Dieter Engineering Services, Inc. v. Parkland Development, Inc.

• Citation: 483 S.E.2d 48,199 W.Va. 48
• Decision Date: 16 December 1996
• Docket Number: No. 23330,23330
• Court: Supreme Court of West Virginia
• Parties: DIETER ENGINEERING SERVICES, INC., a Florida Corporation, Plaintiff Below, Appellee, v. PARKLAND DEVELOPMENT, INC., William Abruzzino, Rebecca Abruzzino, Center Designs, Inc., and Plaza Management, Inc., Defendants Below, Appellants.

Page 48

483 S.E.2d 48

199 W.Va. 48

DIETER ENGINEERING SERVICES, INC., a Florida Corporation Plaintiff Below, Appellee, v. PARKLAND DEVELOPMENT, INC., William Abruzzino, Rebecca Abruzzino, Center Designs, Inc., and Plaza Management, Inc., Defendants Below, Appellants.

No. 23330.

Supreme Court of Appeals of West Virginia.

Submitted Sept. 25, 1996.

Decided Dec. 16, 1996.

Syllabus by the Court

1. "Where the issue on an appeal from the circuit court is clearly a question of law or involving an interpretation of a statute, we apply a de novo standard of review." Syl. pt. 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995).

2. " ' " 'The primary object in construing a statute is to ascertain and give effect to the intent of the legislature.' Syl. Pt. 1, Smith v. State Workmen's Compensation Comm., 159 W.Va. 108, 219 S.E.2d 361 (1975)." Syl. Pt. 2, State ex rel. Fetters v. Hott, 173 W.Va. 502, 318 S.E.2d 446 (1984).' Syllabus point 2, Lee v. West Virginia Teachers Retirement Board, 186 W.Va. 441, 413 S.E.2d 96 (1991)." Syl. pt. 2, Francis O. Day Co., Inc. v. Director, Division of Environmental Protection, 191 W.Va. 134, 443 S.E.2d 602 (1994).

3. Pursuant to W. Va.Code, 31-1-66 [1974] which states, in relevant part, that "[n]o foreign corporation which is conducting affairs or doing or transacting business in this State without a certificate of authority shall be permitted to maintain any action or proceeding in any court of this State until such corporation shall have obtained a certificate of authority[,]" such corporation may maintain an action or proceeding in any court in this State when the corporation obtains a certificate of authority even though the corporation did not have the certificate at the time it instituted the action or proceeding.

4. "A circuit court's entry of summary judgment is reviewed de novo." Syl. pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).

5. " ' "A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law." Syllabus Point 3, Aetna Casualty & Surety Co. v. Federal Insurance Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963).' Syllabus Point 1, Andrick v. Town of Buckhannon, 187 W.Va. 706, 421 S.E.2d 247 (1992)." Syl. pt. 2, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).

6. "Where a party has a contractual obligation, he, as the obligor, may not escape performance when the other party, the assignor, has assigned the contract right to a third party, the assignee, by pointing to some defect in the assignment, unless such defect renders the assignment void." Syl. pt. 4, Randolph v. The Koury Corp., 173 W.Va. 96, 312 S.E.2d 759 (1984).

7. "The appellate standard of review for the granting of a motion for a directed verdict pursuant to Rule 50 of the West Virginia Rules of Civil Procedure is de novo. On appeal, this court, after considering the evidence in the light most favorable to nonmovant party, will sustain the granting of directed verdict when only one reasonable conclusion as to the verdict can be reached. But if reasonable minds could differ as to the importance and sufficiency of the evidence, a circuit court's ruling granting a directed verdict will be reversed." Syl. pt. 3, Brannon v. Riffle, 197 W.Va. 97, 475 S.E.2d 97 (1996).

8. "The corporate entity may be disregarded in those situations where the corporate form is being used to perpetrate injustice, defeat public convenience, or justify wrongful or inequitable conduct." Syl. pt. 3, Mills v. USA Mobile Communications, Inc., 190 W.Va. 209, 438 S.E.2d 1 (1993).

9. "In a case involving an alleged breach of contract, to 'pierce the corporate veil' in order to hold the shareholder(s) actively participating in the operation of the business personally liable for such breach to the party who entered into the contract with the corporation, there is normally a two-prong test: (1) there must be such unity of interest and ownership that the separate personalities of the corporation and of the individual shareholder(s) no longer exist (a disregard of formalities requirement) and (2) an inequitable result would occur if the acts are treated as those of the corporation alone (a fairness requirement)." Syl. pt. 3, Laya v. Erin Homes, Inc., 177 W.Va. 343, 352 S.E.2d 93 (1986).

10. "Where objections were not shown to have been made in the trial court, and the matters concerned were not jurisdictional in character, such objections will not be considered on appeal." Syl. pt. 1, State Road Commission v. Ferguson, 148 W.Va. 742, 137 S.E.2d 206 (1964).

