A husband and wife incorporated a temporary staffing company in 1996. This corporation entered into an employment agreement, to provide employees, with another company. Included in the employment contract was the provision that the staffing company would "PAY FOR ALL... WORKERS COMP INSURANCE."
Later, the company that contracted for the employees got a letter from State Fund advising that, after reviewing the company's paperwork, its employees were NOT legally covered for workers' compensation benefits.
As a result, the company sued the staffing corporation in 2004 for the cost of having to pay its own separate premiums to obtain coverage.
The staffing corporation was dissolved by its principals several months after the lawsuit was filed. After the dissolution, a settlement was ultimately reached between the staffing corporation and the company which had sued it in which the staffing company agreed to pay $103,000 plus interest for its breach of contract.
The former wife and president of the dissolved staffing company was thereafter deposed, after which motions were filed to add her and her husband to the judgment individually. The trial court granted the motion to pierce the corporate veil regarding the wife only.
The wife appealed.
After a thorough review of the legal requirement for piercing the corporate veil, as well as considering the wife's due process and public policy arguments, the Fifth District agreed with the trial court and affirmed the corporate piercing against the wife.
This is an unpublished decision, Correa Pallet v. Lambeth.
To read the opinion,
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