West Virginia Jury Instruction - 1.9.5.1 Corporation As Alter Ego Of Stockholder
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FAQ
Alter ego refers not to a cause of action, but generally to a liability doctrine where an owner of a company can be held responsible for certain debts of the company.
The Model Jury Instruction Committee is comprised of outstanding and experienced Virginia judges, practicing attorneys, and law professors who devote substantial time in the maintenance of this essential litigation resource.
Alter ego is a legal doctrine whereby the court finds that a corporation lacks a separate identity from an individual or corporate shareholder. The court applies this rule to ignore the corporate status of a group of stockholders, officers, and directors of a corporation with respect to their limited liability.
Before or after the closing arguments, the judge will explain the law that applies to the case. You must apply these instructions to the facts to arrive at your verdict. Keep in mind that you must follow the law as the judge states it to you, even if you disagree with it.
The Alter Ego Doctrine was designed to be an equitable remedy and to prevent injustice. The Alter Ego Doctrine examines specific facts and is implemented on a case-by-case basis. The Alter Ego Doctrine is a two-prong test, and both prongs must be met to successfully pierce an entity's veil.
The alter ego test encompasses a host of factors: Listed as follows: Commingling of funds and other assets, failure to segregate funds of the separate entities and the unauthorized diversion of corporate funds or assets to other than corporate uses.
Defendants claim that alter ego liability is a question of law that the Court must determine. Plaintiffs claim just the opposite; that alter ego liability is a matter of fact, to be resolved by the trier of fact: the jury.
In summary, the clear and convincing standard is higher than the preponderance of the evidence standard but lower than the beyond a reasonable doubt standard. It requires a high level of certainty in the evidence presented, but not to the same extent as in criminal cases.