Court Opinion

ID: 213117
Source: CourtListenerOpinion
Date Created: 2011-03-23 19:55:34+00
Date Added: 2024-06-11T17:28:14.152969
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 10-1046

ORIN S. JOHNSON; GARY A. JONES; and AM-RAD, Inc.,

                Plaintiffs - Appellants,

           v.

SAMUEL B. ROSS, II,

                Defendant - Appellee.

Appeal from the United States District Court for the Southern
District of West Virginia, at Parkersburg.  Joseph R. Goodwin,
Chief District Judge. (6:08-cv-00313)

Argued:   December 9, 2010                 Decided:   March 23, 2011

Before AGEE and WYNN, Circuit Judges, and Patrick Michael DUFFY,
Senior United States District Judge for the District of South
Carolina, sitting by designation.

Affirmed by unpublished opinion. Judge Wynn wrote the opinion,
in which Judge Agee and Senior Judge Duffy concurred.

ARGUED: Leonard Rose, LATHROP & GAGE, LLP, Kansas City,
Missouri, for Appellants. William E. Hamb, ROBINSON & MCELWEE,
PLLC, Charleston, West Virginia, for Appellee.     ON BRIEF: Amy
Loth Allen, LATHROP & GAGE, LLP, Kansas City, Missouri; Greer S.
Lang, Lawrence, Kansas, for Appellants.       Joseph S. Beeson,
Christopher L. Hamb, ROBINSON & MCELWEE, PLLC, Charleston, West
Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.

                                2
WYNN, Circuit Judge:

       Under West Virginia law, “if benefits have been received

and    retained           under      such       circumstance               that     it     would     be

inequitable         and     unconscionable            to    permit         the    party    receiving

them       to    avoid     payment       therefor,         the       law   requires        the   party

receiving          the     benefits        to     pay       their          reasonable        value.” 1

Plaintiffs         contend        that    Defendant,             a    corporate       officer       and

shareholder,          must        disgorge       the        benefit         he      received       from

Plaintiffs.          However, because the benefits were conferred only

on the corporation and Plaintiffs make no argument for piercing

the    corporate          veil,    we    affirm       the    district            court’s    grant    of

summary judgment for Defendant.

                                                 I.

       In 1995, Gary A. Jones and Orin S. Johnson began designing

improvements to the welding process used in the construction of

window          frames.       In     1999,       they       received          two     patents       for

technology enabling the corners of a thermoplastic window frame

to be welded together using radiant heat instead of a flash. 2

       1
       Realmark Devs., Inc. v. Ranson, 208 W. Va. 717, 721-22,
542 S.E.2d 880, 884-85 (2000).
       2
       On January 5, 1999, Jones and Johnson received U.S. Patent
No. 5,855,720 entitled “Clamping Head for Use in Joining Plastic
Extrusions and Method Thereof.”     On May 11, 1999, Jones and
(Continued)
                                                  3
They       assigned    ownership       of      the     patents    to    Am-Rad,        Inc.,   a

Minnesota corporation.

       In 2004, Millennium Marketing Group, Ltd. (“Millennium”), a

Kansas      corporation       acting      as     the    marketing      agent     for    Jones,

Johnson,        and        Am-Rad      (collectively             “Plaintiffs”),          began

discussions with Simonton Building Products, Inc., and Simonton

Holdings,       Inc.,       (collectively            “Simonton”)       about    the     Am-Rad

technology.           At    the    time   of     these    discussions,         Simonton     was

controlled by Defendant Samuel B. Ross, II.

