THE STATE OF SOUTH CAROLINA In The Supreme Court

Kyle Pertuis, Respondent,

v.

Front Roe Restaurants, Inc ., Beachfront Foods, Inc., Lake Point Restaurants, Inc., M ark Hammond and Larkin Hammond, Petitioners.

Appellate Case No. 2016-000749

ON WRIT OF CERTIORARI TO THE COURT O F APPEALS

Appeal from Greenville County Edward W. Miller, Circuit Court Judge

Opinion No. 27823 Heard November 14, 2017 – Filed July 5, 2018

REVERSED IN PART, VACATED IN PART, AND

AFFIRMED AS MODIFIED IN PART

Blake A. Hewitt, of Bluestein Thompson Sullivan, LLC,

of Columbia and Curtis Stod ghill, of Stodghill Law Firm, of Greenville, for Petitioners.

Robert C. Wilson, Jr., of Greenville, for Respondent.

ACTING CHIEF JUSTICE KITTREDGE: Petitioners Mark and LarkinHammond built and operate d several successful restaurants in La ke Lure, North Carolina, and Greenville, South Car olina. The Hammonds hired Respondent Kyle Pertuis to manage the restaurant s, and as part of his compensat ion, Pertuis acquired minority ownership interests in the three restaurants. Pertuis eventually decided to leave the business, and this dis pute primarily concerns the per centage and valuation of Pertuis's ownership interests in the three restaur ants. Following a bench trial, the trial court fo und the three corporate entities should be amalgamated into a "de facto partnership" operating out of Greenville, South Carolina. The trial court further awarded Pertuis a 10% ownership interest in the two North Carolina restaurants, a 7.2% ownership interest in the South Carolina re staurant, and a total of $99,117 in corporate distribut ions from the restaurants. Th e trial court further concluded Pertuis was an oppressed minority shareholder, valued each of the three corporations, and ordered a buyout of Pertuis's shares. The court of appeals

affirmed. Pertuis v. Front Roe Restaurants, Inc ., Op. No. 2016-UP-091 (S.C. Ct. App. filed Feb. 24, 2016). For t he reasons explained below, we reverse in part, vacate in part, and affirm as modified in part.

I.

The Hammonds, who are residents of Lake Lure, No rth Carolina, f ormed Lake Point Restaurants, Inc. (Lake P oint), a North Carolina S-corpor ation, in 1998 and purchased a restaurant on the water at Lake Lure, North Carolin a. The Hammonds

were the sole shareholders with equal ownership in the corporation. The restaurant purchase was financed through pe rsonal contributions by the Ham monds, ownerfinancing, and third-party loans personally guaranteed by the H ammonds. The business operated as Larkin's on the Lake and remains a viable business today.

In 2000, the Hammonds hired Pertuis as a manager of the restaur ant. As part of Pertuis's compensation package , the parties agreed Pertuis woul d earn a base salary plus bonuses based on profitabi lity benchmarks, along with a 10 % share in the

business over the course of a fiv e-year period at an agreed ves ting schedule. The vesting schedule was time-based to incentivize Pertuis to remai n with the company for a period of time. In accord ance with the vesting schedule, by 2007, Pertuis

owned a 10% share in Lake Point.

In 2001, the Hammonds formed Be achfront Foods, Inc. (Beachfront ), which was also a North Carolina S-corpora tion, for the purpose of purchas ing another

restaurant on Lake Lure. As with Lake Point, the Hammonds were the sole shareholders with equal ownershi p interests; the restaurant pur chase was financedthrough personal contributions by the Hammonds, owner-financing , and thirdparty loans personally guaranteed by the Hammonds; and the part ies agreed upon a five-year vesting schedule for Pe rtuis to attain a 10% ownershi p interest. The

second restaurant was renovated a nd re-branded as MaLarKie's, which represented a combination of the parties' f irst names—Mark Hammond, Larkin Hammond, and Kyle Pertuis. When Beachfront wa s formed, Pertuis's job title became "Managing Partner," as his duties include d oversight of both restaurants. Along with the increase in job duties, Pertuis's compensation expanded. Also as with Lake Point, by 2007, Pertuis owned a 10% sha re in Beachfront. For various reasons, MaLarKie's was not as successful a s Larkin's on the Lake, and e ventually

Beachfront sold MaLarkie's and began operating a casual dining restaurant in nearby Columbus, North Carolina. This restaurant, Larkin's Car olina Grill, was the least profitable of the three re staurants at the time of trial, with a negative net income reported on its income t ax returns each year from 2008–2 012.

