Belvedere test in Ohio

2021Evidence that a corporation and an individual are alter egos of each other alone is insufficient to pierce the corporate veil; “all three prongs of the Belvedere test must be met for the court to pierce the corporate veil.” My Father’s House #1, Inc. v. McCardle, 2013-Ohio-420 , 986 N.E.2d 1081 , ¶ 29 (3d Dist.) (finding that the trial court erred in piercing the corporate veil based on the alter ego doctrine alone without “any evidence regarding the remaining two prongs of the Belvedere test”).

2021Evidence that a corporation and an individual are alter egos of each other alone is insufficient to pierce the corporate veil; “all three prongs of the Belvedere test must be met for the court to pierce the corporate veil.” My Father’s House #1, Inc. v. McCardle, 2013-Ohio-420 , 986 N.E.2d 1081 , ¶ 29 (3d Dist.) (finding that the trial court erred in piercing the corporate veil based on the alter ego doctrine alone without “any evidence regarding the remaining two prongs of the Belvedere test”).

2016To pierce the corporate veil and impose personal liability on a shareholder, the burden is on the party seeking to pierce the corporate veil to prove, by a preponderance of the evidence that: {¶17} “(1) control over the corporation by those to be held liable was so complete that the corporation has no separate mind, will, or existence of its own, (2) control over the corporation by those to be held liable was exercised in such a manner as to commit fraud or an illegal act against the person seeking to disregard the corporate entity, and (3) injury or unjust loss resulted to the plaintiff from

2016To pierce the corporate veil and impose personal liability on a shareholder, the burden is on the party seeking to pierce the corporate veil to prove, by a preponderance of the evidence that: {¶17} “(1) control over the corporation by those to be held liable was so complete that the corporation has no separate mind, will, or existence of its own, (2) control over the corporation by those to be held liable was exercised in such a manner as to commit fraud or an illegal act against the person seeking to disregard the corporate entity, and (3) injury or unjust loss resulted to the plaintiff from

2009Id., citing Dombroski, 2007-Ohio-5054, at ¶33 . {¶37} The Ohio Supreme Court in Dombroski noted that the Seventh District was one of several appellate districts, including our own, which interpreted the second prong of the Belvedere test to include “unjust” or “inequitable acts.” 2008-Ohio-4827 , at ¶21, citing Stypula v. Chandler, 11th Dist.

2009Id., citing Dombroski, 2007-Ohio-5054, at ¶33 . {¶37} The Ohio Supreme Court in Dombroski noted that the Seventh District was one of several appellate districts, including our own, which interpreted the second prong of the Belvedere test to include “unjust” or “inequitable acts.” 2008-Ohio-4827 , at ¶21, citing Stypula v. Chandler, 11th Dist.

2004Id. at 289 . {¶ 26} Whether the three parts of the Belvedere test are satisfied is primarily a question for the trier of fact, and on review we examine the record for competent, credible evidence to support the decision of the trial court.

2004Id. at 289 . {¶ 26} Whether the three parts of the Belvedere test are satisfied is primarily a question for the trier of fact, and on review we examine the record for competent, credible evidence to support the decision of the trial court.

1997The complete syllabus of In re M.D. (1988), 38 Ohio St.3d 149 , 527 N.E.2d 286 , reads: “The waiver doctrine in State v. Awan (1986), 22 Ohio St.3d 120 , 22 OBR 199, 489 N.E.2d 277 , is discretionary.

1997The complete syllabus of In re M.D. (1988), 38 Ohio St.3d 149 , 527 N.E.2d 286 , reads: “The waiver doctrine in State v. Awan (1986), 22 Ohio St.3d 120 , 22 OBR 199, 489 N.E.2d 277 , is discretionary.

1997The complete syllabus of In re M.D. (1988), 38 Ohio St.3d 149 , 527 N.E.2d 286 , reads: “The waiver doctrine in State v. Awan (1986), 22 Ohio St.3d 120 , 22 OBR 199, 489 N.E.2d 277 , is discretionary.

1997The complete syllabus of In re M.D. (1988), 38 Ohio St.3d 149 , 527 N.E.2d 286 , reads: “The waiver doctrine in State v. Awan (1986), 22 Ohio St.3d 120 , 22 OBR 199, 489 N.E.2d 277 , is discretionary.

2021Cuyahoga No. 83496, 2004-Ohio-3613, ¶ 24 , citing Belvedere.

2021Cuyahoga No. 83496, 2004-Ohio-3613, ¶ 24 , citing Belvedere.

2021Corp. v. Clevenger, 180 Ohio App.3d 211 , 2008-Ohio- 6823, 904 N.E.2d 941 (10th Dist.).

2021Corp. v. Clevenger, 180 Ohio App.3d 211 , 2008-Ohio- 6823, 904 N.E.2d 941 (10th Dist.).

