Cruttenden v. Mantura
| Decision Date | 18 February 1982 |
| Docket Number | No. 13539,13539 |
| Citation | 1982 NMSC 21,640 P.2d 932,97 N.M. 432 |
| Parties | Myra CRUTTENDEN, Plaintiff-Appellee, v. George MANTURA, Defendant-Appellee, v. MARRIOTT CORPORATION, Defendant-Garnishee-Appellant. |
| Court | New Mexico Supreme Court |
In 1968, plaintiff Myra Cruttenden (Cruttenden) loaned to the defendant George Mantura (Mantura), $8,400.00 at twelve percent interest (12%), payments to begin in 1972. In 1976, Cruttenden brought suit for collection of the unpaid note executed by Mantura. Judgment was entered in her favor. This appeal arises out of Cruttenden's service of a writ of garnishment on Marriott Corporation in an attempt to collect the judgment.
Mantura was originally employed by the defendant-garnishee Marriott Corporation in 1978 to work for the Saudi Hotel and Resort Area Company (SHARACO), a Saudi Arabian company, as Director of Services of the Marriott Khurais International Hotel, located in Saudi Arabia. 1 On January 2, 1979, Marriott Corporation assigned all agreements between Marriott Corporation and SHARACO to Marriott International Corporation, a wholly owned subsidiary of Marriott Corporation that was organized by Marriott Corporation for the purpose of conducting all overseas activities.
On January 24, 1979, Cruttenden served a writ of garnishment on the Marriott Corporation. 2 After a hearing on the answer and motions, a judgment was entered in favor of Cruttenden against Marriott Corporation and the court ordered Marriott Corporation to pay attorneys' fees and costs. Marriott Corporation appeals. We reverse.
Marriott Corporation contends that Mantura does not work for them and that they have no control over his wages. Marriott Corporation alleges that SHARACO controls Mantura's wages. Cruttenden contends that Mantura, in reality, works for Marriott Corporation because Marriott International Corporation is the alter ego of Marriott Corporation and because under the management contract with SHARACO the Marriott Corporation has control over Mantura's wages.
The trial court found that Marriott International Corporation is a wholly owned subsidiary of Marriott Corporation and that it is under Marriott Corporation's sole and direct control. The trial court also held that Marriott International Corporation is indivisible from and identical to Marriott Corporation and therefore is the alter ego of Marriott Corporation. Thus, by serving Marriott Corporation, the trial court concluded that it had jurisdiction to hear the case and enter a judgment against Marriott Corporation.
On appeal, Marriott Corporation contends that there is no evidence to support the findings that led to the conclusion that Marriott International Corporation is the alter ego of Marriott Corporation. We have reviewed the entire record and agree that the evidence does not support the trial court's findings. "Findings not supported by substantial evidence, and which have been properly attacked, cannot be sustained on appeal * * *." Getz v. Equitable Life Assur. Soc. of U. S., 90 N.M. 195, 199, 561 P.2d 468, 472, cert. denied, 434 U.S. 834, 98 S.Ct. 121, 54 L.Ed.2d 95 (1977). The trial court's findings that led to the conclusion that Marriott International Corporation is the alter ego of Marriott Corporation is not supported by substantial evidence or by inferences in the record. Barber's Super Markets, Inc. v. Stryker, 84 N.M. 181, 500 P.2d 1304 (Ct.App.), cert. denied, 84 N.M. 180, 500 P.2d 1303 (1972).
A subsidiary and its parent corporation are viewed as independent corporations. Intern. U., United Auto., Etc. v. Cardwell MFG. Co., 416 F.Supp. 1267 (D.Kan.1976). If sufficient separateness between a parent corporation and a subsidiary is maintained, service on the parent corporation does not subject the subsidiary corporation to local jurisdiction. See State v. MacPherson, 62 N.M. 308, 309 P.2d 981, cert. denied, 355 U.S. 825, 78 S.Ct. 32, 2 L.Ed.2d 39 (1957).
To find that a subsidiary is the alter ego of the parent corporation, it must be established that the parent control is so complete as to render the subsidiary an instrumentality of the parent. Edgar v. Fred Jones Lincoln-Mercury, Etc., 524 F.2d 162, 166 (10th Cir. 1975). Some guidelines to be followed in determining if the alter ego theory is appropriate are, whether:
'(1) The parent corporation owns all or majority of the capital stock of the subsidiary.
(2) The parent and subsidiary corporations have common directors or officers.
(3) The parent corporation finances the subsidiary.
(4) The parent...
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