In 2005, the Hammonds formed Fr ont Roe Restaurants, Inc. (Front Roe), a South Carolina S-Corporation and pur chased Rene's Steakhouse in Green ville, South

Carolina. As with the other two corporations at the time of th eir formation, the Hammonds were the sole shareholders of Front Roe with equal own ership interests, and the restaurant purchase was financed through per sonal contributions by the Hammonds and third-party loans personally guaranteed by the Hammonds. The business currently operates as Larkin's on the River and, a t the time of trial, was the most profitable of the three corporations.

Several months after Front Roe was formed, Pertuis moved to Gre enville and traveled to each of the restaurants weekly as part of his manag erial duties. Although the parties agreed upon a vesting schedule for Pertuis to acquire up to a 10% interest in Front Roe, by a ll accounts this agreement, unli ke the others, was based upon the restaurant's profitability benchmarks rather tha n length of service. Although none of the parties could produce a written vesting schedule, Mark Hammond testified the agreement was for Pertuis to receive a 1% interest the year Front Roe first became profitable and an additional 9% once the company achieved a net operating profit of $500,000.

By 2007, Pertuis owned a 1% shar e of Front Roe; however, both H ammond and Pertuis agreed that, at the time of trial, Front Roe had never reached the $500,000 profit benchmark. This fact is confirmed by Front Roe's tax re turns. Pertuis has never made any capital contributi ons or personal loans to the c ompanies, either during or after his employment.By late 2008 to early 2009, the p arties began discussing differ ent compensation packages to allow Pertuis to reach a 10% ownership interest in Front Roe. Despite multiple conversations back and f orth between Pertuis and Hammo nd, and the involvement of attorneys and ta x professionals, Pertuis eventua lly became frustrated with the perceived delay in the process of formalizi ng what he hoped would be a new agreement. In early October 2009, Pertuis took some time off

from the business to consider h is options. In a lengthy email to the Hammonds,

Pertuis cited the sources of hi s discontent as, among other thi ngs, feeling like his investment of time and energy in to the business was not paying off financially, industry burnout, and trouble ach ieving work-life balance. Ult imately, the parties split ways, although it is unclear from the record whether the decision was Pertuis's, the Hammonds', or a mutual one.

After the parties' unsuccessful attempts to negotiate the Hammo nds' purchase of Pertuis's shares of the businesses, which was exacerbated by di sagreements over
the value of Pertuis's shares an d the extent to which Pertuis was entitled to certain business records, suit was filed. 1 Essentially, Pertuis ar gued he was an oppressed minority shareholder who had been "squeezed out" of the busines s in bad faith and that he was therefore entitled to a forced buyout of his shares , including a 10% ownership share in Front Roe.

Following a bench trial, the trial court found the three corpor ate entities—Lake Point (NC), Beachfront (NC), and Front Roe (SC)—should be amalg amated into a single business enterprise located in and operating out of Gree nville, South Carolina. The trial court further found Pertuis was an oppress ed minority

shareholder and awarded Pertuis a 7.2% ownership interest in Front Roe, as well as $99,117 in unpaid corporate distri butions from Lake Point and F ront Roe. The trial court valued each of the three corporations and ordered a buyout of Pertuis's

1 This lawsuit was initially filed by Front Roe as a declaratory judgment action, seeking a declaration that it di d not have to turn over its cor porate records to Pertuis without some sort of protection against the risk Pertui s might divulge confidential or "proprietary" in formation contained therein. T hereafter, Pertuis filed counterclaims and third-part y claims; as a result, the pa rties were realigned, and the caption was changed to its current form.shares by Petitioners. 2 The court of appeals affirmed. Pertuis v. Front Roe
Restaurants, Inc ., Op. No. 2016-UP-091 (S.C. Ct. App. filed Feb. 24, 2016). Th is

Court issued a writ of certiora ri to review the court of appeal s' decision.

Petitioners now argue t he court of appeals e rred in affirming t he trial court's finding that the three corporatio ns operated as a single busine ss enterprise with its

locus in Greenville and that the c ourt of appeals erred in find ing this argument to be unpreserved. Petitioners also contend the court of appeals erred in affirming the

trial court's decision to award a 7.2% ownership interest in Fr ont Roe and $99,117

in shareholder distributions t o Petitioner; in valuing Beachfro nt at $0 rather than assigning it a negative value; and in finding Pertuis was an op pressed minority

shareholder.

II.

