• . . 
• 
III TIIF. TEr..!lITORIAL counT Of' Tilt VI~GIl1 15LM!DS 
DIvISION 0: ST. COOIX AT C;iP.IST!lINSTCO 
:-tAP'! E. GUSTAFSON, 
:>laintiif . 
v. 
BARCO 1-IANA:1A. INC.. ane 
ANITA PARASCONOOLA, 
Defendant. 
1 
1 
) 
crilL NO. 
1i71/1!)a~ 
1 
1 
) 
ACTIOII FOR BREACH or CONTRACT 
) 
AND OEBT 
1 
1 
1 
__________ 1 
EDI-IARD HASKINS JACOBS, ESQUIRE 
14ABA Church Street 
Christiansted, St. Croix 
U, S. Virqin Island, 
00820 
(809) 
77J-J~2::! 
(Attorney for PhintiH) 
JOHN F . JANES, ESQUIRE 
11'. King Street 
Christiansted, St. CrOix 
U.S. Virgin Islands 
00820 
(809) 773-0402 
(Attorney tor Defendant) 
PETERSEN. Judge 
This 
action 
i~ 
brought 
to 
recover 
an 
<'IInount 
olll~qedly due on II 
promi~(lory notl!!. 
Plaintiff has sued both 
the corpor<ltion which 
l.r. the debtor under the note, !larco 
;Lannnll, 
Inc. 
(Ilareo) • .. 
w':!ll ., 
Anita 
Pal:ilsconaola 
{[Iarilscondolll!, Clhn I'lllintiff ulloqes W<lS 
the Pr('sident <lnd 
n",~idcnt ,\<lent. .,t Barco. 
Plllint.itf 
~cek5 to 
r~covcr from 
p<lraseo~dol~ ny diereqording the corporat.e ('ntity, and c13ims 
• 
GUST,\fSOIl v. BARCO ,U\tl/l.:IA, !;lC •• , 
PARASCOtlDOL.'" 
CIVIL 110. 671/1982 
ACTlotl FOR ERE,\Cl! OF CONTRACT ArID OeDT 
Page 2 
that Parascoodola is the alter ego of Barco. 
Defendant 
Parascondol~ has 
moved to dismiss 
t~e action against her 
individually under Rule 12(bl (6), Fed. R. elv. P .• and argues 
that the complaint is insufficient and fail& to state a claim 
IIgllinst her. 
'i'he plainti:! opposes thi. motion, stating that 
the allegations in the complaint All~J hor to pursue her claim 
against Parascondola. 
It is clear that under particular circumstances the 
corporation may be disreg<llrdsd as an intermediate bahleen the 
ultimate person and the adverse party. 
Such is the rase when 
the corporate nntity 
s<"!rves 
merely 
as the al ter ego or 
business 
conduit 
of 
individual. 
Under 
such • 
circumst .... nce. 
when an in;ustice has been pP.orpetratad on a 
party who 
has dealt with the corporation. 
the alter ego 
doctrine will operate to impose liability on the individual 
who use.'! the corporation as an instrumcntl\lity to conduct 
personal business. 
Sec 
I!anqor runta Ornrationll. 
Inc. 
v. 
30'1noor (, AroostOOK R. Co .• 417 U. S. 703. 94 S.Ct. 2578. 41 L. 
t:n. 
2d 418 
(l97~1. 
Sec ~ 
1 IL rlatcher. C}"clopedia of 
Cor"Ooriltion, Sections 41-41.3 at \66-208 (Perm. Ed. Rev. 1')74 
b Cum. 5upp. In:!). 
,\ 
courc: 
mUBt 
p.y.crci s f' 
c~ution 
.... hcn 
considering 
· ... hCl ttu"r 
t o 
disregard 
the 
<::orpc r.:ltc 
entit", 
lind 
the high 
GUSTAFSON v. 9/'1RCO 
~II\lIANA, IUC., & PARASCotlDOLA 
CIVIL NO. 671/1982 
ACTIOII FOR SnEACfl Of' CONTRlIC":' liND DZBT 
Page 3 
ego nust be clearly 8~tabli.hed. 
~nerqv Reserves Croue, Inc, 
v. Sucerior Oil Co., 460 F. Sup'9 . 
483, 506 
fD. 
Kan. 1978). 
Sec ~ 
Fletcher, suora, Section 
41 at 29 (Cum . Supp. 1982). 
The burden of proving that the alter e90 doctorine should be 
applied loS vith the party seeking disregard of the cor'90rate 
entity. 
This burden is not 
~et by 
mere allegations of 
dor.lination and control of the corporation by the individual 
entitled to all of the corporation's profits. 
Rather, it must 
be sho\1O th .. t 
the se1)arate personalities of the corporation 
and the individual have ceased to e:(ist. 
See In Re Christian 
Porter Aluminum Co., 584 F.:!d 326, 338 (9th Cir. 1978). 
\1hcther 
those 
certain 
facti 
exist 
vhich 
would 
justify application by this Court of the alter ego doctrine, 
however, are questions of fact which the Plaintiff must prove 
at trial. 