Gary E. Pullin, Cleek, Pullin, Knopf & Fowler, Charleston, for Appellants.

Peter G. Zurbuch, Busch & Talbott, L.C., Elkins, for Appellee.

McHUGH, Chief Justice:

The appellants, Parkland Development, Inc., William Abruzzino, Rebecca Abruzzino, Center Designs, Inc., and Plaza Management, Inc. appeal the July 24, 1995 order of the Circuit Court of Randolph County which denied their motion for entry of judgment notwithstanding the verdict, or in the alternative, motion for a new trial. The appellants filed these motions after the jury returned a verdict in favor of the appellee, Dieter Engineering Services, Inc. (hereinafter "Dieter Engineering"), in the amount of $94,367.27. The case before us originated when Dieter Engineering, as a successor in interest, filed a breach of contract action against the appellants in which it alleged that the appellants had entered into a contract with Choctaw Engineering, Inc. d/b/a JAS-Orlando (hereinafter "Choctaw Engineering") for engineering services to be performed in conjunction with the construction of a shopping center in Elkins, West Virginia and then failed to pay for the engineering services performed. For reasons explained below, we ¹ affirm the July 24, 1995 order of the circuit court.

I

Sometime in the late winter or spring of 1989 the appellant, Parkland Development, Inc. (hereinafter "Parkland") entered into a contract for civil engineering services with Choctaw Engineering to be performed in conjunction with the construction of the Valley Pointe Shopping Center in Elkins, West Virginia. At that time J. Stephen Dieter worked for and owned a partial interest in Choctaw Engineering. Moreover, he was the chief engineer who prepared the civil engineering plans for the Valley Pointe Shopping Center from Choctaw Engineering's offices in Orlando, Florida.

On June 30, 1990, Choctaw Engineering and J. Stephen Dieter entered into a transfer agreement whereby Dieter relinquished his interest in Choctaw Engineering. In return, Dieter received certain property and accounts, including the accounts receivable on the Valley Pointe Shopping Center project. Thereafter, J. Stephen Dieter continued working on the Valley Pointe Shopping Center project as Dieter Engineering.

On September 13, 1991, Dieter Engineering ceased working on the project because Parkland failed to make payment on outstanding invoices totaling $94,367.77. Dieter did not file a mechanic's lien because William Abruzzino, the chief executive officer (hereinafter "CEO") of Parkland, represented to him that the amount due would be paid when Abruzzino obtained additional financing. On December 26, 1991, after the limitations period expired in which the mechanic's lien must be filed and after Parkland failed to make payment on the outstanding invoices, Dieter Engineering filed an action for breach of contract in the Circuit Court of Randolph County.

Prior to trial the appellants filed a motion to dismiss the action pursuant to W. Va.Code, 31-1-66 [1974] on the basis that Dieter Engineering did not possess a certificate of authority issued by the secretary of state's office authorizing it to conduct business in West Virginia as is required by W. Va.Code, 31-1-49 [1979]. ² Neither Dieter Engineering nor Choctaw Engineering possessed a certificate of authority when performing the engineering services at the Valley Pointe Shopping Center. However, on the day of the hearing on appellants' motion to dismiss, a certificate of authority was faxed to Dieter Engineering. Based on the receipt of the certificate of authority, the circuit court denied the appellants' motion to dismiss.

At trial Dieter Engineering sought to prove that William and Rebecca Abruzzino, as shareholders of Parkland, Center Designs, Inc. and Plaza Management, Inc., were liable for Parkland's debts. Dieter Engineering also sought to prove that the successor corporations of Parkland, Center Designs, Inc. and Plaza Management, Inc., were liable for Parkland's debts. The circuit court at the close of the trial found that the corporate veils should be pierced and thus directed a verdict on the issue of shareholder liability and successor corporation liability in favor of Dieter Engineering.

On June 1, 1995, the jury returned a verdict for Dieter Engineering in the amount of $94,367.27. As noted above, the appellants appeal the circuit court's denial of their motion for entry of judgment notwithstanding the verdict, or in the alternative, motion for a new trial.

II

The appellants maintain that the circuit court erred by refusing to dismiss the complaint pursuant to W. Va.Code, 31-1-66 [1974] on the basis that Dieter Engineering had not obtained a certificate of authority when the complaint was filed. W. Va.Code, 31-1-66 [1974] states, in relevant part:

No foreign corporation which is conducting affairs or doing or transacting business in this State without a certificate of authority shall be permitted to maintain any action or proceeding in any court of this State until such corporation shall have obtained a certificate of authority. Nor shall any action or proceeding be maintained in any court of this State by any successor or assignee of such corporation on any right, claim or demand arising out of the conducting of affairs...