Case Title: Dombroski v. WellPoint, Inc.

Citation: 2008-Ohio-4827

Docket Number: 20072162

State: ohio

Court: Ohio Supreme Court

Date: 2008-09-30T00:00:00Z

Document:
[Cite as Dombroski v. WellPoint, Inc., 119 Ohio St.3d 506, 2008-Ohio-4827.] 
 
 
DOMBROSKI, APPELLEE, v. WELLPOINT, INC. ET AL., APPELLANTS, ET AL. 
[Cite as Dombroski v. WellPoint, Inc., 119 Ohio St.3d 506, 2008-Ohio-4827.] 
Corporations—Shareholder liability for torts—Belvedere Condominium Unit 
Owners’ Assn. v. R.E. Roark Cos., Inc., modified. 
(No. 2007-2162 – Submitted June 4, 2008 – Decided September 30, 2008.) 
CERTIFIED by the Court of Appeals for Belmont County,  
No. 06-BE-60, 173 Ohio App.3d 508, 2007-Ohio-5054. 
__________________ 
SYLLABUS OF THE COURT 
To fulfill the second prong of the Belvedere test for piercing the corporate veil, 
the plaintiff must demonstrate that the defendant shareholder exercised 
control over the corporation in such a manner as to commit fraud, an 
illegal act, or a similarly unlawful act.  (Belvedere Condominium Unit 
Owners’ Assn. v. R.E. Roark Cos., Inc. (1993), 67 Ohio St.3d 274, 617 
N.E.2d 1075, modified.) 
__________________ 
 
MOYER, C.J. 
I 
{¶ 1} The Seventh District Court of Appeals has certified this case 
pursuant to Section 3(B)(4), Article IV, Ohio Constitution and App.R. 25.  The 
court of appeals found its judgment to be in conflict with the judgments of the 
Sixth District Court of Appeals in Collum v. Perlman (Apr. 30, 1999), Lucas App. 
No. L-98-1291, 1999 WL 252725, and Widlar v. Young, Lucas App. No. L-05-
1184, 2006-Ohio-868, on the following issue: “Does the second prong of [the test 
for piercing the corporate veil set forth in Belvedere Condominium Unit Owners’ 
Assn. v. R.E. Roark Cos., Inc. (1993), 67 Ohio St.3d 274, 617 N.E.2d 1075], 
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which states that the corporate veil can be pierced when control of the corporation 
‘was exercised in such a manner as to commit fraud or an illegal act against the 
person seeking to disregard the corporate entity,’ also allow the corporate veil to 
be pierced in cases where control was exercised to commit unjust or inequitable 
acts that do not rise to the level of fraud or an illegal act?” 
{¶ 2} For the following reasons, we answer the question in the negative 
and reverse the judgment of the court of appeals.  However, we modify the second 
prong of the Belvedere test to require that a plaintiff must demonstrate that the 
defendant shareholder exercised control over the corporation in such a manner as 
to commit fraud, an illegal act, or a similarly unlawful act. 
II 
{¶ 3} The trial court dismissed the claims relevant to this matter upon a 
Civ.R. 12(B)(6) motion to dismiss.  We therefore rely upon the allegations in the 
amended complaint to establish the material facts for our review.  Vitantonio, Inc. 
v. Baxter, 116 Ohio St.3d 195, 2007-Ohio-6052, 877 N.E.2d 663, ¶ 2. 
{¶ 4} Plaintiff-appellee, Kimberly J. Dombroski, suffers from profound 
sensorineural hearing loss in both ears; in other words, she is completely deaf.  
Shortly after she was diagnosed with this condition, her treating physician 
determined that it was medically necessary for her to receive a cochlear implant.1  
Dombroski subsequently received a cochlear implant in her left ear, which 
restored her ability to hear in that ear. 
{¶ 5} However, the implant did not increase Dombroski’s ability to hear 
in her right ear.  Her treating physician determined that it was medically necessary 
for her to receive a second cochlear implant so that she could localize sound and 
better communicate with others. 
                                                 
1. A cochlear implant is a small electronic device that is placed inside a deaf person’s ear and 
provides him or her with a sense of sound.  According to the amended complaint, such implants 
are approved by the Food and Drug Administration and have a success rate of approximately 90 
percent.  
