.” Id. 564. day-to-day operations of Calima.... necessary elements for establishing the 24th, to December From December 21st on the corporate the veil rests piercing Hill, individually, acted with Santos at 565. Re party asserting the claim. Id. Intercept to deceive fraudulent intent fact-specific heavily issue is solving the Intercept to transfer requesting therefore, and, the sound discre is within $111,500 of funds from Calima’s bank The court’s district court. Id. tion of the account, to in which Calima lacked funds presumed to be cor findings of fact are transfer, transferring the honor the and rect, appeal only on if and will be reversed Contract- nonexistent funds Costeño Habeck v. they clearly are erroneous. Hill, Delys ing, Edgar St[.] and Santo[s] (N.D. MacDonald, 520 N.W.2d Hill. 1994). $111,500 Hill that Santos 10. Of the numer- The district court made [¶ 16] day period from in that three requested the issuе of findings ous account, ... Costeño Contract- Calima’s in- findings the veil. Some of $40,000, Hill re- Delys St. ing received cluded: $7,500, Hill received ceived and Santos an appli- Financial submitted 3. Calima $48,000 $16,000. remaining of re- The the Intercept representing that cation to consummat- transfers were not quested corpo- for the person name and contact numbers, improper routing ed because President, Hill as ration was Santos Vice names were accounts or account bank Hill, and was Sаntos company the owner Hill. entered Santos pro- was in the business in which the aver- viding payday loans made to Costeño payments 11. The single transaction would age Hill Contracting Delys $300. and St. were ordinary course of in the process, payday loans application of the part 4. As Financial’s business. Intercept his Hill submitted to Santos $63,500 obtained any 12. the for testified he did Santos not own the assets. his own benefit. testified belonged He the assets to Cristi- Munoz, na the owner of Calima. Santos- of its the court findings, On the basis Hill testified Calima did not have sufficient concluded, “[allowing Santos Hill to hide in its requested funds account when he corporation behind the limited transfers December He testified justify wrong- would his Calima Financial gave permission Munoz him tо make the him his own protect ful acts and from advances, and she would refund the mon- fraudulent this transaction.” acts ey. money The never refunded. As finding that The district court’s above, the noted district did not find his own obtained funds for testimony regarding Santos-Hill’s Munoz benefit is evidence supported findings sup- credible. The court’s have Intercept record. submitted evidence record; therefore, in the port it we hold Inc., Contracting, showing Costeño was not for erroneous the court Delys merely Hill were not clients of St. pierce veil of Calima and Calima; rather, they were asso- responsible hold Santos-Hill personally ciated with Costeño was in- Santos-Hill. $63,500 against judgment corporated in the State of in June Florida president V The di- vice-prеsident St. Hill. corporation rectors of the were Santos- district court’s provided Hill and St. Hill. also affirmed. showing Santos-Hill and St.
shared the same address. tes- WALLE, 21] GERALD W. VANDE deposition purchased tified in his his C.J., *6 KAPSNER, CAROL RONNING Hill, house from St. and allowed her to MARING, JJ., MARY MUEHLEN using continue the address. cоncur. Intercept produced deeds show- CROTHERS, Justice, specially concur- ing a series of transfers of the real estate ring. on which the house was located. Santos- I agree the district [¶22] court had Hill property Hill deeded to St. on personal over defendants 12, March St. Hill transferred the liability and that the limited com 20, property on to Costeño March pany’s veil of limited owner property Costeño deeded on St. not I specially erroneous. concur 20, November 2001. St. Hill dеeded the emphasize in the latter holding to that the 21,
property to Costeño on back November ¶ Court’s discussion at 15 of this ease signed 2001. Santos-Hill Hill to St. should be read to make disregarding Costeño deeds as witness. Costeño then entity’s separate legal existence the land to transferred the Santos-Hill on De- rule, exception. rather than My con 2004, one day cember before series fully cerns are more explained Axtmann of returned transactions occurred. The ¶¶ Chillemi, 28-44. deed signed presi- St. as vice dent of Costeño. 23] Daniel J. Crothers
[¶ 19] The financial statement
submitted he Santos-Hill indicated had $6,925,000
assets worth and a worth net
$2,699,400. however, deposition, In his