IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

Case No. 2:17-cv-783-EAS-EPD

CHIEF JUDGE EDMUND A. 

SARGUS, JR.

MAGISTRATE JUDGE 

ELIZABETH PRESTON DEAVERS

GARRISON SOUTHFIELD PARK LLC,

Plaintiff,

v.

CLOSED LOOP REFINING AND 

RECOVERY, INC., et al.,

Defendants.

MEMORANDUM OF PLAINTIFF GARRISON SOUTHFIELD PARK LLC 

CONTRA THE MOTION TO DISMISS OF DEFENDANT MOSHE SILAGI

Plaintiff Garrison Southfield Park LLC (“Garrison”) hereby submits its memorandum in 

opposition to the motion (Doc. # 256) of Defendant Moshe Silagi (“Silagi”) to dismiss 

Garrison’s claims against Silagi in Garrison’s First Amended Complaint (Doc. # 85) 

(“Complaint” or “Compl.”). Garrison’s claims against Silagi arise from Silagi’s fraudulent 

conduct as the sole member and managing member of MS-South LLC (“MS-South”) in selling a 

warehouse with illegally stockpiled hazardous waste to Garrison while representing that the 

warehouse had not been used “for the storage, treatment or disposal of Hazardous Substances.” 

Then, over four years later, yet less than one month after Garrison filed this lawsuit, Silagi 

dissolved MS-South in an attempt to evade liability for his misconduct. Recognizing the 

fraudulent nature of this event, Silagi tellingly (and without support from the Complaint)

attempts to defend the timing of this dissolution (at PageId # 1556 of his motion) as occurring 

“in the normal course of business.” Silagi nevertheless argues that Garrison’s Complaint does 

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not allege some of the facts necessary to pierce the corporate veil of MS-South and hold Silagi 

liable for his misdeeds. 

The dissolution is an obvious example of Silagi’s fraudulent conduct. As stated in 

Complaint Paragraph 223, Silagi dissolved MS South to evade liability in this lawsuit. The fact 

that Silagi dissolved the company less than a month after the lawsuit was filed as stated in 

Complaint Paragraph 222 provides a more than plausible inference that Silagi knew of the 

Complaint and was spiriting the company’s assets away from Garrison.

As explained below, Silagi’s pervasive control over MS-South justifies piercing the 

company’s veil to hold Silagi personally liable for his misconduct. Section 107(a)(2) of 

CERCLA imposes liability on “any person who at the time of disposal of any hazardous 

substance owned or operated any facility at which such hazardous substances were disposed of.” 

42 U.S.C. § 9607(a)(2) (emphasis added). Paragraph 11 of the Complaint recounts that MSSouth owned the warehouse at 1675 Watkins Road from prior to April 6, 2012 through on or 

about April 29, 2013 and during that time leased this warehouse to Closed Loop Refining and 

Recovery, Inc. (“Closed Loop”). During that time, Closed Loop was speculatively accumulating 

hazardous electronic wastes at the property without any feasible means of recycling them 

(Compl., ¶ 223), so the wastes were both hazardous wastes under the Resource Conservation and 

Recovery Act and the Ohio hazardous waste law corollary as well as hazardous substances under 

CERCLA, contrary to Silagi’s representation. Id., ¶¶ 86, 87, 94-104, 193-204. For that reason, 

MS-South is liable as an “owner” under CERCLA Section 107(a)(2). This owner liability should 

be imposed on Silagi by piercing MS-South’s corporate veil as requested in Complaint 

Paragraph 821. 

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As explained below, the Complaint contains adequate facts in support of veil piercing to 

state a claim for relief that is plausible on its face, as required by Bell Atl. Corp. v. Twombly, 550 

U.S. 544, 570, 127 S. Ct. 1955, 1974, 167 L. Ed. 2d 929 (2007).

