Opinion ID: 1143765
Heading Depth: 2
Heading Rank: 5

Heading: beaux's personal liability for the wage judgment against kic

Text: The trial court held that Beaux was personally liable for the judgment against KIC because Beaux controlled the corporation and abused the corporate structure to the Gibsons' prejudice. Beaux concedes that he controlled the corporation, but asserts that the court erred in finding that his acts prejudiced the Gibsons. In Eagle Air, Inc. v. Corroon & Black/Dawson & Co., 648 P.2d 1000, 1004-05 (Alaska 1982), we held that a shareholder could be held personally liable for a corporate obligation if he controlled the corporation (as determined by six control factors) and used the corporate form to defeat public convenience, justify wrong, commit fraud or defend crime. The trial court found that Beaux had used KIC funds to pay personal obligations, and that he repaid his own loans to KIC although secured creditors (mortgagees) were left unpaid. The Gibsons at least occasionally had transferred operating funds into the KIC capital account which Beaux used to repay his own loans. As a result, KIC's operating account occasionally lacked funds to pay the Gibsons' salary. Beaux points out that he ultimately injected more money into KIC than he took out and that the Gibsons were not prejudiced by any arrearages on the Klondike's mortgages. We agree. However, the Gibsons were prejudiced by Beaux's withdrawals from the operating account that made their monthly salary occasionally unavailable. We hold that this prejudice alone is sufficient to uphold the trial court's decision to pierce the corporate veil.