South Dade Dealership, LLC v. Line 5 LLC
Line 5 LLC obtained a default judgment against CarX Depot and then sought to collect from separately owned South Dade Toyota via proceedings supplementary, arguing alter ego or mere continuation liability. After a bench trial, the lower court pierced the corporate veil on both theories. The Fourth DCA reversed de novo: the corporate veil cannot be pierced between two separately owned LLCs absent an ownership relationship, and operational intermingling alone does not establish alter ego liability.
Key facts
- Line 5 LLC provided consumer financing for finance-and-insurance products sold by CarX Depot (a used-car dealer) under a participation agreement; after nearly all CarX contracts were cancelled and CarX closed operations, Line 5 obtained a default judgment against CarX for $692,469.65 but was largely unable to collect.
- Line 5 initiated proceedings supplementary to implead separately owned South Dade Toyota, arguing it was CarX's alter ego or mere continuation; the connection relied on was that Mario Benedetti and general manager Boris Lopez had indirect ownership ties to CarX through MB Holdings, and that the two dealerships shared some employees, accounting functions, and a warranty fund.
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Holdings
- Piercing the corporate veil requires proving by preponderance: (1) the shareholder dominated the corporation such that it had no independent existence; (2) the corporate form was used…
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Why it matters
Reinforces the high bar for piercing the corporate veil between non-affiliated entities and protects businesses that share personnel or facilities with other entities without overlapping ownership. Creditors seeking to… — full analysis with a trial
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