I. The Complaint States Sufficient Grounds To Pierce The Corporate Veil Against 

Silagi For Misrepresenting The Environmental Status Of The Warehouse And For 

Fraudulently Conveying MS-South’s Assets To Shield Them From Garrison’s 

Claims.

Piercing the corporate veil is a theory of corporate law that seeks to hold shareholders 

liable for a corporation’s wrongdoing. Under this theory, individual shareholders are held liable 

for a corporation’s wrongs when their (1) control over the corporation was so complete that the 

corporation has no separate mind, will, or existence of its own, i.e., the corporation is the 

individual’s alter ego, (2) extreme misconduct in their control over the corporation was exercised 

in such a manner as to commit fraud, an illegal act, or a similarly unlawful act, and (3) injury or 

unjust loss resulted to the plaintiff. Belvedere v. Condominium Unit Owners’ Ass’n v. R.E. 

Roark Cos., Inc., 67 Ohio St.3d 274, 289, 617 N.E.2d 1075, 1086 (1993); Dombroski v. 

WellPoint, Inc., 2008-Ohio-4827, ¶¶ 18, 29, 119 Ohio St.3d 506, 510-11, 513, 895 N.E.2d 538, 

545. Limited liability companies, like corporations, are subject to the doctrine of piercing the 

corporate veil. Denny v. Breawick, LLC, 2019-Ohio-2066, ¶ 15, __ N.E.3d __ (citing other Ohio 

appellate cases). The courts will pierce the corporate veil when “it would be unjust to allow the 

shareholders to hide behind the fiction of the corporate entity.” Id., citing Belvedere, 67 Ohio 

St.3d at 287. 

The Sixth Circuit has held that “when a corporation exists solely for the purpose of 

serving as an alter ego for its owners, the courts will not permit themselves to be blinded or 

deceived by mere forms or law.” Flynn v. Greg Anthony Constr. Co., 95 Fed.Appx. 726, 733-34 

(6th Cir. 2003) (internal quotation marks omitted). Rather, the courts “will deal with the 

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substance of the transaction involved as if the corporate agency did not exist and as the justice of 

the case may require.” Id. 

A. The Facts In Garrison’s Complaint, If Proven, Would Justify A Finding That 

MS-South Was Moshe Silagi’s Alter Ego Due To His Complete Control Over 

The Company And His Personal Involvement And Control Over Its 

Wrongful Activities. 

The first element of veil piercing is a restatement of the alter-ego doctrine, which requires 

that a plaintiff “show that the individual and the corporation are fundamentally 

indistinguishable.” Taylor Steel, Inc. v. Keeton, 417 F.3d 598, 605 (6th Cir. 2005), quoting 

Belvedere, 67 Ohio St.3d at 288, 617 N.E.2d at 1086. In deciding whether the company is an 

individual’s alter ego, Ohio courts consider such factors as: (1) grossly inadequate capitalization, 

(2) failure to observe corporate formalities, (3) insolvency of the debtor corporation at the time 

the debt is incurred, (4) shareholders holding themselves out as personally liable for certain 

corporate obligations, (5) diversion of funds or other property of the company property for 

personal use, (6) absence of corporate records, and (7) the fact that the corporation was a mere 

facade for the operations of the dominant shareholder(s). Taylor Steel, 417 F.3d at 605; 

Redhawk Glob., LLC v. World Projects Int'l, Inc., No. 2:11-CV-666, 2017 WL 4862485, at *10 

(S.D. Ohio, Sept. 26, 2017). However, “because of the equitable nature of the veil-piercing 

doctrine, no list of factors can be exclusive or exhaustive.” Carter-Jones Lumber Co. v. LTV 

Steel Co., 237 F.3d 745, 749 (6th Cir. 2001) (applying Ohio law).

