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socrateaser, Attorney
Category: Business Law
Satisfied Customers: 39031
Experience:  Retired (mostly)
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Can you site specific Michigan Court Rulings as to ruling inDefendants

Customer Question

Can you site specific Michigan Court Rulings as to ruling inDefendant's favor in cases that a Plaintiff tied to personally sue a member (Defendant) of a Michigan LLC for a bill? What was the court findings?

Submitted: 8 years ago.
Category: Business Law
Expert:  socrateaser replied 8 years ago.

In Shepherd Montessori Center Milan v. Ann Arbor Charter Township, No. 272357 (Mich.App. 05/22/2007), the appellate court held:


"Piercing the corporate veil is an equitable principle that requires a finding that (1) a subsidiary is a mere instrumentality of the parent, (2) the subsidiary/parent distinction is used to commit a wrong or fraud, and (3) 'there must have been an unjust injury or loss to the plaintiff.'" {numbers added} Rymal v Baergen, 262 Mich App 274, 293-294; 686 NW2d 241 (2004).


A defendant's motion for summary judgment on the corporate "alter ego" issue would require that when viewed in the light most favorable to plaintiff, there is no genuine issue of fact in dispute on any one of the three above-described elements.


Since a plaintiff must prove a fraud by clear and convincing evidence, an attack on element #2 may be the most profitable. That is, if you can show that the failure to pay the bill was simply an artificact of the business failure, rather than an attempt to dupe the attorney into representing you, while knowing you would never pay the bill, then you don't even need to show that you are correct by a better than average probability. You just need credible evidence showing good faith in originating the attorney-client relationship on behalf of the LLC.


Hope this helps.


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