2019No. 17AP-155 11 {¶ 31} In Dombroski, the Supreme Court of Ohio modified the second prong of the Belvedere test and determined that: "To fulfill the second prong of the Belvedere test for piercing the corporate veil, the plaintiff must demonstrate that the defendant shareholder exercised control over the corporation in such a manner as to commit fraud, an illegal act, or a similarly unlawful act." Id. at syllabus. {¶ 32} Appellant failed to allege a sufficient factual content that permits a reasonable inference that the corporate veil should be pierced and he did not address any of the elements

2019No. 17AP-155 11 {¶ 31} In Dombroski, the Supreme Court of Ohio modified the second prong of the Belvedere test and determined that: "To fulfill the second prong of the Belvedere test for piercing the corporate veil, the plaintiff must demonstrate that the defendant shareholder exercised control over the corporation in such a manner as to commit fraud, an illegal act, or a similarly unlawful act." Id. at syllabus. {¶ 32} Appellant failed to allege a sufficient factual content that permits a reasonable inference that the corporate veil should be pierced and he did not address any of the elements

2019Snapp v. Castlebrook Builders, Inc., 2014-Ohio-163 , 7 N.E.3d 574 , ¶ 74 (3d Dist.). {¶19} “This test focuses on the extent of the shareholder’s control of the corporation and whether the shareholder misused the control so as to commit specific egregious acts that injured the plaintiff.” Dombroski at ¶ 18 .

2019Snapp v. Castlebrook Builders, Inc., 2014-Ohio-163 , 7 N.E.3d 574 , ¶ 74 (3d Dist.). {¶19} “This test focuses on the extent of the shareholder’s control of the corporation and whether the shareholder misused the control so as to commit specific egregious acts that injured the plaintiff.” Dombroski at ¶ 18 .

2017Co., Inc. , 2013-Ohio-2348 , 992 N.E.2d 1194 (2d Dist.), this court addressed the first prong of the Belvedere test: In determining whether a corporation is an individual's alter ego, Ohio appellate courts consider various factors, such as (1) whether corporate formalities were observed, (2) whether corporate records were kept, (3) whether corporate funds were commingled with personal funds, (4) whether corporate property was used for a personal purpose, and (5) gross undercapitalization.

2017Co., Inc. , 2013-Ohio-2348 , 992 N.E.2d 1194 (2d Dist.), this court addressed the first prong of the Belvedere test: In determining whether a corporation is an individual's alter ego, Ohio appellate courts consider various factors, such as (1) whether corporate formalities were observed, (2) whether corporate records were kept, (3) whether corporate funds were commingled with personal funds, (4) whether corporate property was used for a personal purpose, and (5) gross undercapitalization.

2016Portage No. 2005-P-0101, 2006-Ohio-4172, ¶36 . {¶27} With respect to the third prong of the Belvedere test, the trial court stated the following in its November 20, 2015 and February 1, 2016 judgment entries: {¶28} “[J]udgment is proper against [Wright]. * * * [J]udgment is proper against Storm. * * * Farmwald is not entitled to corporate immunity. * * * Farmwald should be held personally liable for the plaintiffs’ injuries. * * * Alpha Protection * * * was not in existence at the time of the incident at issue in this case.

2016Portage No. 2005-P-0101, 2006-Ohio-4172, ¶36 . {¶27} With respect to the third prong of the Belvedere test, the trial court stated the following in its November 20, 2015 and February 1, 2016 judgment entries: {¶28} “[J]udgment is proper against [Wright]. * * * [J]udgment is proper against Storm. * * * Farmwald is not entitled to corporate immunity. * * * Farmwald should be held personally liable for the plaintiffs’ injuries. * * * Alpha Protection * * * was not in existence at the time of the incident at issue in this case.

2014Therefore, there was evidence “of substantive probative value” that Kappeler’s control over Castlebrook was so complete that Castlebrook had “no separate mind, will, or existence of its own.” See Goodyear, 2002-Ohio-2842, at ¶ 3 ; Belvedere, 67 Ohio St.3d 274 at paragraph three of the syllabus. -42- Case No. 17-12-22 {¶81} As to the second part of the Belvedere standard, Snapp argued that Kappeler used his control over Castlebrook to commit fraud, which is one of the acts for which the corporate veil can be pierced.

2014Therefore, there was evidence “of substantive probative value” that Kappeler’s control over Castlebrook was so complete that Castlebrook had “no separate mind, will, or existence of its own.” See Goodyear, 2002-Ohio-2842, at ¶ 3 ; Belvedere, 67 Ohio St.3d 274 at paragraph three of the syllabus. -42- Case No. 17-12-22 {¶81} As to the second part of the Belvedere standard, Snapp argued that Kappeler used his control over Castlebrook to commit fraud, which is one of the acts for which the corporate veil can be pierced.

2014Morris Co. v. Foley Const. Co., 54 Ohio St.2d 279 , 376 N.E.2d 578 (1978), at syllabus (“Judgments supported by some competent, credible evidence going to all the essential elements of the case will not be reversed by a reviewing court as being against the manifest weight of the evidence.”). {¶86} As discussed in the previous section of this opinion, Snapp provided evidence in support of each of the elements of the Belvedere test.

2014Morris Co. v. Foley Const. Co., 54 Ohio St.2d 279 , 376 N.E.2d 578 (1978), at syllabus (“Judgments supported by some competent, credible evidence going to all the essential elements of the case will not be reversed by a reviewing court as being against the manifest weight of the evidence.”). {¶86} As discussed in the previous section of this opinion, Snapp provided evidence in support of each of the elements of the Belvedere test.

