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Green v. Freeman

Court of Appeals of North Carolina

April 1, 2014

MICHAEL A. GREEN and DANIEL J. GREEN, Plaintiffs,
v.
JACK L. FREEMAN, JR., CORINNA W. FREEMAN, PIEDMONT CAPITAL HOLDING OF NC, INC., PIEDMONT EXPRESS AIRWAYS, INC., PIEDMONT SOUTHERN AIR FREIGHT, INC., AND NAT GROUP, INC., Defendants,
v.
LAWRENCE J. D'AMELIO, III, Third-Party Defendant

Heard in the Court of Appeals November 16, 2011.

Page 369

[Copyrighted Material Omitted]

Page 370

Guilford County. No. 2006-CVS-12622.

Thomas B. Kobrin, for plaintiff-appellants.

Forman Rossabi Black, P.A., by T. Keith Black, Gavin J. Reardon, and Elizabeth Klein, for defendant-appellant Corinna Freeman.

STROUD, Judge. Judges BRYANT and CALABRIA concur.

OPINION

Page 371

STROUD, Judge.

Appeal by defendant Corinna Freeman and cross-appeal by plaintiffs from order entered 8 July 2010 and judgment entered 2 June 2010 and by Judge Edwin G. Wilson, Jr. in Superior Court, Guilford County. Heard in the Court of Appeals 16 November 2011. By opinion entered 4 September 2012, this Court affirmed the trial court's orders. By opinion entered 8 November 2013, the North Carolina Supreme Court reversed this Court's opinion and remanded for consideration of additional issues.

This case comes to us on remand from the North Carolina Supreme Court, which reversed this Court's prior opinion and remanded for us to consider the issue of agency. We affirm the trial court's order allowing defendant Corinna's motion for directed verdict on the issue of agency.

I. Background

The relevant background facts have been laid out by our Supreme Court in Green v. Freeman, 367 N.C. 136, 136-139, 749 S.E.2d 262, 265-67 (2013) ( Green I ), and we will not repeat them here. The Supreme Court held that plaintiffs' evidence on breach of fiduciary duty was insufficient as a matter of law, but remanded for this Court to consider whether the trial court erred in allowing defendant Corinna Freeman's motion for directed verdict on an agency theory of liability and piercing the corporate veil. Id. at 146, 749 S.E.2d at 271.

II. Agency and Piercing the Corporate Veil

To hold Corinna personally liable for the actions of the corporation, plaintiffs must present evidence of three elements:

Page 372

(1) Control, not mere majority or complete stock control, but complete domination, not only of finances, but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own; and
(2) Such control must have been used by the defendant to commit fraud or wrong, to perpetrate the violation of a statutory or other positive legal duty, or a dishonest and unjust act in ...

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