In fact, none of these factors is necessary to demonstrate that a purported “company” like 

MS-South is a shareholder’s alter ego. Although these factors are instructive, their presence is 

not required to pierce the corporate veil “where equity demands that the fiction of corporate 

personhood be ignored.” State ex rel. Petro v. Mercomp, Inc., 2006-Ohio-2729, ¶ 26, 167 Ohio 

App.3d 64, 71, 853 N.E.2d 1193, 1198, quoting Carter-Jones, 237 F.3d at 749. Accordingly, the 

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Sixth Circuit has rejected the argument that these factors are necessary to pierce the corporate 

veil:

Denune’s argument, if we adopted it, would straightjacket the courts in 

situations where equity demands that the fiction of corporate personhood be 

ignored. Consider, for example, a case in which a corporation with a single 

shareholder kept immaculate corporate records, observed all the formalities 

required by corporate law, and was adequately capitalized. The shareholder 

never commingled funds, and never held himself out as personally liable for the 

corporation’s debts. The corporation even does some legitimate business. Can 

it be that the shareholder is immunized from personal liability if he causes the 

corporation to commit an illegal act, no matter the degree of his control over the 

corporation with regard to the illegal act, no matter the harm to third parties, and 

no matter the other equities? Neither we nor the Ohio courts hold that such 

immunity exists.

Carter-Jones, 237 F.3d at 749; accord Mercomp, 2006-Ohio-2729, ¶ 26, 167 Ohio App.3d at 71,

853 N.E.2d at 1198 (quoting this language from Carter-Jones). Thus, this Court has noted that 

“none of these factors is a prerequisite to a finding that the corporate form has been violated.” 

Redhawk, 2017 WL 4862485, at *13 (quoting Transition Healthcare Assocs. v. Tri-State Health 

Investors, LLC, 306 Fed.Appx. 273, 280 (6th Cir. 2009)). 

Accordingly, the Sixth Circuit has held that, where necessary to prevent injustice, a 

company may be deemed the alter ego of its owner under Ohio case law based solely on the 

degree of control exercised by the wrongdoer over the corporation or the owner’s involvement in 

or control of the wrongful deed. Carter-Jones, 237 F.3d at 749 (citing Janos v. Murduck, 109 

Ohio App.3d 583, 672 N.E.2d 1021 (1996) (finding the corporation to be an alter ego due to the 

owner’s control of the corporation, with an emphasis on the owner’s control over the wrongful 

act), and Sintel, Inc. v. Budget Sys., No. 74249, 1999 WL 401409, at *9 (8th Dist., June 17, 1999)

(finding the corporation to be an alter ego solely due to the owner’s complete control over the 

corporation)). 

The Sixth Circuit also has advised that the piercing theory must be applied in a manner 

that effectuates CERCLA’s purpose:

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Congress enacted CERCLA with the intent of ensuring that those responsible for any 

damage, environmental harm, or injury from chemical poisons bear the costs of their 

actions. Courts applying state veil piercing law in conjunction with a CERCLA action 

must keep this statute’s broad legislative purpose in mind.

Carter Jones, 237 F.3d at 749 (quoting AT & T Glob. Info. Sols. Co. v. Union Tank Car Co., 29 

F. Supp.2d 857, 868 (S.D. Ohio 1998).

Consistent with this principle, the Sixth Circuit has observed that “Ohio courts have held 

that the existence of only a single shareholder can be a powerful indicator of that shareholder's 

exercising control so complete over the corporation that it had no separate mind, will or 

existence of its own.” Taylor Steel, 417 F.3d at 607 (internal quotes omitted). Taylor Steel cited 

three Ohio appellate decisions to illustrate this point: (i) Stypula v. Chandler, No.2002–G–2468, 

2003 WL 22844296, at *2 (11th Dist., Nov. 26, 2003), overruled on other grounds by

Dombroski, 2008-Ohio-4827, 119 Ohio St.3d 506, 895 N.E.2d 538 (Stypula noted that some 

Ohio courts have regarded an individual’s status as the sole owner and director as sufficient to 

satisfy Belvedere’s alter ego prong); (ii) Zimmerman v. Eagle Mortg. Corp., 110 Ohio App.3d 

762, 772, 675 N.E.2d 480, 486 (2d Dist. 1996) (basing its judgment that the corporation was the 

individual’s alter ego solely on the individual’s status as the company’s sole stockholder and 

director); and (iii) Intergy, Inc. v. Carrigan, No. 62210, 1993 WL 127089, at *2 (8th Dist., Apr. 

