Lowery v. Noodle Life, Inc.

• Decision Date: 15 February 2022
• Docket Number: A21A1463
• Citation: 363 Ga.App. 1,869 S.E.2d 600
• Parties: LOWERY et al. v. NOODLE LIFE, INC.
• Court: Georgia Court of Appeals

363 Ga.App. 1

869 S.E.2d 600

LOWERY et al.

v.NOODLE LIFE, INC.

A21A1463

Court of Appeals of Georgia.

February 15, 2022

Reconsideration Denied March 4, 2022

David Patrick Dekle, Andrew Wayne Holliday, Augusta, for Appellant.

Goodman McGuffey, Robert Alan Luskin, Atlanta, Robert E. Noble III, for Appellee.

Markle, Judge.

After Hee Jin Lowery was injured when a container of hot soup spilled onto her lap, she sued Noodle Life, Inc. for the negligence of its owners, alleging the soup was improperly packaged. Noodle Life moved for summary judgment, which the trial court granted. Lowery now appeals, alleging the trial court erred by granting summary judgment in Noodle Life's favor because there was sufficient evidence from which a jury could find it liable for negligence under theories of alter ego, joint venture, and/or agency. For the reasons that follow, we affirm.

In order to prevail on a motion for summary judgment under OCGA § 9-11-56, [Noodle Life], as the moving party, must show that there exists no genuine issue of material fact, and that the undisputed facts, viewed in the light most favorable to the nonmoving party, demand judgment as a matter of law. Moreover, on appeal from the denial or grant of summary judgment the appellate court is to conduct a de novo review of the evidence to determine whether there exists a genuine issue of material fact, and whether the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law.

(Citation and punctuation omitted.) In/Ex Systems v. Masud , 352 Ga. App. 722, 723 (2), 835 S.E.2d 799 (2019).

So viewed, the underlying facts of the case are as follows. In July 2017, Lowery placed a "to go" order for soup from the restaurant, Noodle, in College Park. Upon arriving at her destination, Lowery retrieved her package from the seat, and, as she was attempting to exit her vehicle, the bottom of the paper bag broke, causing the hot soup to spill onto her lap. Lowery was severely burned on her inner thighs and groin area.

At the time of the incident, Noodle in College Park was owned and operated by Shou & Shou, Inc. Noodle Life owned and operated its own business, also known as Noodle, in Midtown. The two companies are both owned by the same three siblings, and they share the same website. They did not share the same employees, but Noodle Life did the food prep for both restaurants. Although the two companies combined vendor orders, they each paid their own portion of the orders.

Noodle Life had no ownership interest in either Shou & Shou, Inc. or Noodle in College Park, nor did Shou & Shou, Inc. have an ownership interest in Noodle Life or its restaurant located in Midtown. Each company was responsible for operating its own business; they maintained separate bank accounts; neither company paid the staffing expenses of the other and they maintained separate payroll accounts; and each company bore its own profits and losses. Additionally, each company had its own employees for which it was responsible, and, on the date of this incident, Shou & Shou, Inc. employed the individuals working at Noodle in College Park.

After Lowery was injured, she sued Noodle Life for negligence, asserting that Shou & Shou, Inc. was the alter ego of Noodle Life; the two companies were a joint venture; that they were agents for one another; and that Shou & Shou, Inc.’s negligence is imputed to Noodle Life such that it was liable for her injuries.¹ Lowery also sued Shou & Shou, Inc., but settled her claims with it via a consent judgment, leaving only the claims against Noodle Life pending.

Noodle Life moved for summary judgment, arguing that it was separate and distinct from Shou & Shou, Inc., and it did not disregard the corporate form; alter ego is not a viable theory for imputing liability to Noodle Life; and the two companies did not share a joint venture or an agency relationship.²

Following a hearing, the trial court granted Noodle Life's motion. Relying on Cobra 4 Enterprises v. Powell-Newman , 336 Ga. App. 609, 785 S.E.2d 556 (2016) (physical precedent only as to Division 2), it found that, even though the two companies had the same owners and there may have been some overlap between them, the companies were neither a joint venture nor alter egos of one another. Lowery now appeals.

