Country Contractors, Inc. v. A Westside Storage of Indianapolis, Inc.

A Westside Storage of Indianapolis, Inc. (Westside) (plaintiff) sued Country Contractors, Inc. (Country), and its shareholders Stephen and Jahn Songer (collectively, defendants) for breaching a contract for excavation work. Country originally formed in 1983 as Country Concrete, Inc., and made profits for 23 years. In January 2007, Country amended its articles, changing its name to reflect expanded services. Meanwhile, economic downturn hit the construction industry particularly hard. By late 2007 Country was suffering losses that continued through 2009, leaving Country bankrupt. Country’s bookkeeper kept separate accounts, and no evidence showed commingling or using corporate accounts for personal purposes. Country’s annual shareholder meeting minutes from 2007 through 2009 each consisted of one page, signed by the Songers as Country’s corporate officers, with identical language stating they had generally discussed the corporation, recognized satisfactory progress, and re-elected officers and directors. Westside admitted the Songers themselves were not involved in the excavation contract, as Westside dealt solely with someone else who disappeared before trial. The trial court pierced the corporate veil and entered judgment against the Songers personally, emphasizing that Westside had no other recourse because of Country’s bankruptcy. The Songers appealed.