Court Opinion

ID: 9579009
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:50:35.856341+00
Date Added: 2024-06-11T13:34:09.812018
License: Public Domain

Deen, Presiding Judge,
dissenting.
The majority’s reliance in Division 1 on Fountain v. Burke, 160 Ga. App. 262 (287 SE2d 39) (1981), is misplaced, as that case is a *218physical precedent only, and because it concerns the theory of misappropriation by a shareholder of the assets of an insolvent corporation. Compare Abbott Foods of Ga. v. Elberton Poultry Co., 173 Ga. App. 672, 673 (2) (327 SE2d 751) (1985). “There is some authority that equity may decree a corporate officer or stockholder personally liable for a corporate debt where it is shown that he had misappropriated corporate assets. [Cits.] However, equitable relief was neither sought in the [Hyzers’ third-party] complaint [or Shean’s cross-claim] nor could it have been granted by the trial court, the State Court of [Fulton] County, for it has no equity jurisdiction. [Cit.]” Scroggins v. Ridge Nassau Corp., 135 Ga. App. 547, 548 (1) (218 SE2d 448) (1975). Accordingly, the misappropriation theory has no viable applicability in this case.
Decided March 16, 1990
Rehearing denied March 29, 1990
Johnson & Montgomery, Harmon W. Caldwell, Jr., Wade H. Watson III, for appellants (case no. A89A1660).
Smith, Currie & Hancock, D. Lee Roberts, Jr., for appellant (case no. A89A1661).
Heyman & Sizemore, William H. Major, William B. Brown, for appellee.
Since the misappropriation theory is inapplicable, the issue to be resolved is whether the evidence adduced as to the corporation’s capitalization would authorize a piercing of the corporate veil. There is considerable doubt whether there is evidence of grossly inadequate capitalization in this case. However, even assuming that a genuine issue of fact did remain as to the corporation’s grossly inadequate capitalization, that issue would not be material. The existence of that factor, standing alone, will not provide a basis for piercing the corporate veil. Fountain is correct insofar as it notes that undercapitalization is in itself a perfectly legal business device. Fountain v. Burke, supra at 263 (2). It is, therefore, my opinion that “[t]here is no evidentiary basis in this action by law by which [Hickman] as an individual can be held liable to [the Hyzers or Shean] for [debts] which [were] incurred by the corporation].” Scroggins v. Ridge Nassau Corp., supra at 548 (1). Accordingly, I would affirm the trial court’s grant of summary judgment, and I must respectfully dissent to the majority’s reversal of that order.
I am authorized to state that Judge Sognier joins in this dissent.