An action for stockholder oppression is one in equity. Ballard v. Roberson , 399

S.C. 588, 593, 733 S.E.2d 107, 109 (2012) (citation omitted). Therefore, this Court may find facts according to its own view of the evidence. Id . (citing S.C. Dept. of Transp. v. Horry Cty. , 391 S.C. 76, 81, 705 S.E.2d 21, 24 (2011)).

A. Amalgamation or Single Business Enterprise

Petitioners claim the court of appeals erred in affirming the t rial court's finding that amalgamation of the three cor porate entities was warranted. We agree. 3 However,

2 It was unclear from the trial co urt's order whether the buyout of Pertuis's shares was to be by the Hammonds o r the corporate entities. See N.C. Gen. Stat. § 55-14

- 31(d) (allowing a corporate entity to repurchase the shares of an oppressed minority shareholder to avoid the harsh remedy of judicial diss olution); S.C. Code Ann. § 33-18-420(a) (allowing si milar purchase by either the co rporation or one or more of its shareholders).

3 The court of appeals erred in c oncluding this issue was not pr eserved for appellate review; further, it was an abuse of discretion for th e court of appeals to

raise this issue sua sponte then to deny Petitioners' request to supplement the record with materials in response to the court of appeals' questions at oral argument, particularly where couns el for Pertuis conceded the H ammonds' challenge was preserved. "Judici al economy is not served when a case, ripe forbefore we reach the merits of this claim, we must first sort th rough the complicated

issue of whether South Carolina or North Carolina law governs our evaluation of this veil-piercing theory.

1. Choice of Law

At the outset, we acknowledge th e trial court's finding that these three entities should be amalgamated into a single business enterprise with it s locus in Greenville, South Carolina, is f oundational to the consideratio n of all the remaining issues, including the issues of shareholder oppression, Pertuis's ownership percentages, and valuation issues. However, because Lake Point and

Beachfront are North Carolina co rporations that are not registered to do business in South Carolina, and based on th e record, do not, in fact, condu ct business in South Carolina, this preliminary issue presents a vexing choice of la w question as to whether South Carolina or North Carolina law governs our inquir y.

decision, is decided on a procedural technicality of this natur e. In the interests of justice and fair play, cases s hould be decided on the merits wh en deficiencies of this nature can be easily corrected." Silk v. Terrill , 898 S.W.2d 764, 766 (Tex. 1995) (citation omitted) (finding an intermediate appellate cou rt abused its discretion in denying a party's motion to supplement the record then concluding the resulting insufficiencies in the record procedurally barred the substantive consideration of the legal issues where the omitted documents h ad not previously been at issue and the appellate court was not in any way misled or its decision hindered or delayed); see also Atl. Coast Builders & Contractors, LLC v. Lewis

, 398 S.C. 323, 329, 730 S.E.2d 282, 285 (2012) (expressing concern about the "over-zealous application" of "l ong-standing error preservation rules" and discouraging a "hypertechnical application" of those rules resu lting in appellate arguments being procedurally barred); Herron v. Century BMW , 395 S.C. 461, 465, 719 S.E.2d 640, 642 (2011) ("Issue preservation rules are designed to give the trial court a fair opportunity t o rule on the issues, and thus provide us with a platform for meaningful appellat e review . . . . Imposing such a requirement on the appellant is meant to enable the lower court to rule properly a fter it has considered all relevant facts, law, and argum ents." (quotation marks and c itations omitted)); Wilder Corp. v. Wilke , 330 S.C. 71, 77, 497 S.E. 2d 731, 734 (1998) (citation omitted) ("Post-trial motions are not necessary to preserve iss ues that have been ruled upon at trial; they are used to preserve those that have been raised to the trial court but not yet ruled upon by it.")."The choice of law rule general ly applied to corporate law issu es is the internal affairs doctrine, which provides that the internal matters of corporate governance are governed by the law of the st ate of incorporation." 1 Will iam Meade Fletcher et al., Fletcher Cyclopedia of the Law of Corporations § 43.72 (perm. ed., rev. vol. 2015). The "internal affairs" of a corporation consist of "the relations inter se of the corporation, its shareholde rs, directors, officers or agents." Restatement (Second) of Conflict of Laws § 302 cmt. a (1971). "States normally look to the State of a business' incorporation for the law that provides th e relevant corporate governance general st andard of care." Atherton v. F.D.I.C. , 519 U.S. 213, 224 (1997) (citation omitted).