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{¶ 6} Dombroski’s initial implant was paid for by an insurance company 
that is not a party to this case.  When she sought the second implant, she had a 
health insurance contract with defendant Community Insurance Company 
(“Community”).  One of Community’s affiliates, defendant Anthem UM Services, 
Inc. (“Anthem UM”), participated in the administration of Dombroski’s policy, as 
did defendant-appellee Anthem Insurance Companies, Inc. (“Anthem Insurance”).  
Defendant-appellee WellPoint, Inc., which is a publicly traded company listed on 
the New York Stock Exchange, owns 100 percent of the stock of these three 
companies. 
{¶ 7} In accordance with the terms of the Community insurance policy, 
Dombroski’s treating physician requested authorization to place a cochlear 
implant in Dombroski’s right ear.  Anthem UM denied coverage, claiming that 
“the use of bilateral cochlear implants to improve hearing is considered 
investigational.”  Dombroski appealed this decision through Anthem UM’s 
internal appeals process, but was unsuccessful. 
{¶ 8} Dombroski filed the instant action against Community, Anthem 
UM, Anthem Insurance, and WellPoint.  In her first two claims for relief, she 
alleged that the defendants had breached the insurance contract and were 
promissorily estopped from violating their promises to act in good faith and in 
accordance with their own policies and procedures.  For her final claim, 
Dombroski alleged that the defendants had acted in bad faith in processing and 
repeatedly denying her requests for a cochlear implant in her right ear and that 
these actions caused her to suffer physical and pecuniary losses and emotional 
distress.  Insurer bad faith is an actionable tort in this state.  See Hoskins v. Aetna 
Life Ins. Co. (1983), 6 Ohio St.3d 272, 6 OBR 337, 452 N.E.2d 1315, paragraph 
one of the syllabus. 
{¶ 9} As further support for her claims against WellPoint and Anthem 
Insurance, Dombroski alleged that “WellPoint through [Anthem Insurance] 
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establishes certain ‘corporate medical policies,’ which it directs its subsidiaries to 
utilize in the administering, handling and processing of claims under its insurance 
products throughout the United States.”  She further alleged that a specific 
Anthem Insurance medical policy served as the primary basis for denying 
coverage for the cochlear implant and that the “handling, processing and repeated 
denials” of coverage constituted bad faith.  Finally, Dombroski alleged that (1) 
WellPoint owned 100 percent of the stock of the other defendants, (2) WellPoint 
controlled those subsidiary corporations to such a degree that the subsidiaries had 
no separate minds, wills, or existences of their own, and (3) WellPoint and 
Anthem Insurance are operated and controlled by the same officers and have the 
same office headquarters, and one of WellPoint’s officers signed the insurance 
certificate issued to Dombroski. 
{¶ 10} WellPoint and Anthem Insurance filed motions to dismiss pursuant 
to Civ.R. 12(B)(6).  They argued that Dombroski failed to raise a claim upon 
which relief could be granted because she did not have privity of contract with 
either organization and she failed to allege a legitimate basis for piercing the 
corporate veil to hold the organizations liable in their capacities as shareholders of 
Community and Anthem UM. 
{¶ 11} The trial court found that Dombroski had not alleged facts showing 
privity of contract with either organization.  It further found that Dombroski had 
failed to allege facts sufficient for piercing the corporate veil because she did not 
demonstrate “the type of illegal or unjust result intended by Belvedere.”  The trial 
court therefore dismissed Dombroski’s claims against WellPoint and Anthem 
Insurance pursuant to Civ.R. 12(B)(6).  This ruling did not affect her claims 
against Community and Anthem UM. 
{¶ 12} The court of appeals reversed the decision of the trial court, 
holding that Dombroski had pleaded sufficient facts to advance claims against 
WellPoint and Anthem Insurance based on piercing the corporate veil.  
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Dombroski v. WellPoint, Inc., 173 Ohio App.3d 508, 2007-Ohio-5054, 879 
N.E.2d 225, ¶ 37. 
{¶ 13} The court of appeals’ discussion of the second prong of the 
Belvedere test for piercing the corporate veil is relevant to our review.  The 
second prong requires the plaintiff to show that shareholders exercised their 
control of the corporation to be pierced “in such a manner as to commit fraud or 
an illegal act against the person seeking to disregard the corporate entity.”  
