Global Credit Services, Inc. v. AMISUB (Saint Joseph Hosp.), Inc.

• Decision Date: 10 December 1993
• Docket Number: No. S-91-759,S-91-759
• Citation: Global Credit Services, Inc. v. AMISUB (Saint Joseph Hosp.), Inc., 508 N.W.2d 836, 244 Neb. 681 (Neb. 1993)
• Parties: GLOBAL CREDIT SERVICES, INC., Appellant, v. AMISUB (SAINT JOSEPH HOSPITAL), INC., et al., Appellees.
• Court: Nebraska Supreme Court

Page 836

508 N.W.2d 836

244 Neb. 681

GLOBAL CREDIT SERVICES, INC., Appellant, v. AMISUB (SAINT JOSEPH HOSPITAL), INC., et al., Appellees.

No. S-91-759.

Supreme Court of Nebraska.

Dec. 10, 1993.

Syllabus by the Court

1. Corporations. A corporation will be looked upon as a legal entity separate and apart from its shareholders and officers unless and until sufficient reason to the contrary appears, but when the notion of a legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime the law will regard the corporation as an association of persons.

2. Corporations. The corporate identity is disregarded only where a corporation has been used to commit fraud, violate a legal duty, or perpetrate a dishonest or unjust act in contravention of the rights of another.

3. Corporations: Proof. A plaintiff seeking to pierce the corporate veil must allege and prove that the corporation was under the actual control of the shareholder and that the shareholder exercised such control to commit a fraud or other wrong in contravention of the plaintiff's rights.

4. Corporations. Among the factors relevant in determining whether to disregard the corporate entity are grossly inadequate capitalization, insolvency of the debtor corporation at the time the debt is incurred, diversion by the shareholder or shareholders of corporate funds or assets to their own or other improper uses, that the corporation is a mere facade for the personal dealings of the shareholder, and that the operations of the corporation are carried on by the shareholder in disregard of the corporate entity.

5. Corporations. The doctrine of separate corporate existence does not break down merely because a corporation is a subsidiary, even if wholly owned by the parent.

6. Corporations: Stock. Ownership of all the stock of a corporation by one person, in and of itself, is an insufficient basis upon which to disregard the corporate form.

7. Corporations: Proof. To pierce the corporate veil between a parent and a subsidiary, a plaintiff must show more than the mere sharing of services between the two corporations.

8. Corporations. Standing behind another's debts does not require that the corporate forms of the organizations be disregarded.

9. Corporations: Words and Phrases. Inadequate capitalization means capitalization very small in relation to the nature of the business of the corporation and the risks the business entails measured at the time of formation.

10. Corporations. The existence of interlocking directors is not, in and of itself, sufficient without direct evidence of specific manipulative conduct to warrant the piercing of the corporate veil.

11. Corporations. Merely taking an active part in the management of a corporation does not automatically constitute control sufficient to pierce the corporate veil.

12. Joint Ventures. A joint venture can exist only by voluntary agreement of the parties and cannot arise by operation of law.

13. Joint Ventures. In order for a joint venture to exist, there must be an agreement to enter into an undertaking, the parties must have a community of interest in the object of the undertaking and a common purpose in performance, and each of the parties must have an equal voice in the manner of performance and control over the agencies used.

14. Joint Ventures. The mere pooling of property, money, assets, skill, or knowledge does not create a joint venture relationship.

15. Joint Ventures. In order for a joint venture to exist, there must be something more than mere sharing of profits; there must be some active participation in the enterprise and some control of the subject matter thereof or property engaged therein.

16. Joint Ventures: Partnerships. The absence of mutual interest in the profits or benefits is conclusive that a partnership or joint venture does not exist.

17. Leases: Contracts. If a lease is intended to stand as security, a lease agreement can be considered a contract of sale.

18. Joint Ventures. Pooled labor and skill is insufficient to establish a joint venture.

James H. Monahan, Omaha, for appellant.

Neil B. Danberg, Jr., and James L. Schneider of Kennedy, Holland, DeLacy & Svoboda, Omaha, for appellees AMISUB et al.

David A. Blagg and Terry J. Grennan of Cassem, Tierney, Adams, Gotch & Douglas and Gerald Friedrichsen of Fitzgerald, Schorr, Barmettler & Brennan, Omaha, for appellee Creighton University.

HASTINGS, C.J., and BOSLAUGH, CAPORALE, FAHRNBRUCH, and LANPHIER, JJ.

CAPORALE, Justice.

I. STATEMENT OF CASE

Plaintiff-appellant, Global Credit Services, Inc., asserts that the defendant-appellee AMISUB (Saint Joseph Hospital), Inc., the operator of Saint Joseph Hospital, breached its contract with Global and that the other defendants-appellees, and each of them, jointly and severally, tortiously interfered with and destroyed Global's business relationship with AMISUB. Global seeks an accounting and damages.