22, 1993) (basing its alter ego finding on the defendant’s status as the sole owner and director of 

the company). For the same reason, the first element in the Belvedere test was satisfied in 

Mercomp because the individual solely controlled the company as its sole shareholder, director, 

and officer. Mercomp, 2006-Ohio-2729, at ¶ 23, 167 Ohio App.3d at 70-71, 853 N.E.2d at 1198. 

The claims against Silagi expressed in Garrison’s Complaint comply with the foregoing 

standards and are not subject to dismissal. Consistent with Carter-Jones, Taylor Steel, and the 

Ohio case law cited therein, the Complaint identifies the following facts to establish that Silagi 

pervasively controlled MS-South and its wrongful acts:

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63. Defendant Silagi was the sole member and the managing member of MS-South 

LLC, which owned all right, title and interest in 1675 Watkins Road from prior to 

April 6, 2012, through on or about April 29, 2013. 

214. Defendant Silagi exercised exclusive control over MS-South LLC as the property 

owner of 1675 Watkins Road from prior to April 6, 2012, through on or about April 

29, 2013.

215. According to the State of California Secretary of State filings, Defendant Silagi 

exercised extensive and exclusive control over MS-South LLC, serving as its 

managing member, its sole member, and its registered agent for service of process.

216. Defendant Silagi’s current principal place of business for Silagi Development and 

Management Inc. is the same address listed on the Lease Agreement entered into 

by and between MS-South LLC and Defendant Closed Loop on or about April 6, 

2012 for 1675 Watkins Road.

217. Upon information and belief, Defendant Silagi managed, directed, and conducted 

the operations of MS-South LLC as they related to tenant disposal of hazardous 

waste and/or tenant compliance with environmental regulations. 

218. Defendant Silagi signed the Lease Agreement with Defendant Closed Loop for 

1675 Watkins Road in the presence of a notary public on or about April 9, 2012; 

the Lease Agreement expressly permitted the “electronic recycling . . . of cathode 

ray tubes,” which contain lead.

220. Defendant Silagi thereafter misrepresented to Garrison in a Purchase and Sale 

Agreement (“PSA”) dated April 29, 2013, that “[t]o Seller’s knowledge, except as 

set forth on Schedule 3.1.10 . . . during Seller’s term of ownership, the Property 

[which included 1675 Watkins Road] has not been used for industrial purposes or 

for the storage, treatment or disposal of Hazardous Substances (as hereinafter 

defined), other than products customarily used or stored incidental to the operation 

and/or maintenance of the Property, all of which are stored and used in accordance 

with all applicable Environmental Laws.”

a. The PSA, Schedule 3.1.10, listed no scheduled exceptions.

b. The PSA defined “Hazardous Substances” to include “lead.”

c. The PSA defined “to Seller’s Knowledge” as “the actual current knowledge 

of Guarantor, after due inquiry of (i) the individuals in Seller's organization 

who have knowledge of the matters contained herein and (ii) Kevin 

McLewee, the general manager of the Property, and an employee of Cassidy 

Turley.”

d. The PSA defined “Guarantor” as Defendant Silagi.

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221. Defendant Silagi provided a guaranty in the PSA which “unconditionally guaranties 

to [Garrison] the full and faithful payment and performance by [Defendant MSSouth LLC] of all of its obligations to [Garrison],” which obligations are “absolute, 

primary, unconditional and irrevocable.”

