PIERCING THE CORPORATE VEIL - HEISZ V. GALT INDUSTRIES, INC.
In Heisz v. Galt Industries, Inc., [Ms. 1100193, Jan. 6, 2012] __ So. 3d __(Ala. 2012), the Supreme Court of Alabama reversed a judgment on a jury verdict awarding the plaintiffs $824,255. This case arose out of the plaintiffs' asset purchase agreement with defendants and the defendants subsequent failure to fulfill certain terms of the asset purchase agreement. The sellers filed suit against the purchaser (SPC - Alabama), its corporate stockholder (Aegis), and the individual who owned all of Aegis's stock (Heisz), and others, for breach of contract and fraud. The jury returned a verdict for Plaintiffs. After post-trial motions, the trial court entered a judgment against Aegis, Heisz, and the other defendants. Only Aegis and Heisz appealed. The Court ruled that the fraud claim was for promissory fraud and held that there was insufficient evidence of a present intent not to perform the promise. The judgment against Aegis and Heisz on the breach-of-contract claim required piercing the corporate veil of SPC-Alabama. The Court held that this is an equitable issue for the trial court and applied the ore tenus standard of review. Nevertheless, it found insufficient evidence of misuse by Heisz of his control over SPC-Alabama. The Court reversed the judgment as to Aegis and Heisz.