Vuitch v. Furr

• Decision Date: 16 October 1984
• Docket Number: No. 82-1077.,82-1077.
• Citation: 482 A.2d 811
• Parties: Milan M. VUITCH, et al., Appellants, v. Andrea FURR, Appellee.
• Court: D.C. Court of Appeals

482 A.2d 811

Milan M. VUITCH, et al., Appellants, v. Andrea FURR, Appellee.

No. 82-1077.

District of Columbia Court of Appeals.

Argued February 2, 1984.

Decided October 16, 1984.

COPYRIGHT MATERIAL OMITTED

Joanne Hustead, Fairfax, Va., for appellants.

Gerard E. Mitchell, Washington, D.C., for appellee.

Before NEWMAN, Chief Judge, and NE-BEKER and ROGERS, Associate Judges.

ROGERS, Associate Judge:

This is an appeal from the denial of a motion for a directed verdict in a civil action brought by appellee against Dr. Vuitch, Mrs. Vuitch, Laurel Clinic, Inc. and Laurel Hospital, Inc. for injuries she suffered from a second trimester abortion and post-operative treatment performed by Dr. Vuitch at the Laurel Clinic. The issue on appeal is whether appellants' motion for a directed verdict was properly denied on the issues of (1) piercing the corporate veils of Laurel Clinic and Laurel Hospital, (2) Mrs. Vuitch's individual liability as a corporate officer, and (3) malpractice by Dr. Vuitch. Upon review of the record, we hold that there was sufficient evidence on these issues and no error by the trial court in denying the motion for a directed verdict.¹ Accordingly, we affirm.²

I.

The law applicable to review of a denial of a motion for directed verdict in this jurisdiction is clear:

[T]he evidence must be reviewed most favorably to the party against whom the motion is made, and that party must be given the benefit of all reasonable inferences from the evidence. Corley v. B.P. Oil Corp., 402 A.2d 1258, 1263 (D.C. 1979) (citing St. Paul Fire & Marine Insurance Co. v. James G. Davis Construction Corp., 350 A.2d 751, 752 (D.C. 1976)). This standard of review on appeal is identical to the standard applied by the trial court. Gaither v. District of Columbia, 333 A.2d 57, 59 (D.C. 1975) (citing Calloway v. Central Charge Service, 142 U.S.App.D.C. 259, 440 F.2d 287 (1971)). With the evidence viewed in this manner, a verdict will be directed only when the evidence is so clear that reasonable men could reach but one opinion. Corley v. B.P. Oil Corp., supra, 402 A.2d at 1263 (quoting Bauman v. Sragow, 308 A.2d 243, 244 (D.C. 1973)). In so viewing the evidence, the court "must take care to avoid weighing the evidence, passing on the credibility of witnesses or substituting its judgment for that of the jury." Corley v. B.P. Oil Corp., supra, 402 A.2d at 1263 (citing Yazzie v. Sullivent, 561 F.2d 183, 188 (10th Cir. 1977)); Mills v. Cosmopolitan Ins. Agency, Inc., 424 A.2d 43, 46 (D.C. 1980). If reasonable men could differ on the outcome of the case, it must be sent to the jury. Corley v. B.P. Oil Corp., supra, 402 A.2d at 1263 ("where . . . the case turns on controverted facts and the credibility of witnesses, the case is peculiarly one for the jury") (quoting Aylor v. Intercounty Construction Corp., 127 U.S.App.D.C. 151, 155, 381 F.2d 930, 934 (1967)); Johnson v. Weinberg, 434 A.2d 404, 407-08 (D.C. 1981).

Viewing the evidence most favorably to appellee reveals that Dr. Vuitch performed a dilation and curettage abortion on Andrea Furr on Thursday, January 8, 1981, at the Laurel Clinic, Inc., 1712 Eye Street, Northwest in the District of Columbia. In the course of performing the abortion, he lacerated Ms. Furr's uterine wall. Dr. Vuitch attempted to suture the laceration and kept her overnight at the Clinic despite his knowledge that the statute under which the Clinic is licensed, the D.C. Ambulatory Surgical Treatment Center Licensure Act, (D.C. Law 2-66, 24 D.C. Register 6836, January 19, 1978) prohibits the overnight retention of patients. He continued to keep Ms. Furr at the Clinic on Friday until approximately 9:00 p.m., when he moved her for another overnight stay to the Clinic Annex, which is located at his residence in Silver Spring, Maryland. He returned Ms. Furr to the Clinic on Saturday, January 10, and discharged her.

On Sunday, January 11, Ms. Furr was taken to Hadley Memorial Hospital, in severe pain, by her relatives. The next morning Dr. Joseph Bourke and Dr. William Brownlee, obstetrician-gynecologists, performed exploratory surgery and discovered that a recent, unsutured laceration in the cervix had left a hole leading from the vagina to the abdominal cavity. They found that significant pelvic and intestinal peritonitis (inflammation of the membrane lining the abdominal cavity) had infected the uterus which necessitated a total hysterectomy. Dr. Brownlee and Dr. Bourke performed the hysterectomy and also removed a mass of dead tissue from the abdomen, which laboratory analysis revealed was fetal tissue which had not been removed during the abortion.