222. MS-South LLC was dissolved on or about October 3, 2017, i.e., less than one month 

after Garrison filed the original Complaint in this matter. 

223. Upon information and belief, Defendant Silagi dissolved MS-South LLC in an 

effort to avoid liability in connection with the CRTs and other e-waste that were 

stockpiled and speculatively accumulated at 1675 Watkins Road during MS-South 

LLC’s period of ownership from April 6, 2012 through April 29, 2013.

Under the mandated Rule 12 analysis, this Court is required to accept the factual allegations of 

the Complaint as true. Redhawk, 2017 WL 4862485, at *5. 

Silagi’s status as the sole member and managing member of MS-South is “a powerful 

indicator of that shareholder’s exercising control so complete over the corporation that it had no 

separate mind, will or existence of its own,” as that standard is expressed in Taylor Steel. As 

stated in Taylor Steel and the Ohio decisions cited therein, these facts alone may be enough to 

establish MS-South to be Silagi’s alter ego. Silagi further revealed his control over MS-South by 

signing a personal guaranty for the company’s obligations to Garrison under the purchase 

agreement and later dissolving the company in purview of the instant action. Compl., ¶¶ 220.d, 

221, 222, 223. The identification of these facts is sufficient at the case’s pleadings stage to 

withstand dismissal of Garrison’s claims against Silagi.1

In addition, the Complaint recounts Silagi’s personal involvement in and control over the 

fraudulent activities from which Garrison’s claims against him arose. Silagi misrepresented to 

Garrison in April 2013 that the property had not been used for the storage, treatment or disposal 

of hazardous substances. Compl., ¶ 220. By that time, Closed Loop had been speculatively 

accumulating hazardous electronic wastes at the property since 2012, without any feasible means

 1

 The fact that “MS” in “MS-South obviously stands for “Moshe Silagi” also indicates that the company was 

Silagi’s alter ego. 

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of recycling them (id., ¶ 223), so the wastes were both hazardous wastes under the Resource 

Conservation and Recovery Act and the Ohio hazardous waste law corollary as well as 

hazardous substances under CERCLA, contrary to Silagi’s representation. Id., ¶¶ 86, 87, 94-104, 

193-204. Silagi also dissolved MS-South less than a month after Garrison filed this lawsuit in an 

effort to avoid liability in connection with the wastes. Id., ¶¶ 222, 223. Under Carter-Jones and 

the Ohio decisions cited therein, MS-South may be deemed to be Silagi’s alter ego due to his 

personal involvement and control over these wrongful deeds. 

Even if the Court decides that the Complaint does not contain sufficient allegations about 

Silagi’s control over MS-South, the Court should not dismiss the claims against Silagi. This 

Court has repeatedly ruled that the question of whether a shareholder exercised a degree of 

control over a corporation justifying a court’s holding it accountable by veil piercing is a factsensitive question which should not be answered until a plaintiff has had some opportunity to 

conduct discovery on this matter. Allied Diversified Constr., Inc. v. Elite Mech., Inc., No. 

1:16CV334, 2016 WL 7034238, at *4 (S.D. Ohio, Dec. 2, 2016); Cap City Dental Lab, LLC v. 

Ladd, No. 2:15-CV-2407, 2016 WL 4573993, at *12 (S.D. Ohio, Sept. 1, 2016); Orrand v. Kin 

Contractors, LLC, No. 2:09 CV 1129, 2011 WL 1238301, at *4 (S.D. Ohio, Mar. 30, 2011). 