       On or about November 21, 2004, Millennium, Jones, Johnson,

and Am-Rad entered into a License Agreement with Simonton for

the licensing and use of the patented Am-Rad technology.                                    The

License       Agreement      granted        Simonton      an     exclusive      license 3      to

“prove       out”     the    Am-Rad       technology       and     adapt       it   “into      a

production       mode”       for    use     in    the    fenestration          (i.e.    window

making) industry.             The License Agreement further provided for

Johnson received U.S. Patent No. 5,902,447 entitled “Deflashing
Head and Method for Joining Plastic Extrusions.”
       3
       The agreement contemplated a series of licensing options
that could be exercised successively by Simonton upon payment of
specified sums of money.        On July 15, 2005, the license
agreement was amended by adjusting the duration of certain
licensing options and the amount of consideration paid to
exercise those options.      The parties do not dispute that
Simonton held an exclusive license to utilize the Am-Rad
technology, as contemplated in the License Agreement, during all
times relevant to this dispute.

                                                 4
the future establishment of a joint venture for the marketing of

the Am-Rad technology.            The joint venture would be organized as

a limited liability company formed and operated “for the sole

purpose of marketing and selling to others the right to use the

[Am-Rad]    Technology      in    the    fenestration          industry.”         Simonton

agreed to “contribute to the capital of the LLC any enhancements

or additional patents it may acquire as the result of placing

into production products utilizing the [Am-Rad] Technology.”

     Although      not    required       under    the        terms    of   the    License

Agreement,    at    Defendant’s      request      Jones        and    Johnson     provided

services,    as    well     as    expertise      and    confidential        information

regarding    the    Am-Rad       technology.           They    maintain     that       their

services     ultimately      contributed         to     the     development       of     new

fenestration       technology.           Specifically,          Plaintiffs’        amended

complaint states that Jones and Johnson provided “services and

efforts    with    regard    to    the    fixtures,          heat    plates,     drawings,

information pertaining to the time, temperature, and distance

settings for the welding process, as well as other confidential,

proprietary information and know-how.”                   Additionally, Plaintiffs

assert that Jones and Johnson made numerous trips to Simonton’s

research    and    development       facilities         in    Pennsylvania        and   its

production plants in West Virginia.                    Also, Plaintiffs provided

consultation services on the telephone and in person.

                                           5
       Plaintiffs further allege that they provided assistance to

Simonton in reliance on Defendant’s repeated representations and

assurances      that   they    would    be       compensated.         According   to

Plaintiffs,     Ross   and    other    Simonton      officers    told    Jones    and

Johnson “that Plaintiffs and Simonton were partners” with equal

rights to any jointly developed technology and the resulting

profits. 4

       Notwithstanding these oral assurances, Plaintiffs maintain

that Defendant acted as though Simonton was the sole owner of

technology developed with the assistance of Jones and Johnson.

Specifically, Plaintiffs contend that Defendant caused Simonton

to file patent applications for the jointly developed technology

without listing Plaintiffs as inventors. 5                 And Plaintiffs contend

that       Defendant   received        an       inflated     amount     of   merger

       4
       Plaintiffs maintain that Defendant assured them that they
were “partners” that were “in it together” and that Plaintiffs
would jointly own and share in the profits of any jointly
developed technology.
       5
       On December 30, 2005, Simonton filed a patent application
for window manufacturing technology.       On December 15, 2006,
Simonton filed a second application for window manufacturing
technology.    According to the complaint, both of Simonton’s
patent applications are still pending in the U.S. Patent and
Trademark Office.    Plaintiffs alleged that the Simonton patent
applications   proposed    claims   that  were   enhancements  or
improvements to the Am-Rad technology that had been jointly
developed by the parties.      Plaintiffs alleged, moreover, that
the Simonton patent applications violated the terms of the
License Agreement.

                                            6
consideration on the basis of representations to the proposed

buyer that Simonton owned the jointly developed technology.

