Walkovszky v. Carlton
Court of Appeals of New York
223 N.E.2d 6 (1966)
Carlton (defendant) owned 10 corporations (defendants), including, notably, Seon Cab Corporation. Each of the corporations owned one or two cabs, and the minimum amount of automobile insurance required by law. One of the cabs owned by Seon Cab was in an accident with Walkovszky (plaintiff). Walkovszky sued the cab’s driver, as well as Seon Cab (under a respondeat superior theory), Carlton (under a piercing the corporate veil theory), and all of Carlton’s other cab companies. In the lower court proceeding, Walkovszky claimed that the cab companies did not act as separate organizations, but were set up separately to avoid liability. The lower courts found that Carlton’s companies were set up to frustrate creditors, and that a creditor could sue Carlton. Carlton and his companies appealed.
Rule of Law
Holding and Reasoning (Fuld, J.)
Dissent (Keating, J.)
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