Due to the importance of discovery in establishing the element of control, a plaintiff's complaint 

will not be dismissed for failure to plead sufficient facts regarding the requisite level of control 

necessary to hold the defendant personally liable. Allied, 2016 WL 7034238, at *4; Cap City 

Dental Lab, LLC v. Ladd, No. 2:15-CV-2407, 2016 WL 4573993, at *12; Orrand, 2011 WL 

1238301, at *4. Accordingly, even if a plaintiff's well-pleaded allegations are insufficient to 

affirmatively establish the element of control under Belvedere, the Court declines to dismiss any 

veil-piercing claims against a defendant on this sole basis at this stage. Allied, 2016 WL 

7034238, at *4–5; Cap City, 2016 WL 4573993, at *12. Most of the facts demonstrating Silagi’s 

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control over MS-South are particularly within Silagi’s possession and cannot be unearthed 

without discovery. Consequently, this is a case in which it would only be fair to provide 

Garrison with the opportunity to uncover additional facts about Silagi’s control over his 

company.

B. The Complaint Satisfies The Second Element For Piercing MS-South’s Veil 

By Alleging That Silagi Misrepresented The Contents Of The Warehouse And 

That He Fraudulently Dissolved MS-South In An Attempt To Evade 

Garrison’s Claims.

The second element of veil piercing is satisfied if extreme misconduct in an owner’s 

control over the corporation was exercised in such a manner as to commit fraud, an illegal act, or 

a similarly unlawful act. Silagi claims that the Complaint does not contain enough allegations 

about common law fraud to support this element. However, Silagi’s misconduct constitutes 

fraud that satisfies the second element of veil piercing in two respects, one of which constitutes 

common law fraud and another grounds that need not rely on common law fraud.

First, Silagi misrepresented to Garrison in a Purchase and Sale Agreement dated April 29, 2013, 

that “[t]o Seller’s knowledge, except as set forth on Schedule 3.1.10 . . . during Seller’s term of 

ownership, the Property [which included 1675 Watkins Road] has not been used for industrial 

purposes or for the storage, treatment or disposal of Hazardous Substances (as hereinafter 

defined), other than products customarily used or stored incidental to the operation and/or 

maintenance of the Property, all of which are stored and used in accordance with all applicable 

Environmental Laws.” Compl., ¶ 220. This misrepresentation is alleged with specificity 

(including the date of misrepresentation) in the Complaint and is set forth in Exhibit 1 to Silagi’s 

motion. Silagi knew that Closed Loop was storing hazardous substances other than products 

customarily used or stored incidental to the operation and/or maintenance of the Property, since 

he represented in the Purchase and Sale Agreement that he had made due inquiry with 

individuals in MS-South’s organization who had knowledge of this matter. Compl., ¶¶ 220, 

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220.c. And if Silagi did not know that his representation was false, then he exhibited disregard 

and/or recklessness in making his statement, since the agreement required him to make the 

inquiries necessary to make this representation. See Volbers-Klarich v. Middletown Mgt., Inc., 

2010-Ohio-2057, ¶ 27, 125 Ohio St.3d 494, 500, 929 N.E.2d 434, 440 (a fraudulent statement is 

“made falsely, with knowledge of its falsity or with such utter disregard and recklessness as to 

whether it is true or false that knowledge may be inferred”). Moreover, if Silagi did not conduct 

the inquiry necessary to determine the accuracy of his representation about hazardous 

substances, then he misrepresented that he had made “due inquiry” about this subject. Compl., 

¶¶ 220, 220.c. 

The Complaint’s allegations contain enough facts to state a claim for relief that is 

plausible on its face, as required by Twombly, 550 U.S. at 570, 127 S. Ct. at 1974. Silagi 

obviously intended for Garrison to rely on his misrepresentation in order to persuade Garrison to 

purchase the building. Equally obvious is the fact that Garrison relied on Silagi’s false 

representation, because it would not have purchased a warehouse known to contain hazardous 

substances that would cost millions of dollars to remediate. Garrison’s reliance on Silagi’s 

statement was justifiable, since Silagi represented that he had made due inquiry to determine that 

the electronic devices in the warehouse were not hazardous substances. 