       Defendant concedes that in 2005, he and the chief financial

officer      for       SBR,    Inc.    (“SBR”),      the    parent      company    of    which

Simonton         was     a     subsidiary,        discussed       the     possibility      of

marketing        SBR     for    sale. 6         Fortune     Brands,      Inc.,    (“Fortune

Brands”) was a Delaware corporation that appeared interested in

acquiring SBR.                At the August 2005 meeting of the Board of

Directors        of     SBR,    it     was   decided       that   Ross    should    contact

Fortune      Brands      to    gauge     its    interest     in   acquiring       SBR.     In

November 2005, SBR sent a formal offering memorandum to Fortune

Brands, and in December 2005 representatives of Fortune Brands

and    SBR   met       to     discuss     the   business      operations     of    the    SBR

subsidiaries.            Plaintiffs maintain that during these December

meetings, John Brunett, then-president of Simonton, represented

to    Fortune      Brands       that    Simonton     possessed       “new”   fenestration

technology.           Plaintiffs assert that Defendant knew that this was

false      and     failed       to      correct      Burnett’s       misrepresentations.

Fortune Brands made an initial offer to purchase SBR on December

       6
       Defendant was the chairman and chief executive officer of
SBR and also a member of SBR’s board of directors. [J.A. 303]
He was also chairman of Simonton’s board of directors. [J.A.
303] According to Defendant, he was one of some 344 stockholders
of SBR. [J.A. 303]

                                                 7
13, 2005.      In June 2006, Fortune Brands acquired 100% of SBR’s

outstanding stock for $595 million. 7

     Plaintiffs     filed      suit    against      Defendant    on    a   theory    of

unjust enrichment, 8 seeking restitution for “the increased value

Ross received in the sale of his entities and assets to Fortune

Brands”   as    a   result     of     the       jointly    developed    technology. 9

Plaintiffs also sought to compel Defendant to disgorge the value

of the confidential information shared with Simonton, the value

of the services provided, and the value of the jointly developed

technology itself.

     On   December       10,    2009,       the     district    court      entered    a

memorandum     opinion    and       order       granting    summary     judgment     to

Defendant on two grounds.               First, the court noted that West

Virginia law provides that “[a]n express contract and an implied
     7
       As noted by the district court, “[t]he actual transaction
involved several steps.”     Fortune Brands created Brightstar
Acquisition LLC, which merged into SBR on June 7, 2006. On June
9, 2009, with the approval of its shareholders, SBR merged into
SBR, LLC.   SBR’s shareholders received consideration for their
shares from Fortune Brands.
     8
       Plaintiffs’ initial complaint also included a claim for
breach of fiduciary duty.        That claim was deleted from
Plaintiffs’ First Amendment Complaint, filed on August 12, 2009.
     9
       Essentially, Plaintiffs allege that Defendant touted the
parties’ jointly developed technology to Fortune Brands and was
able to negotiate a higher sale price for the Simonton entities
and assets as a result of receiving the services of Jones,
Johnson, and Am-Rad than Defendant would have received had he
not improperly used Plaintiffs’ information and technology.
[J.A. 49]

                                            8
contract relating to the same subject matter can not co-exist.”

Case     v.    Shepherd,      140   W.    Va.       305,   311,    84 S.E.2d 140,    144

(1954).        The district court concluded that Plaintiffs’ unjust

enrichment          claim   was    precluded        because     the     License    Agreement

governed       the     identical         subject      matter. 10          Second,    as     an

alternative justification for its holding, the district court

noted        that     shareholders        are       generally      not    liable     for    a

corporation’s acts.               See Laya v. Erin Homes, Inc., 177 W. Va.
343, 346, 352 S.E.2d 93, 96-97 (1986) (“This limited liability

is one of the legitimate advantages of doing business in the

corporate form.”).                The district court opined that Defendant

acted on behalf of the corporation when he dealt with Plaintiffs

and when he negotiated the sale of SBR.                               The district court

found no justification for piercing the corporate veil, noting

Plaintiffs’ failure to even “advance such an argument.”                                    The

district       court        consequently        found      no     grounds    for    holding

Defendant personally liable.                Plaintiffs appealed.

