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West Worldwide Industries, Inc., v. Levin

A-0637-02T3 (N.J. Super. App. Div. 2004) (Unpublished)

CORPORATIONS; VEIL PIERCING—In the absence of fraud or injustice, courts generally will not pierce the corporate veil to impose liability on corporate principals.

A consulting company engaged an independent consultant to do work on its behalf. When the consulting company was not fully paid by its own client, it reduced the agreed-upon payment to its independent contractor on the theory that it was the independent contractor’s fault that the consultant’s own customer refused to pay the originally agreed-upon amount. In the law suit that followed, the independent contractor lodged claims against the both the consulting company and its president. The Court did not find any evidence to support the assertion that the consulting company’s president personally owed the independent contractor any money. The president had signed all agreements in his capacity as president. The Court repeated the oft spoken words: “A corporation is a separate entity from its shareholders… .” It also pointed out the basic policy in these matters is “[i]n the absence of fraud or injustice, courts generally will not pierce the corporate veil to impose liability on the corporate principals.” Here, there was no evidence of fraud or injustice.


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