Greenleaf Auto Repair, LLC v. Ideal Auto Works, LLC

• Decision Date: 06 April 2022
• Docket Number: A175092
• Citation: 318 Or.App. 865,509 P.3d 750
• Parties: GREENLEAF AUTO REPAIR, LLC, an Oregon limited liability company, Plaintiff-Appellant, and Steve Williams, Plaintiff, v. IDEAL AUTO WORKS, LLC, an Oregon limited liability company, and Bradley Rupert Crosse, an individual, Defendants, and Julie Crosse, Defendant-Respondent.
• Court: Oregon Court of Appeals

318 Or.App. 865

509 P.3d 750

GREENLEAF AUTO REPAIR, LLC, an Oregon limited liability company, Plaintiff-Appellant,andSteve Williams, Plaintiff,

v. IDEAL AUTO WORKS, LLC, an Oregon limited liability company, and Bradley Rupert Crosse, an individual, Defendants,andJulie Crosse, Defendant-Respondent.

A175092

Court of Appeals of Oregon.

Argued and submitted March 7, 2022.

April 6, 2022

Zachary J. Dablow, Salem, argued the cause and filed the briefs for appellant.

William Tyler Griffith argued the cause for respondent. Also on the brief was Griffith Law, P.C.

Before Tookey, Presiding Judge, and Egan, Judge, and Kamins, Judge.

PER CURIAM

Plaintiff Greenleaf Auto Repair, LLC, appeals a general judgment of dismissal pursuant to ORCP 21 and a fee award. We affirm.

In reviewing the motion to dismiss, we recite the material facts as alleged in the complaint, drawing any reasonable inferences in the light most favorable to plaintiff, and review the trial court's decision for legal error. Chang v. Chun , 305 Or. App. 144, 147, 470 P.3d 410 (2020). Plaintiff entered into a consignment agreement with defendant Ideal Auto Works, LLC (Ideal), whereby Ideal would sell some of plaintiff's vehicles, then the parties would split the profits evenly. Ideal sold the vehicles but failed to turn over plaintiff's share of the proceeds. Plaintiff sued Ideal and Ideal's sole member, Julie Crosse.¹

The complaint contained three claims for relief: breach of contract, conversion, and piercing the corporate veil. Crosse and Ideal jointly filed a motion to dismiss for failure to state a claim pursuant to ORCP 21 A(8). After a hearing, the trial court dismissed all claims against Crosse and the conversion claim against Ideal. The court also granted defendants' requests for attorney fees for the conversion claims and the breach of contract claim against Crosse, but not for the veil-piercing claim. It further awarded a $1,000 enhanced prevailing party fee to Crosse and stayed determination of Ideal's motion for an enhanced prevailing party fee. The court later reduced its order to a general judgment indicating that Ideal's claim for an enhanced prevailing party fee would be decided by supplemental judgment.²

We reject plaintiff's first assignment of error without discussion. In its second assignment of error, plaintiff contends that the trial court erred in dismissing the conversion claims against Ideal and Crosse. As plaintiff appeared to acknowledge below, a breach of contract claim does not by itself support a theory of conversion. Plaintiff's current argument on appeal—that consignment proceeds are "specific money" and thus can be converted—is unpreserved and unavailing. See Wood Ind'l Corp. v. Rose , 271 Or. 103, 108, 530 P.2d 1245 (1975) (proceeds from a distribution agreement are not "specific money").

Plaintiff also assigns error to the trial court's dismissal of the breach of contract claim against Crosse. As the trial court correctly determined, the complaint fails to allege facts that would support that Crosse, rather than the LLC of which she is a member, is a party to the contract. Plaintiff's arguments on appeal are unpreserved and fail to demonstrate that the trial court erred.

Plaintiff next assigns error to the trial court's dismissal of the veil-piercing claim. In order to succeed on a piercing the corporate veil theory of liability, the plaintiff must show that (1) the individual had actual control of the corporation; (2) the individual used their control of the corporation to engage in improper conduct; and (3) the plaintiff was harmed as a result of that improper conduct. State ex rel Neidig v. Superior National Ins. Co ., 343 Or. 434, 454-55, 173 P.3d 123 (2007). The complaint contains no allegations that support the third prong, causation. It alleges that defendants "co-mingled" the proceeds from the sale of the vehicles with their personal funds and that plaintiff "has been unable to collect" its share of the profits, but contains no ultimate facts drawing a causal connection between those two allegations. See also id . at 445, 173 P.3d 123 ("[P]iercing the corporate veil is an extraordinary remedy which exists as a last resort, where there is no other adequate and available remedy to repair plaintiff's injury." (Citation and internal quotation...