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Dirksing v. Blue Chip Architectural Products11/7/1994
ers' Comp. v. Widenmeyer Elec. Co. (1991), 72 Ohio App.3d 100, 105, 593 N.E.2d 468, 471. The corporate "veil" can be pierced and individual shareholders held liable for corporate misdeeds when it would be unjust to allow the shareholders to hide behind the fiction of the corporate entity. Courts will permit individual shareholder liability if the shareholder is indistinguishable from or the "alter ego" of the corporation itself. Belvedere, supra, at 287, 617 N.E.2d at 1085.
The corporate form may be disregarded and individual shareholders held liable for wrongs committed by the corporation when (1) control over the corporation by those to be held liable was so complete that the corporation has no separate mind, will, or existence of its own; (2) control over the corporation by those to be held liable was exercised to commit fraud or an illegal action against the person seeking to disregard the corporate entity; and (3) injury or unjust loss resulted to the plaintiff from that control or wrong. Id. at paragraph three of the syllabus. "The factors to be considered in determining when the above principles should be applied include the observance of corporate formalities, undercapitalization, fraud, and the result of unjust or inequitable consequences in the event the corporate fiction were retained." Link v. Leadworks Corp. (1992), 79 Ohio App.3d 735, 744, 607 N.E.2d 1140, 1146. The party seeking to impose individual liability on the shareholder bears the burden to prove the grounds for piercing the corporate veil. LeRoux's Billyle Supper Club v. Ma (1991), 77 Ohio App.3d 417, 423, 602 N.E.2d 685, 689-690.
In his fourth assignment of error, appellant states that the trial court erred in denying his motion to compel discovery of financial information about Keith Smith, Welling, BCAP, and BCE. Appellant argues that the trial court prevented him from proving his case. We find this assignment of error to be well taken.
Management of the discovery process lies within the discretion of the trial court. State ex rel. Daggett v. Gessaman (1973), 34 Ohio St.2d 55, 63 O.O.2d 88, 295 N.E.2d 659, paragraph one of the syllabus; Glick v. Marler (1992), 82 Ohio App.3d 752, 758, 613 N.E.2d 254, 258-259. The record shows that appellant had filed interrogatories seeking financial information about Waltek, BCAP, and BCE dating back to 1987. Appellees eventually supplied information from 1990, but refused to give information from before that time, claiming it was irrelevant. Appellant filed a motion to compel, which the trial court overruled. The trial court had already granted partial summary judgment to appellees on appellant's intentional tort claim. It found that even if Keith Smith, Welling, BCAP, and BCE were all alter egos, appellant still had to prove an intentional tort to recover against any of them. Since the trial could have concluded that appellant had not proven an intentional tort, the alter ego issue was no longer present in the case.
However, we have already concluded that the trial court erred in granting summary judgment on the intentional tort claim. Since appellant bears the burden of proof on the alter ego issue, he should not be denied the opportunity to discover any relevant information, and the trial court should decide what is relevant, not appellees. Accordingly, we conclude that the trial court abused its discretion in overruling appellant's motion to compel discovery. We sustain appellant's fourth assignment of error, and we remand the matter to the trial court to decide the motion to compel on its merits.
In his second assignment of error, appellant states that the trial court erred in granting summary judgment in favor of Welling and BCE. Appellant
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