Opinion
Case No. 2:05-CV-48 TS.
August 15, 2005
ORDER GRANTING MOTION TO DISMISS BROUGHT BY DANIEL ANDERSON, GORDON LEWIS, AND SHERRY LEWIS-BROWN
Defendants Daniel Anderson, Gordon Lewis, and Sherry Lewis-Brown bring the instant Motion to Dismiss, arguing that Plaintiff's Complaint does not, as a matter of law, allege facts sufficient to pierce the corporate veil of the business entities which are also Defendants in this named action.
In considering a motion to dismiss under Rule 12(b)(6), all well-pleaded factual allegations in the Complaint are accepted as true and viewed in the light most favorable to Plaintiff as the nonmoving party. In resolving a 12(b)(6) motion, a court may not consider matters outside the pleadings. "A 12(b)(6) motion should not be granted `unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997) (quotingConley v. Gibson, 355 U.S. 41, 45-46 (1957)).
Defendants' Motion to Dismiss is premised on the argument that Plaintiff's Complaint fails to adequately allege facts that would warrant the piercing of Defendant Monarch International Holdings, Inc.'s corporate form.
For the court to disregard the corporate form, as requested by the [Plaintiff], [its] complaint must plead a concurrence of two circumstances: (1) there must be such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist, viz., the corporation is, in fact, the alter ego of one or a few individuals; and (2) the observance of the corporate form would sanction a fraud, promote injustice, or an inequitable result would follow.Salazar v. Thrifty Nickel Inc., 2002 WL 362693 (Utah Ct.App. 2003) (citing Norman v. Murray First Thrift Loan Co., 596 P.2d 1028, 1030 (Utah 1979)).
Plaintiff argues that the allegations found in the Complaint are sufficient for the Court to disregard the corporate form. The Court pays particular attention to those actions attributed to the defendants acting in their individual capacities and those attributed to their corporate agent/employee capacities:
5. Defendant Daniel Anderson is a natural person, . . . who is a Principal of Monarch International Holdings, Inc., which is a Principal of GearJockey.com, Inc., and Defendant Anderson has been involved in the business dealings which are the basis for this action, has held himself out to have authority to make binding decisions on behalf of both business entities listed as Defendants.
6. Defendant Gordon C. Lewis is a natural person, . . . who was, at the time of the below-stated causes of action, a stated "Partner" and/or "part owner" of Defendant GearJockey.
7. Sherry Lewis Brown . . . is a natural person . . ., who has held herself out as being a Principal of Defendant GearJockey.com, authorized to make binding decisions for said business entity, and she was involved through-out the dealings between the parties and from which the actions contained herein have arisen.
* * *
14. . . . Defendant Dan Anderson, Agent and Representative of Defendants, contacted Plaintiff, and on behalf of Defendants, sought information regarding website and/or PHP database problems. [Further details of this meeting is found in Paragraphs 15-17, and at no time does the Complaint deviate from the notion that Defendant Anderson was acting on behalf of the corporate entities.]
18. During this initial meeting, an oral agreement was reached between Plaintiff and Defendant Anderson, on behalf of Monarch, and on behalf of GearJockey. . . . [The remainder of this Paragraph and Paragraph 19 further describes the agreement reached.]
20. The parties present at this meeting were . . . Dan Anderson, a secondary principal and/or agent for Monarch and GearJockey . . . [and] Gordon C. Lewis . . ., who, at that time, [was] part of the "IT" team for Monarch and GearJockey. [Details of the meeting are further provided in Paragraphs 21-24.]
* * *
51. On Friday, December 3, 2004, with Defendant Gordon Lewis present at Plaintiff's offices, Defendant Dale Jones called Plaintiff. . . .
* * *
59. On December 8, 2004, Defendants' Sherry Lewis Brown and Gordon Lewis, on behalf of Defendants, came to Plaintiff's offices, and at that time, Defendant Sherry Lewis Brown represented she was the CEO of GearJockey, and therefore, under that representation, she signed the Software License Agreement . . .
60. As such, Sherry Lewis Brown, having held herself out to be an authorized agent as well as the CEO of GearJockey.com, and having signed said Agreement on behalf of Defendants, accepted delivery of the project. . . .
* * *
62. . . . . Plaintiff expressed to Defendants that if they could get this paid before Christmas Plaintiff would be appreciative.
63. Defendant Sherry Lewis Brown, in response to Plaintiff's request, stated to Plaintiff to [sic] "not to worry," and that "it would be no problem for Defendants to get Plaintiff paid before Christmas."
* * *
83. . . . Plaintiff contacted Dan Anderson regarding payment and the server, to which Dan expressly stated "we have scrubbed the project because it wasn't making any money, and had shut down the website as a result."
84. Plaintiff then inquired what Defendant wanted Plaintiff to do, asking if they wanted Plaintiff to wipe the server clean, to which Dan stated "go ahead." In regard to Plaintiff's inquiry about payment for its services, Dan stated he had an agreement with Plaintiff that Defendants would only have to pay Plaintiff it [sic] Defendants made money on the website, which was a misrepresentation. . . .
85. Defendants further stated that since the website hadn't made any money, they weren't going to pay Plaintiff.
* * *
While the Complaint names Daniel Anderson, Gordon Lewis, and Sherry Lewis-Brown, individually, by the terms of the Complaint, these individual Defendants were at all times acting as either officers and/or employees of either Monarch, or its wholly owned subsidiary, GearJockey. Given that there is no allegation that the named corporate structures were operated as sham entities or that it would somehow result in an injustice if the Court were to respect the corporate form, the Court will, therefore, grant the Motion to Dismiss.
CONCLUSION
For the foregoing reasons, it is hereby
ORDERED that Motion to Dismiss [Docket # 57] is GRANTED.
SO ORDERED.