Messick v. Moring

• Decision Date: 11 September 1987
• Parties: Jeffrey D. MESSICK, as administrator of the estate of Donna Messick Davis, deceased, et al. v. Joseph R. MORING and William D. Drane. 85-1484.
• Court: Alabama Supreme Court

Page 892

514 So.2d 892

Jeffrey D. MESSICK, as administrator of the estate of Donna Messick Davis, deceased, et al. v. Joseph R. MORING and William D. Drane.

85-1484.

Supreme Court of Alabama.

Sept. 11, 1987.

James L. Teague, Mobile, for appellants.

Reggie Copeland, Jr., and Forrest S. Latta of Nettles, Barker, Janecky & Copeland, Mobile, for appellees.

SHORES, Justice.

Plaintiff, Jeffrey D. Messick, as executor of the estate of Donna Messick Davis, brought a dram shop and wrongful death action against Metropolitan Restaurant and Lounge, Inc., Metropolitan Fixtures Corporation, and Metropolitan Management Corporation. Joseph Moring, M.D., and William Drane, M.D., were sued individually and as the stockholders, officers, and directors of the three corporate defendants. Messick appeals from an order granting a summary judgment (made final pursuant to Rule 54(b), Ala.R.Civ.P.) relieving Moring and Drane of all personal liability on the ground that they were protected by the doctrine of limited shareholder liability. We affirm.

In 1977, Moring and Drane organized three corporations for the purpose of operating a restaurant and lounge popularly known as "The Met." Metropolitan Restaurant and Lounge, Inc., was a non-profit corporation and held the liquor license, since the establishment sold alcoholic beverages on Sunday. Metropolitan Fixtures Corporation was organized to contract with the non-profit corporation to provide the club's premises and all its fixtures. Metropolitan Management Corporation was organized to contract with the non-profit corporation to provide employees and management of the club. Moring and Drane were the directors of the non-profit corporation and the shareholders, officers, and directors of the other corporations.

The circumstances giving rise to this cause of action involve the employees of The Met allegedly serving alcoholic drinks to Peter Michael Gregor while he was visibly intoxicated on the night of August 4, 1982. In the early morning hours of August 5, 1982, while intoxicated, Gregor drove his automobile through the intersection of Old Shell Road and the East Service Road of Interstate 65 in Mobile, Alabama, and struck an automobile being driven by Donna Messick Davis, causing serious bodily injuries which resulted in her death.

Messick brought an action against those entities doing business as The Met for negligence and for violating the Dram Shop Act, Ala.Code (1975), § 6-5-71. The complaint was later amended to allege that all three corporations were the alter egos of Moring and Drane and that the corporations were used as instrumentalities for avoiding personal liability and that the doctors had failed to adhere to corporate formalities.

In order for summary judgment to be appropriate, the pleadings, affidavits, depositions, admissions, and answers to interrogatories must show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. A.R.Civ.P. 56(c). Bon Secour Fisheries, Inc. v. Barrentine, 408 So.2d 490 (Ala.1981). Where there is a scintilla of evidence in support of a cognizable theory advanced by the nonmoving party, the trial court must deny the motion for summary judgment and allow the factual questions to go to the jury. Duff v. Southern Ry., 496 So.2d 760 (Ala.1986). The decision of when to impose personal liability on a shareholder or officer is a question of fact treated as an evidentiary matter to be determined on a case by case basis. Cohen v. Williams, 294 Ala. 417, 318 So.2d 279 (1975).

Because this is an appeal from a summary judgment, we review the record for evidence that would yield any inference in support of Messick's claim creating a factual dispute for resolution by a jury. Therefore, we recite those facts most favorable to the argument of Messick and from which must be inferred any disputed material fact. Marks Fitzgerald Furniture Co. v. Clarklift of Alabama, Inc., 494 So.2d 614 (Ala.1986).

On Messick's request, Moring and Drane either produced, or allowed Messick's expert to inspect, nearly 2000 pages of corporate records and exhibits. Documents such as ledgers, corporate minutes, tax returns, financial statements, and corporate books were made available for inspection by Messick.

Messick questions only two aspects of the operation of the corporations and argues that these two aspects would be sufficient evidence for a jury to impose personal liability on Moring and Drane: 1) the write-off of a 1979 loan of $112,000 to the stockholders as a bad debt, with no effort to collect; and 2) the transfer of money into a Merrill Lynch account without any documentation as to the disposition of these funds.

On May 3, 1978, Moring and Drane borrowed $100,000 from the First National Bank of Mobile in their own names; they were personally liable for this debt. In 1979, the Fixture corporation took an assignment of the debt and paid off the note in the doctors' individual names. The Fixture corporation's tax return for the fiscal year ending November 30, 1978, listed $11,000 in loans to stockholders. For the fiscal years ending on November 30 of 1979, 1980 and 1981, the tax returns indicated loans to stockholders in excess of $111,000.00. For the fiscal year beginning December 1, 1981 and ending November 30, 1982, the tax returns indicated a beginning "loans to stockholders" balance of $112,148.00 and an ending balance of $0.00. This loan to stockholders was written off as a bad debt...