# Pottschmidt v. Thomas J. Klosterman, M.D., Inc.

> Ohio Court of Appeals · December 29, 2006 · 169 Ohio App. 3d 824

URL: https://www.frixlaw.com/law-library/cases/3696488

## Case

- **Full name:** POTTSCHMIDT, Appellee, v. THOMAS J. KLOSTERMAN, M.D., INC. Et Al., Appellants
- **Court:** Ohio Court of Appeals
- **Decided:** December 29, 2006
- **Citations:** 169 Ohio App. 3d 824; 2006 Ohio 6964; 865 N.E.2d 111; 2006 WL 3825206
- **Precedential status:** Published
- **Opinion:** Dissent by Slaby
- **Judges:** Moore, Boyle, Slaby
- **Cited by:** 23 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/3696488

## How later opinions describe it (automated extraction)

- holding that evidence supported imposition of successor liability based on “fraudulent transaction” exception where new corporation was formed one month after third party sued predecessor corporation, predecessor’s sole shareholder acknowledged only that new corporation was fo…
- finding the final element of the Belvedere test satisfied because the “transfer of all of the original corporation’s assets to the new corporation . . . left the original corporation simply an empty shell and made it impossible for Dr. Pottschmidt to collect the judgment rende…
- finding alter ego doctrine applied where defendant was the manager and sole shareholder of both entities, neither defendant nor either entity followed corporate formalities, the defendant had complete control over both entities, and funds of each entity and the defendant were …
- finding a mere continuation because both corporations were owned and operated by the same person utilizing the same employees, in the same building, and serving substantially the same patients
- finding mere continuation when both corporations were owned and operated by the same individual, had the same employees, were located in the same building, and served the same customers

## Opinion text

Slaby, Presiding Judge,
dissenting.
{¶ 48} I would concur with the majority’s opinion as to assignments of error I, II, and IV. However, I respectfully dissent from the majority opinion as to assignment of error III. I would agree that the assets of the new corporation can be followed from the original corporation and those assets may be used to satisfy Dr. Pottschmidt’s judgment; however, I disagree with the analysis the majority used to pierce the corporate veil to impose personal liability on Dr. Klosterman. The majority opinion could be used to impose personal liability on the sole shareholder of every solely owned corporation. The majority places a significant emphasis on Dr. Klosterman’s personal use of an automobile paid for by the corporation. They seem to overlook the fact that these payments were treated as income to Dr. Klosterman for tax purposes, which is an indication of the separation of the corporation from the individual.
{¶ 49} The majority seems to also focus on the transfer of the assets of the new corporation to avoid liability as a prima facia case for piercing the corporate veil. There is no question that one of the purposes of the corporate structure is to avoid personal liability. The question here is whether the new corporation was established to avoid future liability or liability related to Dr. Pottschmidt’s lawsuit. Here, it is clear that the litigation was commenced just prior to the formation of the new corporation. Therefore, under the limited facts of this case, I concur with the majority’s opinion as to Assignments of Error I and II. Whatever the liability that existed against the original corporation should be
*840
followed to the new corporation and the new corporation cannot avoid the liability to Dr. Pottschmidt. However, Dr. Klosterman should not be held personally liable for either corporation’s liabilities.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/3696488. Public record. Not legal advice.