In South Carolina, our Legislatu re has made clear that this sta te is "not authorize[d]" to "regulate the o rganization or internal affairs of a foreign corporation" even if the corporation is registered to conduc t business in South Carolina, which Lake Point and Beachfront are not. S.C. Code A nn. § 33-15

- 105(c) (2006); see also Edgar v. MITE Corp. , 457 U.S. 624, 645 (1982) (citation omitted) ("The internal affairs doctrine is a conflict of laws principle which recognizes that only one State s hould have the authority to reg ulate a corporation's internal affairs—matters peculia r to the relationships among or between the corporation and its current off icers, directors, and shareholde rs—because otherwise a corporation could be faced with conflicting demands.").

That being said, although "[v]eil piercing cases implicate corp orate law[, they] involve disputes that reach bey ond the confines of the corporat ion." 1 William Meade Fletcher et al., Fletcher Cyclopedia of the Law of Corporations § 43.72 (perm. ed., rev. vol. 2015). Inde ed, this threshold amalgamation issue is not as much a question of the inner-workings of foreign corporations a s it is an

assessment of whether these en tities actually operate as a sing le business enterprise, and thus should be t reated as a single entity. Fur ther, one of the three corporate entities, Front Roe, is a South Carolina corporation; much of the conduct at issue occurred, at least in p art, in South Carolina; and Per tuis, the minority shareholder, is a South Carolin a resident. Accordingly, we con clude the application of South Carolina la w is appropriate and that the i nternal affairs

doctrine does not bar our review of this issue. See TAC-Critical Sys., Inc. v. Integrated Facility Sys., Inc ., 808 F. Supp. 2d 60, 65 (D.D.C. 2011) (explaining that resolving choice-of-law issues in veil-piercing cases invo lves an evaluation of the governmental policies underl ying the conflicting laws and a determination of the extent to which a jurisdic tion's policies would be advanced by having its law applied to the facts of t he case under review); cf

. Robinson v. Estate of Harris , 388S.C. 645, 656, 698 S.E.2d 229, 236 (2010) ("Courts have the inh erent power to do all things reasonably necessary t o ensure that just results are reached to the fullest extent possible." (quotation ma rks and citation omitted)). Hav ing determined South Carolina law governs our evaluation of the amalgamation c laim, we turn

now to the merits.

2. Amalgamation or Single Business Enterprise Theory

The amalgamation of interests theory was first recognized in So uth Carolina by the court of appeals in Kincaid v. Landing Development Corp ., 289 S.C. 89, 344 S.E.2d 869 (Ct. App. 1986), which i nvolved three related corpor ations (a development corporation, a management corporation, and a constr uction corporation) that were sued for negligent construction and brea ch of warranty. The management corporation argued it was entitled to a directed ver dict in its favor because it was merely the marketing and sales company; however, the record in

Kincaid revealed that, in addition to sha ring owners and corporate off icers, the three companies shared a locati on, all companies were overseen by the management company, and business letterhead identified the mana gement company as "A Development, Cons truction, Sales, and Property Ma nagement Company." Id . at 96, 344 S.E.2d at 874. Based on that evidence, the court of appeals affirmed the trial court' s finding that the corporate e ntities were properly regarded as a single entity becaus e the evidence at trial showe d "an amalgamation of corporate interests, entitie s, and activities so as to blur the legal distinction between the corporations and their activities." Id. (quoting the trial court order).

Subsequently, this so-called amal gamation of interests theory w as briefly referenced (but not examined) by this Court in Kennedy v. Columbia Lumber and Manufacturing Co ., 299 S.C. 335, 340–41, 384 S.E. 2d 730, 734 (1989) (noting a "lender may be liable if it is s o amalgamated with the developer or builder so as to blur its legal distinction." (citing Kincaid

, 289 S.C. 89, 344 S.E.2d 869)). And it

was also addressed in Mid-South Management Co. v. Sherwood Development Corp ., in which the court of appeals found the theory did not apply to the facts of

that case because there was no evidence in the record that the corporate entities'

identities or interests were blu rred or could be confused with one another. 374

S.C. 588, 605, 649 S.E.2d 135, 144–45 (Ct. App. 2007) (per curi am). Most recently, the amalgamation theory was addressed by the court of appeals in a pair

of construction defect cases— Magnolia North Property Owners' Association v. Heritage Communities, Inc. , 397 S.C. 348, 725 S.E. 2d 112 (Ct. App. 2012), and Pope v. Heritage Communities, Inc ., 395 S.C. 404, 717 S. E.2d 765 (Ct. App.2011). 4

The parties have not cited, and our research has not found, a d ecision of this Court examining the amalgamation of int erests theory in detail. Howe ver, under this theory, as it has been rec ognized in other states, 5 where multiple corporations have

4 This Court dismissed certiorari as improvidently granted in bo th those cases on September, 30, 2015—just two weeks before the oral argument bef ore the court of appeals in this case. See Magnolia North Prop. Owners' Ass'n v. Heritage
Communities, Inc. , 414 S.C. 198, 777 S.E.2d 831 (2015), and Pope v. Heritage
Communities, Inc. , 414 S.C. 199, 777 S.E.2d 832 (2015).