Belvedere, 67 Ohio St.3d 274, 617 N.E.2d 1075, paragraph three of the syllabus.  
The court of appeals read this provision broadly, stating that a plaintiff can pierce 
the corporate veil for less than fraudulent or illegal acts: “Many appellate districts, 
including ours, have defined the second prong of Belvedere as including unjust or 
inequitable acts.”  Dombroski at ¶ 25.  Following that interpretation, the court 
concluded that the alleged bad-faith breach of the insurance contract at issue here 
was sufficiently unjust to survive a Civ.R. 12(B)(6) motion.  Id. at ¶ 33. 
{¶ 14} The court of appeals determined that its decision conflicted with 
the judgments of the Sixth District Court of Appeals in Collum v. Perlman (Apr. 
30, 1999), Lucas App. No. L-98-1291, 1999 WL 252725, and Widlar v. Young, 
Lucas App. No. L-05-1184, 2006-Ohio-868, and certified the case as a conflict to 
this court.  We recognized the certified conflict. 
III 
A. 
Limited Shareholder Liability and Piercing the Corporate Veil 
{¶ 15} This case requires us to determine what conduct must be 
demonstrated to fulfill the second prong of the test for piercing the corporate veil 
created in Belvedere.  To place our decision in context, we must first examine the 
nature of limited shareholder liability and the rationale for the principle that 
piercing the corporate veil operates as an exception to this limited liability. 
{¶ 16} The principle that shareholders, officers, and directors of a 
corporation are generally not liable for the debts of the corporation is ingrained in 
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Ohio law.  See Section 3, Article XIII, Ohio Constitution; Belvedere, 67 Ohio 
St.3d at 287, 617 N.E.2d 1075, citing Presser, Piercing the Corporate Veil (1991) 
1–4.  The corporate form is useful primarily because it creates a division between 
shareholders and their business concerns: “[The corporate form] has been 
introduced for the convenience of the company in making contracts, in acquiring 
property for corporate purposes, in suing and being sued, and to preserve the 
limited liability of the stockholders, by distinguishing between the corporate debts 
and property of the company, and of the stockholders in their capacity as 
individuals.”  State ex rel. Atty. Gen. v. Std. Oil Co. (1892), 49 Ohio St. 137, 177, 
30 N.E. 279. 
{¶ 17} However, shareholders are not absolutely immune from liability 
for the actions of their corporations.  “[L]ike every other fiction of the law, when 
urged to an intent and purpose not within its reason and policy, [the corporate 
form] may be disregarded.”   State ex rel. Atty. Gen. at paragraph one of the 
syllabus.  Shareholders may thus be held liable for their own bad acts 
notwithstanding the protections afforded by the corporate form when they use the 
corporation “for criminal or fraudulent purposes” to the detriment of a third party.  
Belvedere, 67 Ohio St.3d at 287, 289, 617 N.E.2d 1075.  Piercing the corporate 
veil in this manner remains a “rare exception,” to be applied only “in the case of 
fraud or certain other exceptional circumstances.”  Dole Food Co. v. Patrickson 
(2003), 538 U.S. 468, 475, 123 S.Ct. 1655, 155 L.Ed.2d 643. 
{¶ 18} In Belvedere, this court established a three-pronged test for courts 
to use when deciding whether to pierce the corporate veil, based on a test 
developed by the United States Court of Appeals for the Sixth Circuit in Bucyrus-
Erie Co. v. Gen. Prods. Corp. (C.A.6, 1981), 643 F.2d 413, 418.  Belvedere, 67 
Ohio St.3d at 288–289, 617 N.E.2d 1075.  This test focuses on the extent of the 
shareholder’s control of the corporation and whether the shareholder misused the 
control so as to commit specific egregious acts that injured the plaintiff: “The 
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corporate form may be disregarded and individual shareholders held liable for 
wrongs committed by the corporation when (1) control over the corporation by 
those to be held liable was so complete that the corporation has no separate mind, 
will, or existence of its own, (2) control over the corporation by those to be held 
liable was exercised in such a manner as to commit fraud or an illegal act against 
the person seeking to disregard the corporate entity, and (3) injury or unjust loss 
resulted to the plaintiff from such control and wrong.”  Id. at paragraph three of 
the syllabus.  All three prongs of the test must be met for piercing to occur. 