        10
        We need not consider whether the district court erred in
ruling that the existence of the License Agreement precluded
Plaintiffs’ recovery for unjust enrichment, as we affirm on
separate grounds.   See Catawba Indian Tribe of S.C. v. City of
Rock Hill, S.C.,   501 F.3d 368, 372 n.4 (4th Cir. 2007) (“[W]e
review judgments, not opinions. We are accordingly entitled to
affirm the district court on any ground that would support the
judgment in favor of the party prevailing below.” (citation
omitted)).

                                                9
                                      II.

        “We   review   the    district   court’s    order    granting    summary

judgment de novo.” Robb Evans & Assoc., LLC v. Holibaugh, 609
F.3d 359, 364 (4th Cir. 2010).              Summary judgment is appropriate

if “there is no genuine dispute as to any material fact” and

Defendant, the movant, “is entitled to judgment as a matter of

law.”     Fed. R. Civ. P. 56(a).              In conducting our review, “we

view all facts and reasonable inferences therefrom in the light

most favorable to the nonmoving party.”              Battle v. Seibels Bruce

Ins. Co., 288 F.3d 596, 603 (4th Cir. 2002).

        Defendant suggests that this well-established standard of

review should be modified, “at least with regard to inferences

that may be drawn from undisputed facts.”              Brief of Appellee at

28.      Defendant maintains that “the clearly erroneous standard

would be the proper standard to apply to inferences drawn by the

district      judge    from   the   undisputed    evidence    at   the   summary

judgment stage.”        Brief of Appellee at 29.

        Defendant’s argument stems from a mistaken interpretation

of this court’s opinion in International Bancorp, LLC v. Societe

des Bains de Mer et du Cercle des Etrangers a Monaco, 329 F.3d
359 (4th Cir. 2003).          In that case, the plaintiff contended that

the district court exceeded its summary judgment authority by

making factual determinations.                Id. at 362.    Noting that the

parties had “agreed to submit the voluminous record to the court

                                         10
for     dispositive         decision”       and    that        the     district       court’s

disposition simply resolved disputes concerning the inferences

drawn from undisputed material facts, we held that the district

court had properly proceeded to judgment.                       Id.     However, we also

noted that because the district court “engaged in fact-finding

to dispose of the matter, we review its findings of fact for

clear error.”         Id.

        Defendant asserts that International Bancorp supports the

proposition      that       where    only    equitable         relief     is    sought,     we

review    the    inferences         drawn    by   the       district    court       for   clear

error.         Defendant’s          reliance      on    International           Bancorp     is

misplaced.       The clear error standard announced there referred

only to our review of factual findings made by the district

court     in    the    rare    scenario        where        such     “fact-finding”        was

appropriate at the summary judgment stage.                             Here, no factual

determinations were made.                   Lacking any predicate findings of

fact by the district court, we decline to apply a clear error

standard.        Instead,       our     review         is    limited     to     a    de   novo

determination of whether Defendant was entitled to judgment as a

matter    of    law    with    respect       to   Plaintiffs’          unjust       enrichment

claim.

                                             11
                                            III.

       Generally, a plaintiff seeking restitution on a theory of

unjust enrichment must establish (1) a benefit conferred on the

defendant by the plaintiff, (2) an appreciation or knowledge by

the    defendant        of    the    benefit,        and    (3)     the     acceptance      or

retention        by     the     defendant       of     the        benefit        under     such

circumstances as to make it inequitable for the defendant to

retain the benefit without payment of its value.                                   26 Samuel

Williston & Richard A. Lord, A Treatise on the Law of Contracts

§ 68:5 (4th ed. 2003); see also Realmark Devs., 208 W. Va. at

721-22, 542 S.E.2d at 884-85 (“[I]f benefits have been received

and    retained         under       such    circumstance          that      it     would    be

inequitable       and    unconscionable        to     permit      the     party    receiving

them   to   avoid       payment      therefor,       the    law    requires       the     party

receiving the benefits to pay their reasonable value.”); Dunlap

v. Hinkle, 173 W. Va. 423, 427 n.2, 317 S.E.2d 508, 512 n.2

(1984) (“Unjust enrichment of a person occurs when he has and

retains money or benefits which in justice and equity belong to

another.” (quotation omitted)).

