Opinion ID: 525067
Heading Depth: 3
Heading Rank: 1

Heading: Respect for the Separate Identity of the Corporation

Text: 18 The district court found that the shareholders maintained and respected the separate corporate identity of Valley Cabinet. Valley Cabinet was adequately capitalized at its inception, shares of common stock were issued, board of directors meetings were held annually and at special times, and federal and state taxes were filed through 1984. In addition, proper records were kept of the board of directors meetings and other business. 1 19 The Fund directs our attention to the alleged commingling of Valley Cabinet's assets with those of Robert J. Davis. This Circuit has recognized commingling as among the more serious abuses of the corporate identity. Seymour, 605 F.2d at 1112. Even if the Fund demonstrated that commingling occurred, however, it does not necessarily follow that the district court clearly erred in holding that the Estate of Robert J. Davis should not be liable for the debts of Valley Cabinet. We have held that evidence establishing shareholder disrespect for a corporation's separate identity alone is an insufficient reason to pierce the corporate veil. See Audit Serv. v. Rolfson, 641 F.2d 757, 764 (9th Cir.1981); see also Seymour, 605 F.2d at 1112-113 (defendant's corporate veil was not pierced because fraudulent intent and injustice were not shown). 20 In Audit Serv. we held that the district court did not clearly err in finding that the first factor of the corporate piercing test had been established by evidence of commingling and evidence of a disregard of corporate formalities. Nevertheless, we reversed the district court's decision to pierce the corporate veil in Audit Serv. because there was no evidence of fraudulent intent or injustice. Audit Serv., 641 F.2d at 764. Thus, even if the Fund prevailed on the first factor of the corporate piercing test by demonstrating that Davis commingled his personal assets with those of Valley Cabinet, it must additionally prove fraudulent intent or injustice.