{¶ 19} We must take as true the allegation that WellPoint and Anthem 
Insurance controlled the subsidiary corporations, Community and Anthem UM, to 
such a degree that those corporations had no separate minds, wills, or existences 
of their own.  Thus, our review of this case focuses on the second prong of the 
Belvedere test. 
B. 
Fraud or Illegal Acts versus Unjust or Inequitable Acts 
{¶ 20} We must determine how broadly to construe the language of the 
second prong of the Belvedere test, that “control over the corporation by those to 
be held liable was exercised in such a manner as to commit fraud or an illegal act 
against the person seeking to disregard the corporate entity.”  Belvedere, 67 Ohio 
St.3d 274, 617 N.E.2d 1075, paragraph three of the syllabus.  The courts of 
appeals have interpreted the phrase “fraud or an illegal act” in two different ways. 
{¶ 21} Several courts of appeals, including the Seventh District Court of 
Appeals in this case and the Third, Tenth, Eleventh, and Twelfth District Courts 
of Appeals, have liberally construed the language of the second prong.  These 
courts rely on the fact that piercing is an equitable remedy, seizing on language 
from Belvedere that piercing should occur “ ‘when it would be unjust to allow the 
shareholders to hide behind the fiction of the corporate entity.’ ”  Stypula v. 
Chandler, Geauga App. No. 2002-G-2468, 2003-Ohio-6413, at ¶ 20, quoting 
Belvedere, 67 Ohio St.3d at 287, 617 N.E.2d 1075; see also Wiencek v. Atcole 
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Co., Inc. (1996), 109 Ohio App.3d 240, 245, 671 N.E.2d 1339.  “[T]he true 
question to be asked is whether it would be unjust under the circumstances of 
each case to not pierce the corporate veil.”  Robert A. Saurber Gen. Contr. v. 
McAndrews, Butler App. No. CA2003-09-239, 2004-Ohio-6927, at ¶ 34.  See also 
Sanderson Farms, Inc. v. Gasbarro, Franklin App. No. 01AP-461, 2004-Ohio-
1460, at ¶ 38. 
{¶ 22} Because the plain language of the second prong of the Belvedere 
test imperfectly applies to this view, these courts have modified the requirement 
of “fraud or an illegal act” to allow for additional forms of misconduct.  Their 
modified version of the second prong thus requires the plaintiff to “present 
evidence that the shareholders exercised their control over the corporation in such 
a manner as to commit a fraud, illegal, or other unjust or inequitable act upon the 
person seeking to disregard the corporate entity.”  (Emphasis added.)  Wiencek, 
109 Ohio App.3d at 245, 671 N.E.2d 1339.  See also Taylor Steel, Inc. v. Keeton 
(C.A.6 2005), 417 F.3d 598, 610 (adopting this interpretation in the United States 
Court of Appeals for the Sixth Circuit).  Adding unjust or inequitable conduct to 
the second prong of the Belvedere test significantly increases the number of cases 
in which a plaintiff could pierce the corporate veil. 
{¶ 23} The Sixth District Court of Appeals has adopted a narrower view 
of the Belvedere language.  That court of appeals strictly follows the plain 
language of the second prong and limits piercing to those cases in which the 
defendant shareholder has used its control of the corporate form to commit fraud 
or an illegal act.  Collum v. Perlman (Apr. 30, 1999), Lucas App. No. L-98-1291; 
1999 WL 252725.  The Sixth District Court of Appeals has determined that the 
Third District Court of Appeals’ interpretation of the second prong in Wiencek 
“goes too far” and has noted that this court “appears to have limited the 
application of the doctrine to those situations in which ‘control over the 
corporation by those to be held liable was exercised in such a manner as to 
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commit fraud or an illegal act against the person seeking to disregard the 
corporate entity.’  (Emphasis added.)”  Id. 
{¶ 24} Under this interpretation, Dombroski would be unable to pierce the 
corporate veil to sue WellPoint and Anthem Insurance, since she has not alleged 
that they used their control over Community and Anthem UM to commit any 
fraudulent or illegal acts against her. 2 
{¶ 25} There are compelling reasons to follow the majority of the courts 
of appeals and expand the fraud-or-illegal-act test in Belvedere.  Individuals are 
normally liable for their own actions, and it makes sense that this principle should 
be considered even when a corporate form stands between the plaintiff and the 
offending shareholder. 