       We need not consider whether Jones and Johnson conferred a

benefit     on   Simonton.           This   case     does    not    concern       an     unjust

                                             12
enrichment claim against the beneficiary corporation. 11                                    Instead,

Plaintiffs           seek         restitution        from            Ross         individually.

Accordingly,         the     threshold         question         is     whether         Plaintiffs

conferred       on    Ross        individually       a     benefit          which          would    be

inequitable       for       him     to    retain     without           making         payment        to

Plaintiffs.

       Our review of the record reveals no such benefit.                                     Each of

the actions taken by Johnson and Jones benefitted Ross, if at

all,    only    indirectly         by    virtue     of    his    status          as    a    Simonton

shareholder.         Plaintiffs cite no West Virginia case establishing

that an unjust enrichment action can be sustained against the

indirect       recipient      of     a    benefit        conferred          by    a    plaintiff.

Different       states       have        reached         opposite       conclusions                when

addressing this issue.               Compare Extraordinary Title Servs., LLC

v. Fl. Power & Light Co., 1 So. 3d 400, 404 (Fla. Dist. Ct. App.

2009) (affirming dismissal of unjust enrichment claim because

“Plaintiff      cannot       allege      nor    establish            that    it       conferred       a

direct benefit on [defendant]”); Johnson v. Microsoft Corp., 106
Ohio St. 3d 278, 286, 834 N.E.2d 791, 799 (2005) (“The rule of

law is that an indirect purchaser cannot assert a common-law

       11
        In a related case filed in federal district court in
Kansas, Plaintiffs sued Simonton and Fortune Brands for, inter
alia, unjust enrichment. See Johnson, et al. v. Simonton Bldg.
Prods., Inc., No. 08-cv-2198 (D. Kan. 2008).

                                               13
claim for restitution and unjust enrichment against a defendant

without establishing that a benefit had been conferred upon that

defendant by the purchaser.”) with Bank of Am. Corp. v. Gibbons,

173 Md. App. 261, 271, 918 A.2d 565, 571 (Md. Ct. Spec. App.

2007)    (“[A]    cause    of     action      for   unjust     enrichment      may   lie

against a transferee with whom the plaintiff had no contract,

transaction,      or     dealing,       either      directly    or    indirectly.”);

Freeman Indus., LLC v. Eastman Chem. Co., 172 S.W.3d 512, 525

(Tenn. 2005) (“[T]o recover for unjust enrichment, a plaintiff

need not establish that the defendant received a direct benefit

from the plaintiff.”); State ex rel Palmer v. Unisys Corp., 637
N.W.2d 142,   155     (Iowa    2001)    (“We     have    never    limited   [unjust

enrichment] to require the benefits to be conferred directly by

the plaintiff.”).          We decline Plaintiffs’ invitation to settle

this     state-law       question,      not      least     because    doing     so   is

unnecessary to reach our disposition.

       If West Virginia law would not allow an unjust enrichment

suit against an indirect beneficiary, summary judgment should

have been granted to Defendant.                 If, alternatively, an indirect

beneficiary      could    be     sued   for     unjust     enrichment,   Plaintiffs’

unjust     enrichment          action     still      fails     because      Defendant

benefitted only as a Simonton shareholder; thus, to wrest the

benefit from him would require us to pierce the corporate veil

shielding him from liability.

                                           14
     Assuming that the technical assistance provided by Johnson

and Jones was valuable, that value was realized by Simonton, the

company    undertaking         to    improve       the    Am-Rad       technology,            rather

than by Defendant individually.                      Similarly, the value of the

confidential information disclosed to Simonton employees cannot

be said to have been conferred on Defendant.                                Further, insofar

as Plaintiffs seek to compel Ross to disgorge the value of the

jointly developed technology, they fail to demonstrate that Ross

himself    became       the    unjust        recipient         of     the    value       of    that

technology.

