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

Heading: Misappropriation of Corporate Assets for Personal Use

Text: KG & E's final contention is that Jeff Ross misappropriated corporate property for his personal use. It argues that because Jeff Ross acquired a 1976 Ford truck and trailer through the trucking company account in October of 1990, he took corporate property. The record clearly shows, however, that (1) Jeff Ross reimbursed Ross Service for these items by depositing $10,000 into the account from a loan he received from Norwest Bank, (2) that the 1976 Ford truck and the trailer were listed on the loan documents as the property being purchased, and (3) that Jeff Ross gave a security interest in this property to Norwest Bank. The claim that Jeff Ross took corporate property for his own use does not appear to be sufficiently supported in the evidence to create a genuine issue of material fact. Even if we accept these allegations as true, however, these facts do not prove that there was such a unity of interest and ownership that the separate personalities of Jeff Ross and Ross Service were indistinct or non-existent. Ross Service shareholders, other than Jeff Ross, owned 99.7% of the corporation. If Jeff Ross did, in fact, take the truck and trailer, he took it, ultimately, from the value of the corporation owned by those shareholders. But neither Ross Service, in being wronged, nor Jeff Ross in committing that wrong, engaged in conduct demonstrating a unity of interest and ownership that rendered non-existent the difference between Jeff Ross and Ross Service. At all times the interests of Jeff Ross and Ross Service remained separate and distinct. Committing a wrong against the corporation neither changed that fact nor justifies disregard of the corporate entity. As to this factor, then, KG & E fails to present a genuine issue of material fact which would justify piercing the corporate veil. In summary, KG & E has not satisfied the first prong of the test because it has not presented any genuine issue of material fact showing that Jeff Ross disregarded Ross Service's corporate identity or treated it as his alter ego. Even so, we will briefly analyze the facts as they apply to the second prong of the test.