{¶ 26} Nevertheless, we continue to adhere to the principle that limited 
shareholder liability is the rule, see Belvedere, 67 Ohio St.3d at 287, 617 N.E.2d 
1075, and piercing the corporate veil is the “rare exception” that should only be 
“applied in the case of fraud or certain other exceptional circumstances.”  Dole 
Food Co., 538 U.S. at 475, 123 S.Ct. 1655, 155 L.Ed.2d 643.  While we noted in 
Belvedere that piercing should be allowed when it would be unjust for 
shareholders to hide behind the corporate fiction, we also stated that the test 
adopted there struck the correct balance between the guiding principles of limited 
shareholder liability and the fact that shareholders occasionally misuse the 
corporate form as a shield from liability for their own misdeeds.  Belvedere, 67 
Ohio St.3d at 287, 289, 617 N.E.2d 1075. 
{¶ 27} Limiting piercing to cases in which the shareholders used their 
complete control over the corporate form to commit specific egregious acts is key 
                                                 
2.  Dombroski argues in her brief that the tort of insurer bad faith could constitute an illegal act 
within the meaning of Belvedere.   However, our order accepting the certified conflict limited the 
parties to briefing the issue of whether the corporate veil can be pierced for “unjust or inequitable 
acts” that do not rise to the level of “fraud or an illegal act.”  116 Ohio St.3d 1472, 2008-Ohio-
153, 879 N.E.2d 781.  Therefore, her arguments in this regard will not be considered.  S.Ct.Prac.R. 
IV(3)(B). 
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to maintaining this balance.  Were we to allow piercing every time a corporation 
under the complete control of a shareholder committed an unjust or inequitable 
act, virtually every close corporation could be pierced when sued, as nearly every 
lawsuit sets forth a form of unjust or inequitable action and close corporations are 
by definition controlled by an individual or small group of shareholders.  See 
Black’s Law Dictionary (8th Ed.2004) 365.  Controlling shareholders in publicly 
traded corporations could also be subject to frequent piercing, regardless of the 
corporation’s liability and its ability to pay for the plaintiff’s injuries.  Such 
expansive liability would run contrary to the concept of limited shareholder 
liability and upset the balance struck in Belvedere.  Thus, the proposed expansion 
of the second prong of the Belvedere test to include unjust or inequitable conduct 
is simply too broad to survive exacting review. 
{¶ 28} However, having reviewed the various tests for piercing the 
corporate veil developed by other authorities, we are convinced that our 
pronouncement in Belvedere is too limited to protect other potential parties from 
the wide variety of egregious shareholder misdeeds that may occur.  Limiting 
piercing to cases of fraud or illegal acts protects the established principle of 
limited liability, but it insulates shareholders when they abuse the corporate form 
to commit acts that are as objectionable as fraud or illegality.  In view of the 
reality that shareholders could seriously misuse the corporate form and evade 
personal liability under the second prong as presently worded, we find it 
necessary to modify the second prong of the Belvedere test to allow for piercing 
in the event that egregious wrongs are committed by shareholders. 
{¶ 29} Accordingly, we hold that to fulfill the second prong of the 
Belvedere test for piercing the corporate veil, the plaintiff must demonstrate that 
the defendant shareholder exercised control over the corporation in such a manner 
as to commit fraud, an illegal act, or a similarly unlawful act.  Courts should apply 
this limited expansion cautiously toward the goal of piercing the corporate veil 
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only in instances of extreme shareholder misconduct.  The first and third prongs 
of the Belvedere test are not affected by this ruling and must still be met for a 
piercing claim to succeed. 
{¶ 30} However, even under this expanded version of the second prong of 
the Belvedere test, Dombroski’s claim fails.  Insurer bad faith is a straightforward 
tort, a basic example of unjust conduct; it does not represent the type of 
exceptional wrong that piercing is designed to remedy.  Civ.R. 12(B)(6) provides 
a suitable vehicle for dismissing such a claim.  We therefore reverse the judgment 
of the court of appeals. 
IV 
{¶ 31} For the foregoing reasons, we reverse the holding of the court of 
appeals and modify the second prong of the Belvedere test as set forth above. 
Judgment reversed. 
LUNDBERG STRATTON, O’CONNOR, O’DONNELL, LANZINGER, and CUPP, 
JJ., concur. 