5 See Las Palmas Assocs. v. Las Palmas Ctr. Assocs. , 235 Cal. App. 3d 1220, 1249–50, 1 Cal. Rptr. 2d 301, 301 (C t. App. 1991) ("Generally, alter ego liability is reserved for the parent-sub sidiary relationship. However, u nder the singleenterprise rule, liability can be found between sister companie s. The theory has

been described as follows: In e ffect what happens is that the c ourt, for sufficient reason, has determined that though there are two or more person alities, there is but one enterprise; and that this en terprise has been so handled th at it should respond, as a whole, for the debts of cer tain component elements of it." (quotations and citation omitted)); Green v. Champion Ins. Co. , 577 So. 2d 249, 257 (La. Ct. App. 1991) ("When corporations represe nt precisely the same single i nterest, the court is free to disregard their separate corporate identity. . . . Thi s is especially true where the corporations constitute a si ngle business. Courts have bee n unwilling to allow affiliated corporations that are not directly involved to escap e liability simply because of the business fragmen tation." (citations omitted)); SSP Partners v. Gladstrong Invs. (USA) Corp. , 275 S.W.3d 444, 450–51 (Tex. 2008) (noting "[w]hen corporations are not operated as separate entities but rather integrate their

resources to achieve a common business purpose, each constituen t corporation may

be held liable for debts incurre d in pursuit of that business purpose. Factors to be considered in determining whethe r the constituent corporations have not been maintained as separa te entities include but are not limited to the following: common employees; comm on offices; centralized accounting; payment of wages by one corporation to another corp oration's employees; common b usiness name; services rendered by the employ ees of one corporation on behalf of another corporation; undocumented tran sfers of funds between corporatio ns; and unclear allocation of profits and losses between corporations," but cau tioning that "the limitation on liability afforded by the corporate structure can be ignored only whenunified their business operations and resources to achieve a co mmon business purpose and where adherence to t he fiction of separate corporat e identities would defeat justice, courts have refu sed to recognize the corporatio ns' separateness, instead regarding them as a sing le enterprise-in-fact, to the e xtent the specific facts of a particular situation warrant.

Although no other juri sdiction seems to use the term "amalgamat ion," other states have indeed recognized that, in so me instances outside of the traditional veilpiercing context, certain enter prises choose to conduct their b usiness in such a way that the law should no longer regard the various corporations as distinct entities. 6

Our research reveals that the underlying rationale for other st ates' decisions to treat various corporations as a singl e business entity varies; as one scholar has explained:

[J]udicial erection of a new [ aggregate enterprise] entity occu rs in situations where the corporate personality (as embodied in its charter, books and so forth) does not correspond to the actual enterpris e, but merely to a fragment of it. The r esult is to construct a new a ggregate of assets and liabilities. Typical cases appear where a partne rship or a central corporation owns the con trolling interest in one or mor e other corporations, but has so handled t hem that they have ceased to represent a separate enterprise and have become , as a business matter, more or less indistinguishable p arts of a larger enterprise. T he decisions disregard the paper corporate persona lities and base liability on the assets of the enterprise . The reasoning by which courts reach

this result varies: it is sometim es said that one corporation h as become

the corporate form has been used as part of a basically unfair device to achieve an inequitable result" (footnotes , quotation marks, and citations omitted)).

6 See Stephen B. Presser, The Bogalusa Explosion, "Single Business Enterprise," "Alter Ego," and Other Errors: Acade mics, Economics, Democracy, and Shareholder Limited Liability: Back Towa rds A Unitary "Abuse" Theory of Piercing the Corporate Veil , 100 Nw. U. L. Rev. 405, 422–23 (2006) (noting the other jurisdictions which have " recognized the idea of imposing liability on or finding jurisdiction over a 'singl e business enterprise' involv ing multiple corporations called by that name or something similar" include Arkansas, California, Connecticut, Indiana, Louisiana, Massachusetts, Mis sissippi, New Jersey, New York, North Carolina , Puerto Rico, Texas, Virginia, and Washington).a mere "agency" of another; or th at its operations have been so intermingled that it has lost its identity; or that the busines s arrangements indicate that it has become a "mere instrumentalit y."

