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King v. McHugh

2009 Mont. Dist. LEXIS 469 (2009)

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King v. McHugh

Montana First Judicial District Court
2009 Mont. Dist. LEXIS 469 (2009)

DH

Facts

Ed McHugh (defendant) was the majority owner of McHugh Mobile Home Park Partnership, LLC (the partnership), which refurbished mobile homes for lease or resale. McHugh and his wife subsequently formed Cloverleaf Systems, Inc. (the corporation). The corporation had no other officers or employees, and McHugh was its sole shareholder. The corporation did not hold annual meetings, maintain a separate checking account from the partnership, keep tax and business records, or file corporate tax returns. McHugh used the corporation only once to purchase a mobile home (the subject mobile home). In 2003, the secretary of state dissolved the corporation for failure to file its annual report. Thereafter, McHugh, through the corporation, sold the subject mobile home to the Kings (plaintiffs). The Kings wrote two checks for the purchase, one to McHugh and one to the corporation. Considering the corporation had no assets, the Kings later sued McHugh for alleged misrepresentations regarding the condition of the subject mobile home. The Kings moved for partial summary judgment as to whether the court would pierce the corporate veil and disregard the corporation to hold McHugh personally liable. In response, McHugh contended that the corporation was not used deceivingly to perpetuate a wrong or fraud.

Rule of Law

Issue

Holding and Reasoning (McCarter, J.)

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