PFEIFER, J., dissents. 
__________________ 
PFEIFER, J., dissenting. 
{¶ 32} Because this court never intended in Belvedere Condominium Unit 
Owners’ Assn. v. R.E. Roark Cos., Inc. (1993), 67 Ohio St.3d 274, 617 N.E.2d 
1075, to narrowly define the types of injustices that could satisfy the element of 
“fraud or an illegal act” required for piercing the corporate veil, because the vast 
majority of Ohio’s appellate districts have effectively applied a less rigid standard 
to that part of the Belvedere test, because the majority’s modification of the 
Belvedere test adds words to the test but no clarification, and because the 
violation of an insurer’s duty of good faith satisfies even the majority’s distortion 
of the Belvedere test to “fraud, an illegal act, or a similarly unlawful act,” I 
dissent. 
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I 
{¶ 33} In Belvedere, this court found that “the Sixth Circuit’s approach [in 
Bucyrus-Erie Co. v. Gen. Prods. Corp. (C.A.6, 1981), 643 F.2d 413] to piercing 
the corporate veil strikes the correct balance between the principle of limited 
shareholder liability and the reality that the corporate fiction is sometimes used by 
shareholders to protect themselves from liability for their own misdeeds.” 
Belvedere, 67 Ohio St.3d at 289, 617 N.E.2d 1075.  This court quoted the test 
enunciated in Bucyrus-Erie Co.: 
{¶ 34} “In Bucyrus-Erie, the Sixth Circuit applied Ohio law in reviewing 
jury instructions in a veil-piercing case. It held that the corporate form may be 
disregarded when ‘(1) domination and control over the corporation by those to be 
held liable is so complete that the corporation has no separate mind, will, or 
existence of its own; (2) that domination and control was used to commit fraud or 
wrong or other dishonest or unjust act, and (3) injury or unjust loss resulted to the 
plaintiff from such control and wrong.’ Id. at 418.” (Footnote omitted; emphasis 
added.)  Belvedere, 67 Ohio St.3d at 288, 617 N.E.2d 1075. 
{¶ 35} In restating the Bucyrus-Erie test in Belvedere, this court expressed 
no intent to restrictively redefine what types of acts would satisfy the second 
element of the test enunciated in Bucyrus-Erie.  Instead, this court truncated 
Bucyrus-Erie’s phrase “fraud or wrong or other dishonest or unjust act” to “fraud 
or an illegal act.”  Nothing in Belvedere indicates that this court felt that Bucyrus-
Erie was overly expansive in setting forth what kind of corporate misdeeds might 
be necessary to pierce the corporate veil.  Indeed, the court made clear that it was 
the injustice of the underlying shareholders’ acts that was significant: “[T]he 'veil' 
of the corporation can be ‘pierced’ and individual shareholders held liable for 
corporate misdeeds when it would be unjust to allow the shareholders to hide 
behind the fiction of the corporate entity.” (Emphasis added.) Id. at 287, 617 
N.E.2d 1075.  Elsewhere in Belvedere, the court cited a corporation’s “fraud or 
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other wrongs” that could lead to liability for shareholders. Id. at 288.  A leading 
treatise interprets this court’s decision in Belvedere thusly: “[T]he Ohio Supreme 
Court has now clearly adopted the Bucyrus-Erie rule that it is not necessary to 
prove fraud to pierce the veil.” Presser, Piercing the Corporate Veil (2004), 2-449, 
Section 2:39.  That is, until today. 
II 
{¶ 36} As the majority sets forth, most Ohio appellate courts that have 
addressed the issue have held that the Belvedere element of “fraud or an illegal 
act” should not be rigidly and mechanically construed to include only fraud or 
criminal acts.  For instance, the court in Wiencek v. Atcole Co., Inc. (1996), 109 
Ohio App.3d 240, 245, 671 N.E.2d 1339, held that the second element of 
Belvedere is satisfied where the corporation has committed a “fraud, illegal, or 
other unjust or inequitable act upon the person seeking to disregard the corporate 
entity.”  Ohio corporations have well withstood Ohio appellate courts’ expansive 
view – a view consistent with Bucyrus-Erie – of the type of corporate activity that 
satisfies the second element of Belvedere.  Piercing the corporate veil remains 
difficult to achieve; we accepted this case not to cure an epidemic of veil 
piercings but instead because one Ohio appellate district stood against the tide of 
Ohio appellate law, creating a conflict.  Instead of resolving the conflict, this court 
has muddied the waters. 