At this stage ot the proceeding, 
the pleading 
stage, it is E2! the burden at the Plaintiff to prove , without 
a doubt, that Barco was the alter ego of Para~cond01a. It is 
the burden of PI .. intiff. <It this atage, to appropriately plead 
the nepcl for applic~tion of the ~ltcr 090 doctrine. 
The n~ re 
,llegation 
th .. t 
a 
corporation 
is 
the 
~lter 
~90 of 
an 
in(iividual is insu!'ficient absen t 
')11cqation:. of fact which 
"auld intlic1ttn that I"hc p.H:ty s!;!o kinq ':0 pierce the corporate 
'leil i5 the victim of "ome froud , 
inju!ltiCQ 01;" 
fund"m'Jntlll 
• 
• 
U:l.1I1rrlCSS. 
.. (T1 ho .. ppropriate oCCllllion 
~or di!lre"<lrdin9 the 
• 
GUSTI'.FSOIt v. O;\RCO !IANM1A, Inc •• to 
PAAASCDNDOLA 
CIVIL NO. 
671Jl~a2 
FlCTIOIl =OR BREACH OF CONTRACT AIID aI:BT 
Page 4 
corporate c:dstencc occurs ..,hen t.he court must prevent fraud, 
illegality. or injustice, or ~lhen :,eeoqnition of thp. corporate 
entity would. defeat public policy or shield SODao!'!e 
from 
liability for" crif!le,-
Zubik v. Zubik, 354 F.2d 267, 272 (3d 
Cir . 1967). 
~!!!2 Ll'Ib .. die Coal Co. v. Dlac!:, 672 F . ld 92, 
99 
(D.C . Cir. 1982) (fraud :"lot prereouisitl'!!, need only sho .... 
injustice or 
!unda~cntal 
untairne&.)~ 
Uni~ed States v. 
Pisani, 646 Fo2d 133, 68 ()d Cir. 1981) (element of injustice or 
fundaf.lental unfairness required) 1 
~loodd.le Inc., v. Fidelitv 
and Decosit Co, 
o f 
IIl1tvlllnd, 
378 F.ld 627, 
631 
(8th Cir . 
1967) : Henry v. General Hotors CorD., 
~36 F . Supp. 854, 357 
W.O.tLY. 1964); United Statell v. Standard Oil Co. of Calif., 
155 F. Supp . 121, 152-53 (S.D.fLY. 1957); United States Fire 
Ins. Co . v. National U. Fire Inl . , 107 Cal. IIpp . 3d 45G, 165 
Cal. Rptr. 726, 734 (Cal. Ct. IIpp. 1980); Hever v. Glcnmoor' 
Homes, Inc., 246 C"l. IIpp. 
2d 242, 
S4 Cal. Rptr. 786, 798 
(Cal. Ct. App. 1966); North .... estecn tlat. Bank v. Hetco Ctr., 
JO) 
~1.~1.2d )95, )!:\8-99 (Iowa 1981): 'lcKe!) 
v. Harri:;-Sl!vbold 
Co., 109 ~!.J. Su~(. 555, 264 A.2d 9B, lOB (1970); li.E. Hedger 
?r;;lnsD. Co:::o. v. Ira S. 
Ilu~hoy 
50n9, Gl tl .Y.S.2d B76, 880-81 
(l1.Y. ;'pp. Div. 1945); Tiqnott v. POinter, 580 S .',i.2<1 375. 
)81->12 (Tel':. Ci'l. App. 1978). 
The tllleglltion in the cOl:lplaint 
,'limply .. tate .. that 
P;;lrascondola, ~s the alter ego of ~1l1d 
• 
GUSTAFSON II. BARCO 
~lAtJAili\, H!C., 
~ PARASCONDOl.A 
CIVIL NO . 671/1982 
ACTION !"OR BReACH Of' CONTRACT 1I./lD OI::BT 
P.!Ige 5 
corporation, is, and has b~en. conducting. 
managing and controlling the .!Itfairs of 
the corporation since ita incorporation, 
as though it were her own business, 
And she has used the Defendant Corpor.!ltion 
for the purpose of entering into the 
promissory note referred to above, 
commiting (sic) the contract breach 
reterred to above. 
Nowhere are there facts or nlleg.!ltions .tllted which would 
indicate that, it the acts COMplained of were to be tre~ted as 
those of the corporation alone, an inequit",ble. unjust or 
fraudulent result would follow. 
As such, the complaint is 
insufficient . 
Therefore, Parascondol.!l's motion to dismiss the 
action against her individually should be granted.. 
1l00~ever , 
Court 
being 
unwilling 
to 
peremptorily 
foreclose 
Plaintiff's opportunity 
to have 
her claim d.eternined. 
on 
substantive rights r~ther than technicalities, and. in light of 
the liberal policy under the Fed.eral Rules of Civil Procedure 
which ~llow8 a plaintiff to cure formal d.efects in plcad.ings, 
sec 5 C. Wright (; A. r1iller Federal Practico and Procedure, 
Civil, Section 1357 at 611-14 (1969), the Plaintiff is granted 
leave to ~mend her complaint.