Often in negligence matters against a corporation, the corporation does not have adequate insurance coverage to pay for the injured person’s medical expenses and damages. In these instances when the corporation does not have assets, a diligent plaintiff’s lawyer will go after the principal(s) of the corporation. This is known in legal terms as “Piercing the Corporate Veil”.

“Maryland law is crystalline ‘that the corporate entity will be disregarded only when necessary to prevent fraud or to enforce a paramount equity.'”
• The mere fact that all or almost all of the corporate stock is owned by one individual or a few individuals will not afford sufficient grounds for disregarding corporateness

If substantial ownership of the stock of a corporation in a single individual is combined with other factors which support disregarding the corporation on grounds of fundamental equity, a court may pierce the corporate veil. Factors weighed in an analysis to determine whether a corporation is the ‘alter ego’ or instrumentality of the individual stockholder are:
• Whether the corporation was grossly undercapitalized
• Corporation’s failure to observe corporate formalities
• Non-payment of dividends
• Corporation’s insolvency
• Dominant stockholder’s siphoning of corporate funds
• Nonfunctioning of officers or directors
• Absence of corporate records
• Corporation’s status as a façade for the stockholders’ operations
Continue Reading ›

To sustain an award of punitive damages in tort cases in the District of Columbia, the plaintiff must prove, by a preponderance of the evidence, that the defendant committed a tortious act, and by clear and convincing evidence that the act was accompanied by conduct and a state of mind evincing malice or its equivalent. Jonathan Woodner Co. v. Breeden, 665 A.2d 929, 938 (D.C.1995). The Standardized Civil Jury Instructions for the District of Columbia, No. 16.01[1], provides that the jury “may award punitive damages only if the plaintiff has proved with clear and convincing evidence:

(1) that the defendant acted with evil motive, actual malice, deliberate violence or oppression, or with intent to injure, or in willful disregard for the rights of the plaintiff; and

(2) that the defendant’s conduct itself was outrageous, grossly fraudulent, or reckless toward the safety of the plaintiff.”

Croley v. Republican Nat’l Comm., 759 A.2d 682, 695 (D.C.2000) (quoting Standardized Civil Jury Instructions for the District of Columbia, No. 16-1 (1998 ed.)); see also United Mine Workers of Am., Int’l v. Moore, 717 A.2d 332, 341 (D.C.1998).
Continue Reading ›