Second, Silagi’s dissolution of MS-South satisfies the second element for veil piercing

without the application of common law fraud. A fraudulent conveyance under the Ohio Uniform 

Fraudulent Transfer Act in Ohio Revised Code (“R.C.”) Chapter 1336 satisfies Dombroski’s

second element for veil piercing. Flagstar Bank, FSB v. Sellers, 2010-Ohio-3951, ¶¶ 13-15, 23

(12th Dist.); Stewart v. R.A. Eberts Co., 2009-Ohio-4418, ¶¶ 25-26 (4th Dist.). R.C. § 

1336.05(A) provides that a “debtor,” which is defined by R.C. 1336.01(F) as “a person who is 

liable on a claim,” is liable to the claimant for a “transfer” made after the claim arose if the 

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debtor became insolvent as a result of the transfer. R.C. § 1336.01(L) defines a “transfer” to 

include every direct or indirect, absolute or conditional, and voluntary or involuntary method of 

disposing of or parting with an asset or an interest in an asset, and includes payment of money, 

release, lease, and creation of a lien or other encumbrance. A debtor is liable for a fraudulent 

transfer without regard to intent and even in the absence of misrepresentation. Wagner v. 

Galipo, 50 Ohio St.3d 194, 197, 553 N.E.2d 610, 613 (1990). Instead, fraud is imputed to the 

debtor when the statutory elements of a fraudulent transfer have been met. Stewart, 2009-Ohio4418, at ¶ 26. 

Accordingly, the court in Stewart pierced the veil of a company whose owner ceased its 

operations and transferred its assets elsewhere to avoid liability. Stewart, 2009-Ohio-4418, at 

¶ 23. The court found that this fraudulent transfer satisfied the second element for veil piercing. 

Id. 

Ohio courts do not require allegations of fraudulent conveyance to be made with 

particularity, or even require such allegations to be alleged at all. Id.; Flagstar Bank, 2010-Ohio3951, at ¶ 15. Nevertheless, the Complaint contains sufficient facts to demonstrate that Silagi’s 

acts are a fraudulent conveyance under R.C. 1336.05(A). 

The Complaint alleges that “MS-South LLC was dissolved on or about October 3, 2017, 

i.e., less than one month after Garrison filed the original Complaint in this matter.” Compl., ¶

222. The Complaint further states that Silagi dissolved MS-South in an effort to avoid liability 

in connection with the electronic wastes that were stockpiled and speculatively accumulated at 

1675 Watkins Road during MS-South’s ownership from April 6, 2012 through April 29, 2013. 

Id., ¶ 223. Garrison purchased the warehouse for “good and valuable consideration” on April 29, 

2013. Id., ¶64. The purchase agreement attached to Silagi’s motion reveals that Garrison made a 

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large monetary payment to MS-South for this warehouse and other properties. See Exh. 1, Pg. 2 

of Silagi’s motion. 

As noted above and in the Complaint, Closed Loop had been speculatively accumulating 

leaded electronic wastes at the property since 2012 without any feasible means of recycling them 

(id., ¶ 223), so the wastes were hazardous wastes under the Resource Conservation and Recovery 

Act and hazardous substances under CERCLA at the time Silagi sold the warehouse to Garrison. 

Id., ¶¶ 86, 87, 94-104, 193-204. Consequently, Garrison had a claim against MS-South under 

Section 107(a) of CERCLA, because it owned the warehouse at the time that hazardous 

substances were disposed of the facility. 42 U.S.C. § 9607(a) (imposing liability on “any person 

who at the time of disposal of any hazardous substance owned or operated any facility at which 

such hazardous substances were disposed of”). Thus, any transfer by MS-South of the sale 

proceeds for the warehouse had to occur after Garrison’s claim arose, thereby qualifying as a 

fraudulent transfer under R.C. § 1336.05(A). This transfer left the defunct MS-South insolvent. 

Silagi’s fraudulent conveyance is fraud, an illegal act, or a similarly unlawful act that qualifies 

for the second element of veil piercing.