2014Among other things, they argue that the jury pierced the veil relying on an improper standard -44- Case No. 17-12-22 discussed by Snapp’s counsel in his closing statement, requiring only “a finding that the corporation is an alter ego of the individual.” (App’t Br. at 17, quoting Tr. at 1175.) Nevertheless, the record discloses that the jury instructions read into the record by the trial judge, as well as the jury interrogatories, included the proper three-prong Belvedere standard.4 (See Tr. at 1240; R. at 246.) {¶85} The “‘manifest weight of the evidence’ refers to a greater amount of credibl

2014Among other things, they argue that the jury pierced the veil relying on an improper standard -44- Case No. 17-12-22 discussed by Snapp’s counsel in his closing statement, requiring only “a finding that the corporation is an alter ego of the individual.” (App’t Br. at 17, quoting Tr. at 1175.) Nevertheless, the record discloses that the jury instructions read into the record by the trial judge, as well as the jury interrogatories, included the proper three-prong Belvedere standard.4 (See Tr. at 1240; R. at 246.) {¶85} The “‘manifest weight of the evidence’ refers to a greater amount of credibl

2013No. 11AP060025, 2012-Ohio-855, ¶ 19 . {¶28} The first prong of the Belvedere test is essentially the “alter ego doctrine.” Pottschmidt v. Thomas J.

2013No. 11AP060025, 2012-Ohio-855, ¶ 19 . {¶28} The first prong of the Belvedere test is essentially the “alter ego doctrine.” Pottschmidt v. Thomas J.

2012No. 9-08-67, 2009-Ohio-2816, ¶42 . {¶59} In considering the general elements for fraud as they relate to the second prong of the Belvedere standard, this court has expressly concluded that the decision to pierce the corporate veil cannot be based solely upon the failure to comply with a term of a contract: {¶60} “A simple breach of contract, in the absence of a more substantial factual predicate indicative of some corporate malfeasance, with direct bearing on the plaintiff’s injury, is insufficient to meet the second prong of the Belvedere test.

2012No. 9-08-67, 2009-Ohio-2816, ¶42 . {¶59} In considering the general elements for fraud as they relate to the second prong of the Belvedere standard, this court has expressly concluded that the decision to pierce the corporate veil cannot be based solely upon the failure to comply with a term of a contract: {¶60} “A simple breach of contract, in the absence of a more substantial factual predicate indicative of some corporate malfeasance, with direct bearing on the plaintiff’s injury, is insufficient to meet the second prong of the Belvedere test.

2008When an appellant makes a contradictory argument on appeal, it has more than just "silently misled" the trial court into the commission of error; instead, it has affirmatively invited the error it complains of on appeal. "`It is the well-settled rule that a party will not be permitted to take advantage of an error which he himself invited or induced the trial court to make.'" Fostoria v. Ohio Patrolman's Benevolent Assn. , 106 Ohio St.3d 194 , 2005-Ohio-4558 , at ¶ 12 , modified on other grounds, 107 Ohio St.3d 1426 , quoting Lester v. Leuck (1943), 142 Ohio St. 91 , 92 . {¶ 19} Because Alwatt

2008When an appellant makes a contradictory argument on appeal, it has more than just "silently misled" the trial court into the commission of error; instead, it has affirmatively invited the error it complains of on appeal. "`It is the well-settled rule that a party will not be permitted to take advantage of an error which he himself invited or induced the trial court to make.'" Fostoria v. Ohio Patrolman's Benevolent Assn. , 106 Ohio St.3d 194 , 2005-Ohio-4558 , at ¶ 12 , modified on other grounds, 107 Ohio St.3d 1426 , quoting Lester v. Leuck (1943), 142 Ohio St. 91 , 92 . {¶ 19} Because Alwatt

2008When an appellant makes a contradictory argument on appeal, it has more than just "silently misled" the trial court into the commission of error; instead, it has affirmatively invited the error it complains of on appeal. "`It is the well-settled rule that a party will not be permitted to take advantage of an error which he himself invited or induced the trial court to make.'" Fostoria v. Ohio Patrolman's Benevolent Assn. , 106 Ohio St.3d 194 , 2005-Ohio-4558 , at ¶ 12 , modified on other grounds, 107 Ohio St.3d 1426 , quoting Lester v. Leuck (1943), 142 Ohio St. 91 , 92 . {¶ 19} Because Alwatt

2008When an appellant makes a contradictory argument on appeal, it has more than just "silently misled" the trial court into the commission of error; instead, it has affirmatively invited the error it complains of on appeal. "`It is the well-settled rule that a party will not be permitted to take advantage of an error which he himself invited or induced the trial court to make.'" Fostoria v. Ohio Patrolman's Benevolent Assn. , 106 Ohio St.3d 194 , 2005-Ohio-4558 , at ¶ 12 , modified on other grounds, 107 Ohio St.3d 1426 , quoting Lester v. Leuck (1943), 142 Ohio St. 91 , 92 . {¶ 19} Because Alwatt