Walkovszky v. Carlton

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Plaintiff

Walkovsky (hit by a cab)

Defendant

Carlton (claimed to be a stockholder of 10 corporations, each of which has 2 cabs registered to its name)

Plaintiff Argument

The plaintiff claims that all of these corporations are operated "as a single entity, unity, and enterprise". He also thinks that the stockholders should be liable because the purpose of the current corporate structure is to defraud members of the public.

Discussion

The court states that corporate veil can be pierced in the situation in which a person is using the corporation to do personal capacities rather then as a means to corporate ends. This is not being claimed in this case.

In the case that the plaintiff is arguing that all the cab corporations are part of one greater corporate entity. This might mean that the entire larger corporate entity would be financially responsible, but that doesn't mean that individual stock holders are liable.

The argument that each of the corporations has been split up just to get the lowest liability is a problem with the insurance laws that are set up by the legislature.

In order to have personal liability there would have to be something like "shuttling their personal funds and out of the corporations "without regard to the formality and to suit their immediate convenience."

Finally, the court says that creating multiple corporations is not a matter of fraud; the plaitiff's injuries are the same whether he is stricken by a cab owned by one corporation or a cab hit by many corporations.