Court Opinion

ID: 9568751
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:07:10.134601+00
Date Added: 2024-06-11T11:05:26.079198
License: Public Domain

CARTER, Justice
(concurring in part and dissenting in part).
I concur in the denial of punitive damages and the affirmance of the judgments for actual damages against all defendants except Ki Tae Kim. I dissent from the judgment against the latter defendant.
Plaintiffs in this action are asserting creditors’ claims arising from commercial transactions with Iowa Tae Kwon Do Academy, Inc., an Iowa corporation of which Ki Tae Kim was neither an officer, director, shareholder, or employee. Ki Tae Kim had no involvement whatsoever with these transactions in any capacity. The activities of the corporation were carried on entirely by In Mook Kim.
After the transactions with plaintiffs had been concluded, In Mook Kim arranged with Ki Tae Kim to organize Acta Fitness Center; Ltd., another Iowa corporation. Ki Tae Kim, as sole shareholder, officer and director of the latter corporation succeeded to the going business operation of Iowa Tae Kwon Do Academy, Inc. consisting primarily of its patrons. As the court of appeals found, there was no net asset value transferred from Iowa Tae Kwon Do to Acta.
Both Iowa Tae Kwon Do and Acta were formed without payment of value to the corporations for subscription of stock. Consequently, the majority is correct in visiting personal liability on In Mook Kim for those transactions which he carried out through the corporate shell of Iowa Tae Kwon Do. Moreover, the “continuation corporation” theory supports the liability imposed on Acta .for these creditors’ claims. In contrast, however, neither the continuation corporation theory nor the “piercing” theory espoused by the majority will support a judgment against Ki Tae Kim for the claims of Iowa Tae Kwon Do creditors. The concept of piercing the corporate veil is a theory whereby individuals who engage in activities in the name of a corporation may, under certain limited circumstances, be held personally liable for such activities. Because Ki Tae Kim engaged in no activities either personally or in the name of a corporation with these plaintiffs, the theory has no applicability to him, regardless of whether he gave value for his stock.
In regard to the claims that Ki Tae Kim aided and abetted the effort to place the assets of Iowa Tae Kwon Do beyond the reach of its creditors, this would render him personally liable only to the extent of the harm caused the plaintiffs. I agree with the conclusion of the court of appeals that no harm was caused the plaintiffs from concealment of Iowa Tae Kwon Do assets because the corporation had no assets available for payment of creditors’ claims. Indeed, it appears that through Ki Tae Kim’s efforts in operating Acta he has created assets in that corporation through patrons’ dues upon which plaintiffs have *600levied execution. In view of our holding on the continuing corporation issue, the organization and operation of Acta has benefited plaintiffs in collecting their claims rather than hindering them.
SCHULTZ, J., joins this concurrence in part and dissent in part.