The concepts of alter ego, joint venture, and agency are separate but closely related theories for imposing liability. Kissun v. Humana , 267 Ga. 419, 420-421, 479 S.E.2d 751 (1997). In evaluating one corporation's liability for the acts of another, we look to the business structure of each and the level of control one entity has over the other. Id. But evidence sufficient to establish one relationship between corporate parties may not be sufficient to establish another. Id. Likewise, business relationships and interdependency of one corporation and another, alone, are insufficient to establish liability under either of these three theories. See id. (evidence insufficient to show alter ego does not as a matter of law negate the existence of an agency relationship between the corporations); see also Gateway Atlanta Apts. v. Harris , 290 Ga. App. 772, 778 (2) (b), 660 S.E.2d 750 (2008) ("The mere existence of a business interdependency does not create a joint venture.") (citation and punctuation omitted). With these principles in mind, we evaluate Noodle Life's alleged liability under each theory, finding no merit to any of them.

(a) Alter ego.

Lowery asserts that the trial court erred by granting summary judgment in favor of Noodle Life because there was a factual question regarding whether Noodle Life operated and controlled the Noodle restaurant in College Park, making Shou & Shou, Inc. merely the alter ego of Noodle Life. Because there was no evidence that the two companies were interchangeable entities, we disagree.

Under the alter ego doctrine, equitable principles are used to disregard the separate and distinct legal existence possessed by a corporation where it is established that the corporation served as a mere alter ego or business conduit of another. The concept of piercing the corporate veil is applied in Georgia to remedy injustices which arise where a party has over extended his privilege in the use of a corporate

entity in order to defeat justice, perpetuate fraud or to evade contractual or tort responsibility. Plaintiff must show that the defendant disregarded the separateness of legal entities by commingling on an interchangeable or joint basis or confusing the otherwise separate properties, records or control.

(Citation omitted.) TMX Finance v. Goldsmith , 352 Ga. App. 190, 210 (6), 833 S.E.2d 317 (2019). Additionally, "when the elements of the doctrine are satisfied, the doctrine of piercing the corporate veil also can be used ... to hold a ‘family of corporations’ liable for the debts of each other." Id. In order to pierce the corporate veil, however, there must be some evidence of abuse of the corporate form, and sole ownership of a corporation is not a factor. Cobra 4 Enterprises , 336 Ga. App. at 613 (2), 785 S.E.2d 556 (physical precedent only). "Where there is no evidence that the corporate arrangement is a sham that was designed to defeat justice, perpetuate fraud, or evade statutory, contractual, or tort liability, the issue of alter ego liability is not a jury question." Id.

Here, Lowery contends that Shou & Shou, Inc. was merely the alter ego for Noodle Life, and that Noodle Life actually operated the College Park restaurant because the College Park location used Noodle Life's menu, recipes, and food vendors; Noodle Life's employees did the food prep for Noodle in College Park; all catering orders for both locations were funneled through Noodle Life; both restaurants used the same website, and shared income and supplies; and Shou & Shou, Inc. paid Noodle Life's insurance premiums. However, a review of the evidence shows that, although there may have been some overlap between Shou & Shou, Inc. and Noodle Life, such as commonality of ownership, there are no other factors to impose the alter ego doctrine against Noodle Life.³

Contrary to Lowery's contention, Cobra 4 Enterprises is persuasive. As in Cobra 4 Enterprises , each of these corporations maintained separate bank and payroll accounts. Each company bore their own profits and losses. Additionally, each company paid its own employees, and, on the date of this incident, Shou & Shou, Inc. both employed and paid the individuals working at Noodle in College Park. Although Noodle Life may have done the food prep for Noodle in College Park, all of the food at the College Park location was cooked on site by Noodle College Park employees.⁴

As such, the evidence shows these corporations were run as two separate entities, and Lowery has pointed to no evidence showing that one had control over the other to establish liability under an alter ego theory. Cobra 4 Enterprises , 336 Ga. App. at 614-615 (2), 785 S.E.2d 556 (no evidence of any commingling of assets between the two companies, one had no right of control over the other, the two corporations had separate bank accounts, and neither paid any expenses for the other); see also NEC Technologies v. Nelson , 267 Ga. 390, 397 (5), 478 S.E.2d 769 (1996) (no evidence that one corporation was an instrumentality for the transactions of the other, or that there was commingling of money, records, or employees).⁵ Therefore, there is no evidence in this case to raise a jury question regarding whether Shou & Shou, Inc. was the alter ego for Noodle Life, and the trial court properly granted summary judgment on this issue.⁶

(b) Joint venture.

Lowery next argues that the trial court erred in finding that Shou & Shou, Inc. and Noodle Life were not engaged in a joint venture because there was evidence of mutual control between the two corporations. Again, we disagree.

A joint venture arises where two or more parties combine their property or labor, or both, in a

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