Before McMILLIN, P.j., King And Southwick, JJ.
The opinion of the court was delivered by: McMILLIN, P.j.
DATE OF JUDGMENT: 10/27/97 TRIAL JUDGE: HON. ROBERT LEWIS GIBBS
COURT FROM WHICH APPEALED: HINDS COUNTY CIRCUIT COURT
NATURE OF THE CASE: CIVIL - CONTRACT
TRIAL COURT DISPOSITION: DEFAULT JUDGMENT AGAINST JENKINS BUILDERS; AFTER TRIAL PROCEEDED AGAINST TERRY JENKINS, INDIVIDUALLY, COURT RULED CONTRACT WAS A JOINT VENTURE, THAT BOTH PARTIES HAD LOST MONEY AND THE PLAINTIFF HAD NO RECOVERY, AND THAT TERRY JENKINS SHOULD NOT RECOVER ON COUNTER-CLAIM.
DISPOSITION: AFFIRMED - 2/23/99
¶1. This case comes before the Court as an appeal from a decision of the Circuit Court of Hinds County sitting as an intermediate appellate court reviewing a judgment entered in the County Court of Hinds County. The county court, sitting without a jury, denied relief to David Richardson, who sought to enforce a breach of contract action against Terry Jenkins, the sole shareholder of Jenkins Builders, Inc. on the theory that Jenkins had so neglected to observe the basic legal formalities to establish and maintain his corporation that the corporate veil should be penetrated and personal liability attach to Jenkins. The county court refused to do so and the circuit court affirmed the county court's decision. This subsequent appeal to this Court ensued. We affirm the circuit court.
¶2. David Richardson entered into an agreement with Jenkins Builders, Inc. whereby the corporation would construct and sell to Richardson a duplex property in a development known as Thousand Oaks. Properties in the development, though marketed to different individuals, were operated by a management organization as a single enterprise and all such duplexes were eligible for certain tax credits to the individual owners after construction if the improvements were rented to eligible low income tenants. Pursuant to the terms of the contract, Richardson delivered to Terry Jenkins a check payable to the corporation in the amount of $7,000 as earnest money. Jenkins deposited the money to a business account that he admitted was not a corporate account. However, he claimed that this account was simply a "clearing account," and there was evidence in the record that the $7,000 was, in fact, immediately disbursed from that account with $5,000 going to an individual who acted as an agent in pursuing Richardson's involvement in the project, and the remaining $2,000 being transferred to a Jenkins Builders corporate account.
¶3. For reasons that are not entirely clear, the contract was not performed. Jenkins claims that he did not construct the duplex because Richardson never followed through on his obligation to obtain private financing for the construction of the duplex. Richardson's testimony is, to an extent, contradictory. He seems to claim at one point that he understood that Jenkins was going to be responsible for obtaining the financing. At other times, he only faults Jenkins for failing to deliver evidence of title to the property needed for Richardson to apply for financing. In all events, after a period of time transpired with no activity, Richardson demanded the return of his $7,000 earnest money. That demand was not met, prompting Richardson to file this action seeking a judgment for the return of his money. The suit was commenced against both the corporation and Jenkins individually.
¶4. Jenkins Builders, Inc. did not file an answer to the action and a default judgment was entered against the corporation for the $7,000 earnest money together with a punitive damage award of $25,000. Richardson has, however, been unable to obtain satisfaction of this judgment beyond the seizure on writ of execution of one pickup truck titled in the corporate name which subsequently was sold at a sheriff's sale for $750.
¶5. For that reason, Richardson persisted in his separate claim against Jenkins individually. On this appeal, Richardson purports to raise three issues; however, having reviewed them, this Court is of the opinion that Issues One and Three in actuality involve the same question of law, i.e., whether the trial court erred in failing to pierce the corporate veil of Jenkins Builders, Inc. and finding its sole shareholder, Terry Jenkins, personally liable for the contract breach.
¶6. For reasons which we will proceed to set out, we decide that issue against Richardson. The effect of that is to ...