Washington
How DeWitt Truck Brokers, Inc. v. W. Ray Flemming Fruit Co. applies in Washington: state-specific rules, key cases, and bar exam notes for Business Associations (Piercing the Corporate Veil).
Washington courts recognize the doctrine of piercing the corporate veil primarily to prevent fraud or injustice. The focus is on the relationship between the shareholders and the corporation, particularly whether the corporation was used as an instrument for wrongdoing.
In Washington, to pierce the corporate veil, a plaintiff must demonstrate that the corporation was an alter ego of the shareholder and that it would be unjust to allow the corporate form to shield the shareholder from liability.
The court held that piercing the veil is appropriate when the corporation is merely an instrumentality for the shareholder's personal dealings.
Established that equitable principles guide veil piercing, focusing on the use of corporate assets for personal gain.
The court emphasized the necessity of proving control and misuse of the corporate form to pierce the veil.
Washington's approach to piercing the corporate veil aligns with federal principles but places greater emphasis on equitable considerations and the intent behind the corporate structure. Unlike some federal interpretations, Washington emphasizes the personal involvement of shareholders in corporate misconduct.
Understanding the veil-piercing doctrine is essential for the Washington bar exam; candidates should focus on the requirements for establishing alter ego liability and notable state cases.