Appellee sued Dr. and Mrs. Vuitch and others for their individual actions and their actions as agents, officers and directors, and employees of Laurel Clinic and Laurel Hospital, on multiple theories, including medical malpractice, civil conspiracy in the commission of medical malpractice for profit, and disregard and manipulation of the corporate entities (3rd amended complaint).³ She also sued the corporations, alleging they were liable for the injurious acts of their employees and agents, and demanded a jury trial on all of the issues. The jury found for appellee on all claims against all appellants and, in answers to special interrogatories, found that the corporate veils of Laurel Clinic and Laurel Hospital should be pierced and that Mrs. Vuitch had participated in tortious or negligent acts which proximately caused injury to appellee. The jury awarded appellee $125,000 in compensatory damages but denied her request for punitive damages.

II. Piercing the Corporate Veil

Appellants assert that the jury should not have been allowed to pierce the corporate veils of Laurel Clinic, Inc. and Laurel Hospital, Inc. to impose shareholder liability because the evidence was insufficient as a matter of law to permit consideration of the issue.

The general rule is that a corporation is regarded as an entity separate and distinct from its shareholders. Harris v. Wagshal, 343 A.2d 283, 287 (D.C. 1975). Throughout the years this court has held that the acts and obligations of the corporate entity will not be recognized as those of a particular person until the party seeking to disregard the corporate entity has proved by affirmative evidence that there is (1) unity of ownership and interest, and (2) use of the corporate from to perpetrate fraud or wrontg. McAuliffe v. C. & K. Builders, 142 A.2d 605, 607 (D.C. 1958).⁴ In Burrows Motor Co. v. Davis, 76 A.2d 163, 165 (D.C. 1950), the court stated:

Before a corporate entity can be disregarded and the acts and obligations of a corporation can legally be recognized as those of particular persons, or vice versa, it must appear that the corporation is not only controlled by those persons, but also that the separateness of the persons and the corporation has ceased and the facts must be such that an adherence to the fiction of the separate existence of the corporation would sanction a fraud or promote injustice.

More recently, the court has held that considerations of justice and equity can justify piercing the corporate veil and has rejected the contention that in order to pierce the corporate veil there must be a showing of fraud "directly tainting the obligation on which the plaintiff is suing. . . ." Harris v. Wagshal, supra, 343 A.2d at 287-288.⁵ Because piercing the corporate veil is a doctrine of equity,⁶ the factor which predominates will vary in each case, and the"decision to pierce will be influenced by considerations of who should bear the risk of loss and what degree of legitimacy exists for those claiming the limited liability protection of a corporation.⁷

There is no precise formula by which to predict when courts will pierce the corporate veil since each case is sui generis. 1 Fletcher, Cyclopedia of Corporations, § 41.30 (perm. ed. 1983).⁸ Nor is there a uniform standard to determine whether the evidence has sufficiently demonstrated unity of interest and ownership. Many factors are considered, including whether corporate formalities have been disregarded, and whether there has occurred an intermingling of corporate and personal funds, staff, and property. Valley Finance, Inc. v. United States, 203 U.S.App.D.C. 128, 138, 629 F.2d 162, 172 (1980) ("The test is a practical one, based largely on a reading of the particular factual circumstances"), cert. denied, 451 U.S. 1018, 101 S.Ct. 3007, 69 L.Ed.2d 389 (1981). Unity of interest and ownership can also be demonstrated by showing domination and control of a corporation, as in a parent-subsidiary relationship or in a closely held corporation. In Harris v. Wagshal, supra, 343 A.2d at 287, this court held piercing the corporate veil was justified because of evidence of: (1) appellants' fraudulent use, as their personal instrument, of a corporation they had formed to protect their business from the claims of Mr. Harris' judgment creditors; (2) extensive commingling of personal and corporate funds; (3) substantial disregard of the formalities of the corporate form and (4) inadequate initial capitalization.⁹

Guided by these standards, our review of the record indicates that appellee presented sufficient evidence to demonstrate unity of interest and control by the Vuitchs of Laurel Hospital, Inc. and Laurel Clinic, Inc. The record reveals Laurel Clinic is owned by Laurel Hospital, Inc., which is a Maryland corporation in which Dr. and Mrs. Vuitch own all of the stock. Each corporation is run by a three-person Board of Directors; Dr. Vuitch is the president of both corporations, as well as the medical director of the Clinic, and Mrs. Vuitch is secretary-treasurer of both corporations. Their son, William, is the other director of the Clinic. Since the Clinic's founding in 1973, Dr. and Mrs. Vuitch have been annually elected as its officers without holding any meetings (Plaintiff's Exhibit 20A).¹⁰

The evidence amply demonstrated the Vuitchs' intermingling of...