Dr. Steven A. Pottschmidt was employed by Dr. Thomas J. Klosterman , who was doing business as a corporation named Thomas J. Klosterman , M.D., Inc. Once Pottschmidt's original employment agreement ended, he decided to bring a breach of contract suit against Klosterman alleging that he, Pottschmidt , had not been paid the amount that was actually owed him under the agreement.
Within two months of the lawsuit, Klosterman created a new corporation, called Klosterman Family Practice, Inc. Klosterman Family Practice, however, did not employ anyone other than the staff of the first corporation, Thomas J. Klosterman , M.D., Inc. In addition, the second corporation had not moved from the original office, had not changed its phone number, had not purchased new equipment or new furniture, and had not taken on any new patients.
For a while, the two corporations held separate accounts at one bank. Eventually, however, the first company's bank account was terminated, and income for bills sent out by the first company were placed in the account of the second company.
Pottschmidt wants the court to permit him to pierce the corporate veil of both Thomas J. Klosterman , M.D., Inc., and Klosterman Family Practice, Inc., to hold Dr. Klosterman directly liable for the money owed to him. Is there enough evidence here to permit the veil piercing requested by the plaintiff? Explain.
Pottschmidt v. Thomas J. Klosterman , M.D., Inc. , 169 Ohio App.3d 824 (Court of Appeals of Ohio, Ninth District, Medina County).