Zaist v. Olson

Zaist (plaintiff) performed clearing and grading of land in Groton, New London, and Waterford, Connecticut, to be developed for shopping centers. At times, Martin Olson (Olson) (defendant) owned this land individually. At other times, various corporations owned by Olson owned this land, including Martin Olson, Inc. (Olson, Inc.) (defendant). Zaist and other contractors (plaintiffs) dealt with Olson, who directed them to The East Haven Homes, Inc. (East Haven) (defendant) for payment. East Haven had few assets but received funds to pay the contractors through bank loans arranged by Olson and secured by the New London land. All checks issued to pay bills were East Haven checks signed by either Olson, as president, or its vice president. Olson, Olson, Inc., East Haven, The New London Shopping Center, Inc., and Viking, Inc., had offices at the same address. Olson’s secretary also served as secretary and bookkeeper for Olson, Inc., and East Haven. During Zaist and the other contractors’ work, East Haven maintained an office and a checking account, kept corporate and financial records, filed corporation returns, and had employees. The record reflected a single meeting of Olson, Inc., at which it voted to sell land to The New London Shopping Center, Inc., as well as a single meeting of Viking, Inc., which authorized Olson to borrow money as he deemed advisable. East Haven’s only corporate action found relating to these projects consisted of two votes authorizing contracts with Olson, Inc., which were never entered into, to build shopping centers in Groton and New London. Zaist was owed $23,000 and sued Olson, Olson, Inc., and East Haven. The lower court found for Zaist against Olson, Olson, Inc, and East Haven based on the referee’s report and an agency relationship.