Sam's West, Inc. v. Silverman, No. 23-10922 (11th Cir. 2024)
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The case revolves around W.P. Productions, Inc. (WPP), a company owned by Sydney Silverman, and Sam's West, Inc. WPP, which sold kitchen products under the Wolfgang Puck brand to Sam's Club, owed significant debt to Sam's West. Despite this, WPP initiated a tort lawsuit against Tramontina U.S.A., Inc. and Sam's West. After a final judgment was entered against WPP, Sam's West filed a supplemental lawsuit to pierce WPP's corporate veil and hold Silverman personally liable for WPP's unpaid judgments. Silverman, who used a shared bank account for his personal and WPP's corporate funds, allegedly spent over $3 million from the shared account on personal expenses and transfers to himself and his relatives.
The United States District Court for the Southern District of Florida granted summary judgment in favor of Sam's West, piercing the corporate veil and holding Silverman personally liable for the judgments against WPP. The court adopted a Report and Recommendation (R&R) that determined Silverman was the alter ego of WPP, but did not establish the remaining elements of improper conduct or causing an injury. Both parties then moved for summary judgment regarding these elements. The court adopted a second R&R stating that the undisputed facts showed Sam's West was entitled to judgment as a matter of law on its veil piercing claim.
In the United States Court of Appeals for the Eleventh Circuit, Silverman appealed the district court's decision, alleging that the court improperly pierced the corporate veil on summary judgment. After reviewing the case, the appellate court affirmed the district court's decision. The court found no genuine dispute of material fact regarding the three elements for piercing the corporate veil in Florida: Silverman was the alter ego of WPP; Silverman used WPP for the improper purpose of evading Florida's Rule of Priorities; and this improper use of WPP's corporate form caused injury to Sam's West. Therefore, the court held that the district court correctly granted summary judgment in favor of Sam's West and pierced the corporate veil.
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