. . . .

This category of cases stands s till more squarely on the founda tion of economic enterprise-fact. The c ourts disregard the corporate f iction specifically because it has parted company with the enterprise-fact, for whose furtherance the corporati on was created; and, having got that far, they then take the further step of ascertaining what is th e actual enterprise-fact and attach the c onsequences of the acts of the component individuals or corpora tions to that enterprise entity , to the

extent that the economic outlines of the situation warrant or r equire.

Adolf A. Berle, Jr., The Theory of Enterprise Entity , 47 Colum. L. Rev. 343, 348 (1947).

Indeed, at least fourteen sta tes around the country recognize s ome sort of single business enterprise theory. See Stephen B. Presser, The Bogalusa Explosion, "Single Business Enterprise," "Alte r Ego," and Other Errors: Academics, Economics, Democracy, and Shareholder Limited Liability: Back Towards A Unitary "Abuse" Theory of Piercing the Corporate Veil , 100 Nw. U. L. Rev. 405, 422–23 (2006) (noting ot her jurisdictions). It also appears virtually all of these states require evidence of some sort of injustice or abuse of t he corporate form to warrant disregarding the distin ct corporate entities and treati ng the businesses as a single enterprise. As the Texas Supreme Court has put it:

Creation of affiliated corpora tions to limit liability while pu rsuing common goals lies firmly within t he law and is commonplace. We have never held corporations liable for each other's obligation s merely

because of centralized control , mutual purposes, and shared fin ances. There must also be evidence of abuse, or . . . injustice and in equity. By "injustice" and "inequity" we do not mean a subjective perce ption of unfairness by an individual j udge or juror; rather, these wo rds are

used . . . as shorthand references for the kinds of abuse, spec ifically identified, that the corporate st ructure should not shield—fraud, evasion of existing obligations , circumvention of statutes, monopolization, criminal conduct, and the like. Such abuse isnecessary before disregarding th e existence of a corporation as a separate entity. Any other rule w ould seriously compromise wha t we have called a "bedrock principle of corporate law"—that a legit imate purpose for forming a corporati on is to limit individual liabil ity for the corporation's obligations.

Disregarding the corporate struct ure involves two consideration s. One is the relationship between two entities . . . . The other con sideration

is whether the entities' use o f limited liability was illegitim ate.

SSP Partners v. Gladstrong Invs. (USA) Corp. , 275 S.W.3d 444, 455 (Tex. 2008). We agree with the reasoning of the Texas Supreme Court.

We formally recognize today this single business enterprise the ory, and in doing so, we acknowledge that corporati ons are often formed for the p urpose of shielding

shareholders from individual liability; there is nothing remote ly nefarious in doing that. For this reason, the singl e business enterprise theory r equires a showing of

more than the various entities' operations are intertwined. Co mbining multiple corporate entities into a single business enterprise requires further evidence of bad faith, abuse, fraud, wrongdoing, or injustice resulting from the blurring of the entities' legal distinctions.

As with other methods of piercing the corporate form that have previously been recognized in South Carolina, equitable principles govern the application of the single business enterprise reme dy, and this doctrine "is not to be applied without

substantial reflection." Drury Dev. Corp. v. Found. Ins. Co. , 380 S.C. 97, 101, 668 S.E.2d 798, 800 (2008) (quoting Sturkie v. Sifly , 280 S.C. 453, 457, 313 S.E.2d 316, 318 (Ct. App. 1984)). "If any general rule can be laid do wn, it is that a corporation will be looked upon as a legal entity until suffici ent reason to the contrary appears; but when the notion of legal entity is used t o protect fraud, justify wrong, or defeat public policy, t he law will regard the corporation as an association of persons." Id. "The party seeking to pierce the corporate veil has the burde n of proving that the doctrin e should be applied." Id.

Here, the trial court found amalgamation was proper because the three entities had

the same shareholders and the sa me managing partner (Pertuis) w ho oversaw all

three restaurants. The trial c ourt also found "there had been considerable movement of corporate funds between the three corporate Defenda nts, for which Defendants did not produce any documentation in the record of t his case," andnoted the three restaurants shar ed a website. The trial court also found the parties had disregarded corporate form alities, including shareholder an d board of directors meetings, in addition to the conve yance of a boat from the Hamm onds to Pertuis "without any corporate formality . . . to avoid liability and h igh insurance premiums." The trial court conc luded: "Accordingly, this Cour t finds and concludes, applying the standards articulated in Magnolia North Prop. Owners Ass'n v. Heritage Communities, Inc ., 725 SE2d 112, 397 SC 348 [sic] (Ct. App. 2012), that [the Hammonds] and [P ertuis] operated the three corporate Defendants

as a de facto partnership of the corporate entities."

