Opinion ID: 3009841
Heading Depth: 2
Heading Rank: 1

Heading: 2d at 641; Lezzer Cash & Carry, 537 A.2d at 861. In

Text: particular, I do not find persuasive those Miller Act cases that pre-date Ashley and Lezzer Cash & Carry. See Global Building Supply, 995 F.2d at 519 (describing pre-Bateson cases as arguably more prove to excuse non-compliance with a bond's notice provision than those that came after Bateson). Additionally, I am unable to accept the Court's conclusion that Hartford (as a third-party surety) can be compelled to pay because the party in control of a corporation uses that control, or uses the corporate assets, to further his or her own personal interests. . . . Majority Op. at 16 44 (quoting Ashley, 393 A.2d at 641). Such a general statement strikes me as obiter dictum. At best, it is a truism. At worst, if taken seriously, it would permit courts to ignore the fiction of separate corporate existence at will. That fiction is one of proven utility and, in my judgment, essential to the functioning of a modern free market industrial society. Finally, I believe the district court not only erred as a matter of law, but that its ultimate finding that Mele and TriCounty were alter egos is clearly erroneous. Put somewhat differently, viewing the record as a whole leads me to a definite and firm conviction that a mistake has been committed. Anderson v. City of Bessemer, 470 U.S. 564, 573 (1985) (internal quote omitted). Specifically, Tri-County followed all corporate formalities and maintained a legitimate set of corporate records. Although Mele may have participated in Tri-County's management, there is no clear indication that John Mele or his corporation dominated and controlled Tri-County to such an extent that it was a facade or a sham. See McFadden, 609 F. Supp. at 1105 (mere participation in management is insufficient). Further, neither John Mele nor his corporation owned any stock in Tri-County; nor can the court attribute a financial interest to John Mele and the Mele corporation simply because his three daughters were TriCounty's sole shareholders. Related family corporations often have common stockholders. The fact the district court seemed to rely upon most strongly was the indemnity agreement Hartford demanded from Tri- 45 County and the Mele family's other corporations. The record indicates, though, that Tri-County and its owners reasonably thought they would benefit financially if Mele obtained bonding and performed the project. Thus, I conclude the indemnity agreement is insufficient to justify the conclusion that TriCounty was Mele's alter ego. The district court also relied on testimony that some of Tri-County's employees were interviewed and hired at Mele's offices. The record, however, also shows that these interviews were done by a Tri-County employee, who made the decision to hire. Moreover, the testimony to the effect that it was common knowledge that Tri-County and Mele were the same company can just as easily be taken as showing that Local 542 dealt with TriCounty with its eyes open. See Lezzer Cash & Carry, 537 A.2d at 861. The fact that a Tri-County employee attended a meeting with Hartford concerning the surety bond does not appear unusual to me as Hartford was asking Tri-County to indemnify it. I recognize, of course, that Tri-County's president's responses to the district court could indicate that she lacked any detailed knowledge of Tri-County's operations. The district court used these responses to conclude that the president was a mere figurehead. Many times, however, her answers merely indicated confusion over the nature of the question and the district court's manner in asking it. The district court believed that Tri-County's ignorance of Mele's proposal to subordinate Tri-County's debt in its bankruptcy proceeding was significant. I fail to see how a 46 unilateral offer by Mele to subordinate its debt to Tri-County, without Tri-County's knowledge, is evidence of Tri-County's participation in abuse of the corporate form warranting application of the alter ego doctrine. The district court's conclusion that Tri-County only worked on projects with Mele is not borne out by the record. The district court's belief that Tri-County was grossly undercapitalized ignores the economic reality that it had operated successfully for twenty-three years. So, too, TriCounty's failure to pay dividends strikes me as nothing unusual for family corporations whose owners are acquainted with our income tax laws. On the other hand, the undisputed fact that there was no commingling of funds and Tri-County was not recently incorporated indicate, along with their observance of corporate formalities, that the separate corporate existence of Mele and Tri-County should not be ignored. Taking all these facts together, I am unable to conclude that Local 542 produced evidence that is clear, precise and convincing enough to warrant piercing the corporate veil. Accordingly, I would reverse the district court's judgment in all respects. 47 48