Court Opinion

ID: 9820338
Source: CourtListenerOpinion
Date Created: 2023-09-01 07:07:46.36021+00
Date Added: 2024-06-11T07:38:39.104369
License: Public Domain

REIF, C.J.,
dissenting, with whom Gurich, J., joing.
11 The issue in this case is whether a corporate stockholder can incur secondary *1152liability for a workers' compensation award where the corporation failed to provide insurance and has no assets from which to pay the award. The majority holds that the general rule of limited liability shields stockholders from liability for such an award "[ulnless it can be shown that there is a design or scheme to perpetrate a fraud or defeat public convenience, justify wrong, or defend crime." 1 19, Majority Opinion.
T2 The 1989 case of Buckner v. Dillard 1939 OK 144, 89 P.2d 826, similarly construed the scope of limited hablhty to relieve a stockholder from secondary liability for a workers' compensation award; the second syllabus of the opinion declared: "the mere fact that a corporation is organized for the express purpose of avoiding personal liability . is not sufficient reason for piercing the corporate veil in order to impose secondary lability under the Workmen's Compensation Law on a stockholder, in the absence of fraud or device to evade the Workmen's Compensation Law." The Buckner opinion stated that this construction was based on "leading" federal case law. Id. at ¶ 21, 89 P.2d at 329.
T3 My chief disagreement with the majority's adherence to the rule in Buckner lies in the fact that both federal case law and this Court have embraced a broader rule for piercing the corporate veil, since Buckner was decided. The United States Supreme Court has said that the corporate veil may be disregarded when "essential to the end that some accepted public policy may be defended or upheld." Anderson v. Abbott, 321 U.S. 349, 362, 64 S.Ct. 531, 88 L.Ed. 793 (1944). The Court has also said the corporate form may be disregarded "in the interest of justice where it is used to defeat an overriding public policy." Bangor Punta Operations, Inc. v. Bangor & Aroostook Ry. Co., 417 U.S. 703, 713, 94 S.Ct. 2578, 41 L.Ed.2d 418 (1974).
14 In the case of Sautbine v. Keller, 1966 OK 209, ¶ 15, 423 P.2d 447, 451, this Court noted that the "doctrine [of piercing the corporate veil] has been amplified to allow application not only for fraud or wrong, but also in cases where the facts require the court to disregard the separate existence of the corporation and the shareholders in order to protect the rights of third persons and accomplish justice." This Court has further observed that the corporate veil is simply "a legal theory introduced for the purpose of convenience and to subserve the ends of justice [and can not bel invoked in support of an end subversive of said policy[.]" Mid-Continent Life Ins. Co. v. Goforth, 1948 OK 244, 10, 193 Okla. 314, 143 P.2d 154, 157.
T5 Since 1995, published case law in this State has recognized that secondary lability for a workers' compensation award is properly extended to stockholders of an uninsured, defunct corporation in order to (1) uphold the public policy embodied in the Workers' Compensation Act, (2) protect the rights of innocent third persons (injured workers) and (8) serve the interests of justice. Thomas v. Vertigo, Inc., 1995 OK CIV APP 45, 900 P.2d 458 (cert. denied). Even though this Court is not bound to follow this pronouncement of law by the Court of Civil Appeals, the Thomas case is due great weight. Such weight derives from the fact that the Legislature has amended or revised the Workers' Compensation Act every year since 1995, and has never abrogated this interpretation of Workers' Compensation public policy nor its effect on stockholder lability.
T6 "Legislative familiarity with extant judicial construction of statutes in the process of being amended is presumed." Lekan v. P & L Fire Protection Co., 1980 OK 56, ¶ 5, 609 P.2d 1289, 1292. "Where a judicial construction has been placed upon the language of a statute for a long period of time, so that there has been abundant opportunity for the lawmaking power to give further expression of its will, its failure to do so amounts to a legislative approval and ratification of the construction placed upon the statute by the courts." McCain v. State Elec. Bd., 1930 OK 323, ¶ 0, 144 Okla. 85, 289 P. 759 (Syllabus 2).
T7 In reaching the conclusion that secondary liability was properly enforced against the stockholders in question, I share the majority's concern that the public policy basis for piercing the corporate veil should not be automatic nor be given overly broad effect. While every statute represents an expression of public policy on a particular sub-jeet, before such particularized public policy *1153is found to justify piercing the corporate veil, a thorough analysis and balancing of interests (such as done in the Thomas case) must support the recognition of any new exception to limited lability. In this regard, it is important to stress that all three of the modern or "amplified" elements for piercing the corporate veil were present in Thomas-public policy, protection of an innocent third party and furtherance of the interests of justice,
T8 For the foregoing reasons, I respectﬁﬂ— ly dissent.