III 
{¶ 37} “Now that the Ohio Supreme Court’s Belvedere opinion has 
clearly addressed the veil-piercing issue there should be much less uncertainty 
about the appropriate Ohio tests.  They are those to be found in Bucyrus-Erie and 
its progeny.” (Footnote omitted.) Presser, Piercing the Corporate Veil, at 2-454-
455, Section 2:39. 
{¶ 38} To the contrary, today the majority abrogates this court’s previous 
reliance on Bucyrus-Erie and thus installs a much more restrictive test than it 
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originally set forth in Belvedere.  Ironically, the majority claims to be fine-tuning 
Belvedere’s second element to cover “egregious wrongs” perpetrated by 
shareholders as it simultaneously greatly restricts the kinds of claims that can 
successfully be brought pursuant to Belvedere. 
{¶ 39} The majority believes that it expands on the Belvedere element of a 
“fraud or an illegal act” by including the redundancy “or a similarly unlawful 
act.”  Thus, not only may an “illegal act” satisfy the second element of the 
Belvedere test, but so will an act that is similarly unlawful to an illegal act.  The 
new language seems to be pulled from the air.  Is there a notable distinction 
between an “unlawful” and an “illegal” act?  Not that the majority identifies.  The 
words appear to be two ways of saying the same thing.  Potato, potahto, illegal, 
unlawful – let’s call the whole thing off. 
{¶ 40} The majority would have been better served by adopting 
Tennessee’s requirement of a “fraud or wrong, to perpetuate the violation of a 
statutory or other positive legal duty, or a dishonest and unjust act.” Continental 
Bankers Life Ins. Co. of the South v. Bank of Alamo (Tenn.1979), 578 S.W.2d 
625, 632, or the simple standard set forth in many states requiring an “injustice.” 
Presser, Piercing the Corporate Veil, 2-298–299, Section 2:26.  Those standards, 
and the standards already set forth by Ohio appellate courts, provide useful 
distinctions between the types of acts that might lead to a piercing of the corporate 
veil.  Today, the majority adds words but no distinctions, and by whitewashing 
Belvedere’s reliance on Bucyrus-Erie, places Ohio within the most restrictive 
jurisdictions for proving a case for piercing of the corporate veil.  That was never 
this court’s intent in Belvedere. 
IV 
{¶ 41} The majority finds that even under its “expanded” version of the 
Belvedere test, Dombroski’s claim fails.  “Insurer bad faith is a straightforward 
tort, a basic example of unjust conduct; it does not represent the type of 
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exceptional wrong that piercing is designed to remedy.” Majority opinion, ¶ 30.  
To the contrary, insurer bad faith is an exceptional wrong.  “In contract actions, 
the corporate fiction generally will not be disregarded in cases of simple negligent 
performance of contractual duties.” 1 Fletcher, Cyclopedia of the Law of 
Corporations (2005), 271, Section 41.85, 271.  However, in a bad-faith case, what 
ordinarily would be a breach-of-contract claim is transformed into a tort action 
because of the unreasonableness of the insurer’s behavior. Zoppo v. Homestead 
Ins. Co. (1994), 71 Ohio St.3d 552, 644 N.E.2d 397, paragraph one of the 
syllabus. The insurer guilty of bad faith breaches a legal duty owed to the insured.  
I would hold that the breach of a legal duty constitutes an illegal or similarly 
unlawful act. 
V 
{¶ 42} For all of the above reasons, and because today’s decision reverses 
the development of Ohio law, I dissent. 
__________________ 
Robert Gray Palmer Co., L.P.A., and Robert G. Palmer, for appellee. 
Vorys, Sater, Seymour & Pease, L.L.P., and Suzanne K. Richards, Robert 
N. Webner, and Michael J. Hendershot; and Thornburg, Bean & Glick and 
Charles H. Bean, for appellants. 
Linda S. Woggon, urging reversal for amici curiae Ohio Chamber of 
Commerce, Ohio Council of Retail Merchants, Ohio Chapter of the National 
Federation of Independent Business, and Ohio Farm Bureau Federation. 
______________________