Haynes v. Champagne Tile Corporation, Civ. A. No. 2806.
| Decision Date | 08 April 1964 |
| Docket Number | Civ. A. No. 2806. |
| Citation | 228 F. Supp. 157 |
| Parties | Frank HAYNES, Jr. v. CHAMPAGNE TILE CORPORATION and J. C. Champagne, Inc. |
| Court | U.S. District Court — Eastern District of Louisiana |
Walton J. Barnes, Baton Rouge, La., for plaintiff.
Victor A. Sachse, III, Breazeale, Sachse & Wilson, Baton Rouge, La., for defendants.
Plaintiff brings this suit pursuant to the provisions of the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., seeking to recover back wages allegedly due him in the sum of $437, plus penalty and attorney fees as provided by law. Neither the question of whether the plaintiff was covered by the Fair Labor Standards Act, nor the question of the amount of unpaid wages are in dispute. The only question involved is whether or not, under the facts of this case, either of the defendant corporations are indebted to the plaintiff for these back wages and penalties. It is undisputed that the plaintiff was employed by J. C. Champagne, Inc. as a tile setter's helper from February 2, 1961 to September 7, 1961, at a wage less than the statutory $1.00 per hour. At the commencement of this suit, the only defendant was Champagne Tile Corporation. After a pre-trial conference was held on this matter, the plaintiff was allowed to amend his complaint to join as a defendant J. C. Champagne, Inc. It is also undisputed that Champagne Tile Corporation was not organized or incorporated until December 22, 1961, or almost four months after the plaintiff terminated his employment with J. C. Champagne, Inc. Plaintiff was never employed by Champagne Tile Corporation. The plaintiff argues, however, that Champagne Tile Corporation is merely the alter ego of J. C. Champagne, Inc., and that if J. C. Champagne, Inc. is indebted to the plaintiff for these back wages and penalties, it should be held that Champagne Tile Corporation is also indebted to the plaintiff in solido with J. C. Champagne, Inc. for the same amount.
Defendant, on the other hand, contends that the two corporations are entirely separate and distinct; that Champagne Tile Corporation is neither the successor to nor the alter ego of J. C. Champagne, Inc.; and that neither corporation can be held liable for the debts of the other.
This matter was heard by this Court on March 17, 1964, and as a result of that hearing, and after considering the arguments of counsel and the briefs submitted herein, the Court is of the opinion that plaintiff does have a right of recovery against J. C. Champagne, Inc., but that he has no right of recovery against Champagne Tile Corporation.
At the trial of this case it was established that J. C. Champagne, Inc. ceased functioning as a going corporation sometime during the first part of September, 1961. The corporation has not to this date been legally dissolved, but it is completely inactive, and has taken on no new work of any kind since it terminated its business activities in September of 1961. The termination of its business activities was necessitated by its poor financial condition. In other words, it went broke. During the month of September, 1961, it became a defunct corporation, and it has remained as such ever since. Its legal dissolution has been delayed only to assist a bonding company in terminating some bond loss claims incurred while the corporation was actually engaged in business.
Champagne Tile Corporation, on the other hand, was incorporated on December 12, 1961, but did not commence business operations until some time in 1962. There is no dispute that plaintiff never worked for Champagne Tile Corporation. No assets or equipment owned by J. C. Champagne, Inc. were transferred to or used by Champagne Tile Corporation, and with the exception of the president, the officers of the two corporations were not the same....
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