C. The Complaint Alleges That Silagi’s Fraudulent Conduct Has Caused 

Garrison To Incur Remediation Costs, Thus Satisfying The Third Element 

For Piercing MS-South’s Veil. 

The third prerequisite for piercing the veil is a showing that injury or unjust loss resulted 

to the plaintiff. This injury occurred (i) when Garrison was stuck with a huge cleanup bill to 

address the hazardous substances in the warehouse, and (ii) when Silagi plundered MS-South’s 

assets to prevent Garrison from obtaining the company’s contribution to the remediation costs, 

sticking Garrison with a huge remediation bill. 

As expressed by an Ohio appellate court, a person’s asset transfer to avoid the cost of 

remediating wastes produces an unjust result that merits the application of the third piercing 

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element. Kays v. Schregardus, 138 Ohio App.3d 225, 230–31, 740 N.E.2d 1123, 1127–28 (11th

Dist. 2000). In Kays, a person transferred a contaminated property from himself to shell 

corporations lacking the assets to remediate it. The court pierced the corporations’ veils to hold 

the owner liable, finding that his subterfuge would leave Ohio EPA “holding the proverbial bag 

for the cost of the cleanup, thus fulfilling the third prong of the Belvedere test.” Id. at 231, 740 

N.E.2d at 1128. 

The same principle applies to Silagi’s misrepresentations about the contents of the 

warehouse and his transfer of MS-South’s assets to avoid his responsibility for contributing to 

the warehouse remediation. The Court should deny his attempt to insulate his funds from 

liability and allow Garrison to continue with its veil piercing action. 

II. Conclusion

Silagi has sought to evade his fair share of remediation costs by thinly cloaking his 

activities with the veil of a limited liability company, pocketing the money Garrison paid to the 

company to purchase the warehouses, and then dissolving the company less than a month after 

Garrison filed this lawsuit. Allowing Silagi to succeed in this scheme would circumvent 

CERCLA’s intent to make all responsible parties pay their fair share to remediate contaminated 

facilities. The Court should deny Silagi’s attempt to sidestep his responsibility. 

Respectfully submitted,

VAN KLEY & WALKER, LLC 

/s/ Jack A. Van Kley

Jack A. Van Kley (#0016961)

Trial Attorney

132 Northwoods Blvd., Suite C-1

Columbus, Ohio 43235

Tel: (614) 431-8900

Fax: (614) 431-8905

Email: jvankley@vankleywalker.com

Case: 2:17-cv-00783-EAS-EPD Doc #: 365 Filed: 08/02/19 Page: 14 of 15 PAGEID #: 4136
15

Of Counsel:

KATTEN MUCHIN ROSENMAN LLP

/s/ Karl R. Heisler

Karl R. Heisler (pro hac vice)

525 West Monroe Street

Chicago, IL 60661-3693

Tel: (312) 902-5430

Fax: (312) 902-1061

Email: karl.heisler@kattenlaw.com

FRIED, FRANK, HARRIS, SHRIVER

 & JACOBSON LLP

/s/ Matthew Parrott

Matthew Parrott (pro hac vice)

One New York Plaza

New York, New York 10004

Tel: (212) 859-8000

Fax: (212) 859-4000

Email: M.Parrott@friedfrank.com

Attorneys for Plaintiff Garrison 

Southfield Park LLC

CERTIFICATE OF SERVICE

The undersigned hereby certifies that, on August 2, 2019, a copy of the foregoing motion 

was filed electronically with the Court’s CM/ECF system, which will send notification to all 

attorneys registered to receive such service. Parties may access this filing through the Court’s 

electronic filing system.

/s Jack A. Van Kley

Jack A. Van Kley

Trial Attorney for Plaintiff

Garrison Southfield Park LLC

Case: 2:17-cv-00783-EAS-EPD Doc #: 365 Filed: 08/02/19 Page: 15 of 15 PAGEID #: 4137