Successor trustee for owners of bonds issued by city to finance construction of apartment complex brought action against construction limited liability company (LLC) and member for breach of contract and foreclosure, and, after apartment complex was sold at a sheriff’s sale, successor trustee amended its complaint multiple times to add claims for fraudulent transfers, deceit, and exemplary damages against individual with ownership interest in company which was the LLC’s sole member, and numerous entities associated with him.
Following a jury trial, the District Court entered judgment on jury verdict against defendants, jointly and severally, piercing the corporate veil. Defendants appealed.
The Supreme Court held that trial court appropriately pierced the corporate veil.
Trial court appropriately pierced the corporate veil to find individual’s numerous separate entities liable for deficiency judgment against construction limited liability company (LLC) following foreclosure on apartment complex financed by municipal bonds; testimony and evidence indicated that individual disregarded the entities’ corporate form and used them for personal purposes, jury found each defendant was the alter ego of both individual and the other defendants, and also found they fraudulently transferred roughly $2.9 million to the detriment of investors and engaged in a conspiracy to commit deceit.
Defendants, including individual and his various companies, were on notice of successor trustee’s claim for a deficiency judgment following foreclosure on apartment complex built by construction limited liability company (LLC) with ties to individual and companies and were able to fully defend themselves, and thus were not unfairly surprised by deficiency judgment finding them jointly and severally liable as alter egos of the LLC, where complaint plainly stated it “seeks the entire amount of the deficiency judgment from all Defendants” under its alter ego veil piercing counts, and the issues concerning veil piercing were fully litigated at trial.