Four of the other defendants-appellees are corporate entities: American Medical International, Inc., Creighton Omaha Regional Health Care Corporation, Creighton University, and The Health Future Foundation. The remaining defendants, Judy Franksen, Leigh Jean Koinzan, and Thomas Tokheim, are individuals working at the hospital, whose allegedly wrongful acts Global asserts are to be attributed to each of the corporate defendants.

All of the defendants moved for summary judgment of dismissal; the district court sustained the motions of all the corporate defendants except AMISUB and partially sustained the motions of the individual defendants. Global has appealed only the judgments of dismissal entered in favor of the four corporate defendants last named above.

Global's operative assignments of error claim, in summary, that the district court erred in failing to (1) pierce the veils of the four dismissed corporate defendants and hold that they all jointly operated the hospital and are each responsible for the actions of the other corporate defendants, or (2) find that the corporate defendants were joint venturers and, for that reason, each was responsible for the actions of the others. We affirm.

II. SCOPE OF REVIEW

Proceedings seeking disregard of the corporate entity to impose liability on a shareholder for a corporation's debt or other obligation are equitable actions. An appeal of such a matter is tried de novo on the record, and the appellate court is required to reach factual findings independent of the trial court. Southern Lumber & Coal v. M.P. Olson Real Est., 229 Neb. 249, 426 N.W.2d 504 (1988); ServiceMaster Indus. v. J.R.L. Enterprises, 223 Neb. 39, 388 N.W.2d 83 (1986). See, also, Metropolitan Life Ins. Co. v. Kissinger Farms, 244 Neb. 620, 508 N.W.2d 568 (1993). In view of the rule that if a court of equity has properly acquired jurisdiction in a suit for equitable relief, it may make complete adjudication of all matters properly presented and involved in the case and grant relief, legal or equitable, as may be required and thus avoid unnecessary litigation, we need not concern ourselves with whether other aspects of this case sound in law rather than equity. See, Trump, Inc. v. Sapp Bros. Ford Center, Inc., 210 Neb. 824, 317 N.W.2d 372 (1982); Daugherty v. Ashton Feed and Grain Co., Inc., 208 Neb. 159, 303 N.W.2d 64 (1981); Hull v. Bahensky, 196 Neb. 648, 244 N.W.2d 293 (1976).

It must be borne in mind, however, that this matter arises on the grant of summary judgments. Such a judgment is properly granted when the pleadings, depositions, admissions, stipulations, and affidavits in the record disclose that there is no genuine issue concerning any material fact or the ultimate inferences that may be drawn from such fact or facts and the moving party is entitled to judgment as a matter of law. VonSeggern v. Willman, 244 Neb. 565, 508 N.W.2d 261 (1993); Gould v. Orr, 244 Neb. 163, 506 N.W.2d 349 (1993); Design Data Corp. v. Maryland Cas. Co., 243 Neb. 945, 503 N.W.2d 552 (1993); Metropolitan Life Ins. Co. v. Beaty, 242 Neb. 169, 493 N.W.2d 627 (1993).

In appellate review of a summary judgment, the court views the evidence in a light most favorable to the party against whom judgment is granted and gives such party the benefit of all reasonable inferences deducible from the evidence. Abdullah v Gunter, 242 Neb. 854, 497 N.W.2d 12 (1993); Design Data Corp., supra; Abboud v. Michals, 241 Neb. 747, 491 N.W.2d 34 (1992).

Moreover, as to questions of law, an appellate court has an obligation to reach independent, correct conclusions irrespective of the determinations made by the courts below. AMISUB v. Board of Cty. Comrs. of Douglas Cty., 244 Neb. 657, 508 N.W.2d 827 (1993); Metropolitan Life Ins. Co. v. Kissinger Farms, 244 Neb. 620, 508 N.W.2d 568 (1993); Wilson v. Misko, 244 Neb. 526, 508 N.W.2d 238 (1993).

III. BACKGROUND

On January 7, 1983, Global, doing business as Creditors Collection Bureau, signed a contract with Creighton Omaha Regional, then owner of Saint Joseph Hospital, for collection of its overdue patient accounts.

On November 19, 1984, Creighton Omaha Regional transferred the assets of the hospital to AMISUB pursuant to an August 24, 1984, agreement among Creighton Omaha Regional, American Medical, and AMISUB, American Medical's wholly owned subsidiary. AMISUB agreed to assume all of Creighton Omaha Regional's obligations, and with Global's consent, its collection agreement with Creighton Omaha Regional was assigned to AMISUB.

At the time of the transfer, Creighton Omaha Regional had several affiliation agreements, including one with the university, which was identified in the transfer as a third-party beneficiary entitled to enforce those provisions of the contract which obligated Creighton Omaha Regional and AMISUB to provide the university with specified benefits.

The August 24, 1984, agreement specifies that both American Medical and AMISUB will discharge certain specified obligations in connection...