Opinion ID: 1969727
Heading Depth: 4
Heading Rank: 3

Heading: Commingling of Personal Funds with Corporate Funds

Text: KG & E's third contention is that because Jeff Ross commingled his personal funds with those of Ross Service in the trucking company account, Jeff Ross and Ross Service failed to maintain separate identities. [13] Both sides agree that Ross Service used Jeff Ross's trucking company account at Norwest Bank in Dell Rapids as a depository for Ross Service's corporate funds between April 1990 and January of 1991. They also agree that this commingling was done for the corporation's benefit because Ross Service's regular bank in Colman, South Dakota would have automatically applied any deposits in that account to Ross Service's outstanding loans. KG & E's argument focuses on Jeff Ross's personal deposits and withdrawals from his trucking company account during the contract period between KG & E and Ross Service. In its argument to the circuit court, KG & E specifically alleged that because Jeff Ross's personal withdrawals exceeded his personal deposits in this account between July 1990 and January 1991 by approximately $14,000, he had in effect stolen this money from Ross Service. KG & E claimed that this alleged theft justified piercing the corporate veil of Ross Service to hold Jeff Ross individually liable for the unpaid contract price of about $194,000. However, Jeff Ross effectively rebutted this argument and demonstrated that there was no issue of material fact by showing: (1) that KG & E was conveniently looking only at the months of July 1990 through January 1991 to establish this $14,000 deficit; and (2) that KG & E had overlooked the fact that he had deposited $14,715.59 into this account on May 29, 1990. On appeal, KG & E has fashioned a new argument in an effort to show that Jeff Ross's personal withdrawals exceeded his personal deposits. KG & E now claims that by including the $9,700 spent on a Ford truck and trailer, Jeff Ross's withdrawals exceed his deposits in the trucking company account by $9,032.40. We will not consider an argument raised for the first time on appeal. Oesterreich v. Canton-Inwood Hospital, 511 N.W.2d 824, 829 (S.D.1994); Hawkins v. Peterson, 474 N.W.2d 90, 95 (S.D.1991); Mayrose v. Fendrich, 347 N.W.2d 585 (S.D.1984); Jones v. Sully Buttes School, 340 N.W.2d 697 (S.D.1983); Mortweet v. Eliason, 335 N.W.2d 812 (S.D.1983); Weaver v. Boortz, 301 N.W.2d 673 (S.D.1981). Even if we were to accept KG & E's argument as true, this in and of itself would not justify piercing the corporate veil. At most, these facts (1) demonstrate that Jeff Ross may have taken money or property from Ross Service and (2) may give Ross Service a cause of action against Jeff Ross for the amount of the account deficit. These facts, however, do not demonstrate that Jeff Ross and Ross Service failed to maintain separate identities or that Ross Service was merely the alter ego of Jeff Ross. As to this factor then, KG & E fails to present a genuine issue of material fact which would justify piercing the corporate veil.