Greenhunter Energy, Inc. v. W. Ecosystems Tech, Inc.

337 P.3d 454 (2014)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

P and the LLC entered into a contract whereby P undertook to provide the LLC consulting services related to the potential development of a wind turbine farm. P performed, and the LLC paid nothing. P brought a breach of contract action against the LLC and obtained a judgment in the amount of $43,646.10. P could not collect on its judgments against the LLC. P then sued D, the sole member of the LLC, seeking to pierce the LLC's veil and hold D liable. P argued that D was the LLC's alter ego and presented evidence, much of it uncontroverted. P showed that the LLC consistently carried an operating capital balance which was insufficient to cover its debts, and on numerous occasions, its account had a balance of zero. D also decided when and how much money to advance to the LLC to allow it to pay its accounts payable. D also decided which of the LLC's creditors would be paid. D did advance funds to permit the LLC to pay some creditors, but it did not transfer any funds to allow the LLC to pay P. P showed that the LLC did not have employees of its own, and that employees of D performed services for and on behalf of the LLC, including negotiation of wind farm leases and other agreements. The LLC's chairman and general counsel held the same positions with D. D, and the LLC have the same business address. All bookkeeping and financial management of the LLC were performed by employees of D, including maintenance of accounts receivable and accounts payable for the LLC. The tax returns of the LLC were consolidated with those of D because the LLC had only a single member. D was able to deduct $884,092.00 in expenses and claim a loss of $61,047.00 for the LLC's activities. The court found in favor of P. D appealed.