J & J Materials, Inc. v. Conyers Seafood Co.

Smith, Judge. Appellant J & J Materials, Inc, filed an action on account and obtained a judgment exceeding $27,000 against appellee Conyers Seafood Company, Inc. (“CSC”) ,for seafood CSC procured from appellant in 1988. CSC was at that time a “one-man corporation” owned by [64] appellee L. W. Evans. The seafood delivered to CSC was used in a business venture known to the public as ‘‘Conyers Seafood.” Appellant brought the present action claiming fraud and deceit and also seeking to “pierce the corporate veil” against appellees CSC, L. W. Evans, and Marilyn Evans, who is L. W. Evans’s wife and owner of nonparty L & M Evans, Inc. The latter entity succeeded CSC as operator of “Conyers Seafood.” This appeal is from the grant of directed verdict against appellant on both theories. 1. We find no error in the directed verdict in favor of Marilyn Evans. She made no fraudulent representation to appellant, nor was she a shareholder in CSC. With respect to her, appellant’s enumerations are without merit. 2. We likewise find no error in the directed verdict in favor of L. W. Evans on appellant’s fraud claim. Appellant bases this claim on certain responses to post-judgment interrogatories made following appellant’s 1988 action against CSC. Essentially, appellant claims it reasonably believed CSC was no longer in business as a result of the representations made. However, the testimony of appellant’s sole shareholder, James R. Johnson, belies this contention. Johnson admits that after this time he “called Conyers Seafood every time he called [his] attorney, and they always answered it Conyers Seafood,” and that the number dialed was the “[e]xact same number we did business with and sold them the product on, which led me to believe that they were still in business.” Since appellant’s owner and president did not in fact believe the interrogatory responses based on his own further investigation, there is simply no basis for a fraud claim against Evans. The trial court did not err in directing a verdict in favor of Evans on appellant’s fraud claim. 3. Based on our holding in Division 2, we need not consider appellant’s enumeration regarding the trial court’s refusal to allow evidence of Evans’s prior bankruptcy experience, which appellant sought to introduce specifically in support of his fraud claim. 4. However, appellant’s claim that it should be allowed to “pierce the corporate veil” of CSC and seek satisfaction against Evans personally as CSC’s sole shareholder is a different matter. “In Georgia, the standard used to review the grant or denial of a directed verdict is the any evidence test. Where there is no conflict in the evidence as to any material issue, and the evidence introduced, with all reasonable deductions therefrom, shall demand a particular verdict, such verdict shall be directed.” (Citations and punctuation omitted.) Hixson-Hopkins Autoplex v. Custom Coaches, 208 Ga. App. 820 (1) (432 SE2d 224) (1993). The question presented in this case “is whether the corporation serves as the alter ego or business conduit of its owner. To establish [65] this, it must be shown that the stockholders] disregard of the corporate entity made it a mere instrumentality for the transaction of [its] own affairs; that there is such unity of interest and ownership that the separate personalities of the corporation and the [owner] no longer exist; and to adhere to the doctrine of corporate entity would promote injustice or protect fraud. When litigated, the issue of ‘piercing the corporate veil’ is a jury question. For the issue to be submitted to a jury there must be evidence that the corporate arrangement was a sham, used to defeat justice, to perpetrate fraud[,] or to evade statutory, contractual or tort responsibility.” (Citations and punctuation omitted.) Derbyshire v. United Builders Supplies, 194 Ga. App. 840, 844 (2) (a) (392 SE2d 37) (1990). J & J Materials presented evidence that would authorize a jury to find that CSC was a mere business conduit for L. W. Evans. That evidence, viewed in J & J Materials’ favor, shows that CSC received nothing more than the trade name “Conyers Seafood” from Evans when it was formed; that CSC paid for the operation’s furniture despite the fact that such furniture was owned by Evans personally; that Evans personally sold the retail end of the business — a business that supposedly belonged to CSC; and that L & M Evans, Inc. is reaping the benefits of the Conyers Seafood trade name and good will even though CSC was never compensated for it. This evidence is certainly sufficient to present a jury question on whether Evans should be held personally liable to J & J Materials on the prior judgment against CSC. Derbyshire, supra. To this extent, the court’s judgment must be reversed. Judgment affirmed in part and reversed in part. Pope, C. J., Birdsong, P. J., Beasley, P. J., Andrews, Johnson, Blackburn, JJ., and Senior Appellate Judge Harold R. Banke concur. McMurray, P. J., dissents as to Division 4 and the judgment.