     Indeed,      the    only       mention    of    a    benefit         realized       by    Ross

individually      is    Plaintiffs’          allegation         that      Ross     received      an

inflated    payment      as     a    Simonton       shareholder           when     the    company

merged     with         Fortune         Brands           by         virtue         of     alleged

misrepresentations          that      Simonton      owned       the    technology         jointly

developed with the assistance of Johnson and Jones.                                       Despite

their    attempts      to     avoid    the    consequence            of     this    allegation,

Plaintiffs    essentially           contend        that       the    corporation         unjustly

received a benefit in the form of increased merger consideration

and then ask us to wrest a portion of that increased merger

consideration       from      Ross,     an    individual             shareholder,        on     the

grounds that Ross facilitated the unjust enrichment.

     However, “[t]he law presumes . . . that corporations are

separate    from    their       shareholders.”                S.    Elec.     Supply      Co.    v.

                                              15
Raleigh Cnty. Nat. Bank, 173 W. Va. 780, 788, 320 S.E.2d 515,

523 (1984).           Even assuming arguendo that Simonton was unjustly

enriched, this does not, without more, give rise to liability on

the part of Ross as an individual.                   See U.S. ex rel. Purcell v.

MWI   Corp.,      520    F.    Supp.    2d    158,    173    (D.D.C.    2007)     (“The

plaintiff may only rely on an inference that a stockholder by

means      of   his     corporate      equity     received    a   benefit    if     the

plaintiff shows that the stockholder abused the corporate form,

using it as his own alter ego to perpetuate fraud-in which case,

the corporate veil should be pierced.”). 12

      West      Virginia      law   recognizes       that    “[u]nder    exceptional

circumstances, . . . . ‘[j]ustice may require that courts look

beyond the bare legal relationship of the parties to prevent the

corporate form from being used to perpetrate injustice, defeat

public convenience or justify wrong.                     However, the corporate

form will never be disregarded lightly.’”                    Laya, 177 W. Va. at

347, 352 S.E.2d at 97 (quoting S. States Co-op., Inc. v. Dailey,

167 W. Va. 920, 930, 280 S.E.2d 821, 827 (1981)).                           Moreover,

      12
       See also Metalmeccanica Del Tiberina v. Kelleher, No. 04-
2567, 2005 WL 2901894, at *4 (4th Cir. 2005) (unpublished)
(affirming   rejection  of  unjust   enrichment  claim   against
corporate officer with observation that       “[a]t most, [the
plaintiff] can demonstrate that [the defendant corporation], as
opposed to [its owner], received a nongratuitous benefit.    Any
benefit [the owner] received . . . came from [the corporation]-
not [the plaintiff]”).

                                             16
“the    burden    of   proof   is   on   a     party      soliciting      a   court   to

disregard a corporate structure.”                  S. Elec. Supply Co., 173 W.

Va. at 787, 320 S.E.2d at 522.            We agree with the district court

that Plaintiffs have not carried that burden.

       Piercing the corporate veil “is an equitable remedy, the

propriety of which must be examined on an ad hoc basis.”                         Laya,
177 W. Va. at 347, 352 S.E.2d at 98.                        “[D]ecisions to look

beyond, inside and through corporate facades must be made case-

by-case,    with    particular      attention       to    factual    details.”         S.

Elec. Supply Co., 173 W. Va. at 787, 320 S.E.2d at 523.                               For

this    reason,    “the    propriety     of    piercing        the   corporate    veil

should rarely be determined upon a motion for summary judgment.

Instead, the propriety of piercing the corporate veil usually

involves numerous questions of fact for the trier of the facts

to determine upon all of the evidence.”                        Laya, 177 W. Va. at

351, 352 S.E.2d at 102.

       The Laya court’s reluctance to absolutely foreclose summary

judgment accommodates courts faced with cases, such as this one,

wherein    no    attempt   whatsoever     is       made   to    “pierce   the   veil.”