The court of appeals misconstrue d both the trial court's holdin g and Petitioners' claims of error. Specifically, t he court of appeals concluded that "amalgamation" and a "de facto partnership" were two separate legal concepts a nd that the trial

court had found the three entities were a de facto partnership— not an amalgamated corporate entity. In affirming th e trial court's purported de facto partnership finding, the court of appeals noted evidence that the three res taurants shared personnel (including Pertuis as g eneral managing partner, who t ravelled to all three restaurants weekly) and that several emails among the parties r eferred to the relationship between Pertuis a nd the Hammonds as a "partnership ."

We agree with Petitioners that th e trial court's finding was on e of amalgamation, despite its use of the phrase "de facto partnership," and we re verse the court of appeals. 7 Further, we find the trial cour t's analysis not only failed t o assign the burden of proof to Pertuis, as th e party seeking amalgamation, but also overlooked the corporations' status as S-Cor porations, which are statutori ly permitted to disregard the very corporate fo rmalities identified by the tria l court as lacking. 8
See, e.g ., S.C. Code Ann. § 33-18-200 to -210 (authorizing elimination of the requirement of a board of directors); Id . § 33-18-220 (authorizing an S-Corporation not to adopt bylaws); Id . § 33-18-230 (authorizing an S-Corporation not to hold an annual meeting). The Hammonds' fa ilure to strictly comply with corporate

7 Although not raised by the partie s, we note it is unclear unde r what circumstances, if any, this equ itable veil-piercing remedy woul d be available or appropriate in an acti on among shareholders.

8 See South Carolina Statutory Close Corporation Suppl ement, S.C. Co de Ann. §§ 33-18-101 to - 500 (2006).formalities was expressly author ized by statute, and our thorou gh review of the extensive record yields no evid ence of bad faith by the Hammond s. Thus, it was

error to consider these three d istinct corporations as a single business enterprise. 9

Properly viewing these corporati ons as the three distinct entit ies they are, we

further conclude that the intern al affairs doctrine precludes c onsideration of any remaining issues as to the North Carolina corporations. 10 We therefore reverse the decision of the court of appeals and we vacate the trial court' s decisions as they

relate to Beachfront and Lake P oint. Further, we affirm the fi nding that Pertuis is entitled to unpaid distributions from Front Roe, but we modify the amount awarded to $14,142, which removes the fund s attributable to the North C arolina corporations and limits the award to include only funds attributable to the South Carolina corporation.

B. Percentage of Pertuis' s Shares in Front Roe

Petitioners further contend the court of appeals erred in affir ming the trial court's award of a 7.2% ownership intere st in Front Roe to Pertuis. We agree and reverse.

It is undisputed Pertuis never rec eived any share certificates for his ownership interest in Front Roe. The corpor ation's tax returns from year s 2005 through 2012 indicated that, from 2007 forward, Pertuis's ownership interest in Front Roe was

1%. 11 It is further undisputed that Pe rtuis's claim to a 10% owners hip interest in

9 In light of this disposition, we n eed not reach the issue of w hether the court of appeals erred in affirming the tr ial court's finding that the locus of the "de facto partnership" was Gree nville, South Carolina. Futch v. McAllister Towing of Georgetown, Inc. , 335 S.C. 598, 613, 518 S.E .2d 591, 598 (1999) (citation omitted) (explaining an appellate court need not address remain ing issues when disposition of prior i ssue is dispositive).

10 In light of this finding, we n eed not reach the issue of wheth er the court of appeals erred in affirming the trial court's finding of a $0 va lue for Beachfront.

Futch , 335 S.C. at 613, 518 S.E.2d at 598.

11 The trial court took judicial notice of I.R.C. § 6037, which r equires a shareholder of an S-Corporation to notify th e IRS if the information listed on the corporation's tax return is inaccurate. The pa rties further stipulated that Pertuis had received the requisite K-1 forms but had made no notification to the IRS of any inconsistencies.Front Roe was tied to profitabilit y benchmarks for that restaur ant. Pertuis's reliance on e-mail exchanges with Mark Hammond are unavailing.

Pertuis testified that, as to t he vesting schedule for his inte rest in Front Roe, Pertuis's ownership interest was based on certain unidentified profit margin goals; Pertuis explained, "There was an initial letter similar to form of this [sic] around a creative way to structure som ething. . . . It had a proposed w ay to do things going forward that we were going to so lidify at a later date." Howev er, Pertuis stated on

direct examination:

Q. And at any time did you have a ny clear understanding about w hat it was going to take for you to b e vested in an increased amoun t of ownership in the River [restau rant operated by Front Roe]?

A. No, I didn't have clarity on th at other than that original document that was put together just kind of saying, hey, this is how we will structure [vesting.]

Pertuis further testified that h e eventually became frustrated with the lack of details and approached the Hammonds about "formalizing our agreement wi th the vesting

schedule at the River."

Pertuis relied upon a series of emails between Pertuis and Hamm ond in June 2009 regarding changes to Pertuis's c ompensation package. Specifica lly, Pertuis argued

those emails constituted an offe r by Hammond, a counteroffer by Pertuis, and an acceptance by Hammond. However, none of those emails reference d the specific profitability benchmark required for Pertuis to receive 10% own ership of Front Roe; rather, the purported "offe r" and "counteroffer" both incl uded language indicating the profit margin had not yet reached the set milest one—whatever it

was. 12

12 Specifically, Hammond's email stated "If we go with [compensat ion] Option A, we will extend the original [ves ting] timeline on the River int o 2009 if the final

numbers for 2008 fall short of wh at you need under the original agreement to get you to the 10% ownership across the board." Likewise, in his "counteroffer" email, Pertuis stated, "If I did not achieve 10% ownership in 2 008, we will extend current program through 2009 in order to equalize current owner ship across the

board."The only evidence in the record of the specific profit margin d ollar amount required for Pertuis to achieve a 10% ownership interest was Ha mmond's testimony that Pertuis "was granted one percent for when Front Roe turned profitable . . . and then an add itional nine percent once the c ompany had a net operating profit of $500,000." T here is no evidence in the record that Front Roe ever achieved a net oper ating profit of $500,000.

The trial court characterized t he vesting schedule as "missing" and concluded that the unavailability of the document was the Hammonds' fault. Th e trial court

further found that because the l oss of this document was not at tributable to Pertuis, as an equitable matter, "this d isputed ownership issue [should be treated] as if there was a graduated vesting schedule in place, so that [Pertuis] had achieved 72% of the [$500,000] goal of 10% sharehol ding in [Front Roe], or 7.2% ownership of [Front Roe]." On that basis, the trial court concluded Pertuis 's ownership interest in Front Roe was 7.2%. On app eal, the court of appeals affirme d, finding the trial court's equitable remedy was prope r given that "[Pertuis] could not, himself, testify to the specific provisions in th e missing vesting schedule."

This was error, for it erroneously shifted the burden of proof from Pertuis, as the plaintiff seeking to enforce th e purported agreement, to the Ha mmonds. We therefore reverse. Even assuming a written stock agreement was unnecessary, 13

Pertuis failed to meet his burde n of proving the existence of an oral agreement as

to all the material terms of the contract—specifically includin g the required profit margin bench mark, which is perhaps the most material term.

The evidence in the record conclu sively demonstrates that Pertu is's ownership

share in Front Roe is 1%. The tr ial court determined the fair market value of Front Roe is $1,376,000. Accordingly, t he cost of purchasing Pertuis 's shares in Front Roe is $13,760. We affirm the bal ance of the court of appeals ' decision pursuant to Rule 220, SCACR.

III.

Based on the foregoing, we reverse the court of appeals finding s as to

13 See Springob v. Univ. of S.C. , 407 S.C. 490, 495, 757 S.E.2d 384, 387 (2014) ("[T]he Statute of Frauds requi res that a contract that cannot be performed within one year be in writing and signed by the parties.").amalgamation, " de facto partnership," and the award of 7.2% ownership interest in

Front Roe to Pertuis. We affirm a s modified the court of appea ls finding that Pertuis is entitled to unpaid s hareholder distributions. We va cate the court of appeals opinion to the extent it makes any findings as to Beach front and Lake Point, the two North Carolina co rporations, and we affirm the b alance of the judgment of the court of appeals pursuant to Rule 220, SCACR.

FEW, JAMES, JJ., and Acting Jus tice Arthur Eugen e Morehead III, concur. HEARN, J., dissenting in a separate opinion.JUSTICE HEARN: Respectfully, I dissent. While I concur fully in the majority opinion's treatment of the percentage of Pertuis's share in Fro nt Roe and in its discussion of the amalgamation or single business enterprise th eory, I part company with the majority's decision to rule on the single enterprise t heory; instead, I would remand to the trial court to analyze the evidence under the fra mework we established today and to make findings of fact on that issue.