Indeed, Plaintiffs insist that “[i]t is not necessary to pierce

the corporate veil in order to impose personal liability” on

Ross.    Opening Brief at 35.

       Plaintiffs argue that because Ross, acting as a corporate

officer,    knowingly      participated       in    alleged      wrongdoing,     he    is

                                         17
personally liable.               Plaintiffs cite a host of cases for the

proposition         that   a    corporate         officer     may     be    held     personally

liable for tortious activity of the corporation when the officer

sanctions or participates in the wrongful conduct.                                   See, e.g.,

Bowling v. Ansted Chrysler-Plymouth-Dodge, Inc., 188 W. Va. 468,

472, 425 S.E.2d 144, 148 (1992) (“‘A director or an officer of a

corporation         does   not      incur       personal    liability         for    its     torts

merely       by   reason       of    his       official    character         unless     he      has

participated in or sanctioned the tortious acts[.]’” (quoting

Cato    v.    Silling,      137      W.    Va.    694,     717,       73 S.E.2d 731,      745

(1952))).           However,        Plaintiffs        point      to    no    tort     committed

against      them    by    either     Simonton        or    Ross.          Moreover,       we   are

mindful      that    the   theory         of    recovery    in    an       unjust    enrichment

action renders it more akin to a contract action than a tort

action.       See Ross Eng’g Co. v. Pace, 153 F.2d 35, 45 (4th Cir.

1946) (observing that in cases of unjust enrichment “a contract

to pay is implied in law”).                       We recognize that a judicially

implied “quasi-contract” is not actually a contract.                                   However,

we are disinclined to analogize to the cases cited by Plaintiffs

given     the       different        justifications           that         support     imposing

personal liability on corporate officers for corporate torts as

opposed to corporate contractual obligations.                               S. Elec. Supply

Co., 173 W. Va. at 787 n.13, 320 S.E.2d at 522-23 n.13. (“Some

courts will more readily disregard a corporate form in cases of

                                                 18
tort    liability     than    in    contract       cases    because   contracts      are

voluntarily entered into with the corporate structure.”).

        Piercing the veil in the context of a breach of contract

does not rest on participation liability, as it would under a

tort theory.         Instead, the Supreme Court of West Virginia has

stated that

        [I]n a case involving an alleged breach of contract,
        to “pierce the corporate veil” in order to hold the
        shareholder(s) actively participating in the operation
        of the business personally liable for such breach to
        the party who entered into the contract with the
        corporation, there is normally a two-prong test: (1)
        there must be such unity of interest and ownership
        that the separate personalities of the corporation and
        of the individual shareholder(s) no longer exist (a
        disregard of formalities requirement) and (2) an
        inequitable result would occur if the acts are treated
        as those of the corporation alone (a fairness
        requirement).

Laya, 177 W. Va. at 349, 352 S.E.2d at 99.                     This two-prong test

underscores why piercing the corporate veil would be imprudent

under     a   theory    that       an     implied    contract       existed     between

Plaintiffs and Defendant.                There was no “unity of interest and

ownership”     that     would       establish        that    Ross     was     impliedly

contracting     on     his    own       behalf.      Instead,      even     taking   the

evidence in the light most favorable to Plaintiffs, Ross made

promises,     whether        express       or     implied,    on    behalf     of    the

corporation.      Thus, if a benefit was conferred on the basis of

those promises, the corporation, not its officers, would be the

entity unjustly enriched by the failure to keep those promises.

                                            19
     Accordingly, we conclude that Defendant is not subject to

personal liability for unjust enrichment, if any, on the part of

Simonton.   Because Plaintiffs fail to demonstrate any benefit

retained by Defendant other than that realized by virtue of his

status as a shareholder, they cannot maintain a cause of action

for unjust enrichment against him individually.    The district

court therefore did not err in granting Defendant’s motion for

summary judgment.

                                                        AFFIRMED

                               20