A court will disregard the corporate entity where fraud or illegal or inequitable conduct is the result of the use of the corporate structures. While this is a fact question which should ordinarily be submitted to the jury, it need not be submitted if the evidence discloses no real question of fact.
Plaintiff spouses appealed from a decision of the United States District Court for the Western District of Oklahoma, which granted summary judgment in favor of defendant parent corporation and granted a motion to dismiss in favor of defendant subsidiary in the spouses' personal injury and loss of services action. The husband was injured when a crane cable snapped on board a drilling rig in Singapore.
Was Bethlehem Singapore the alter ego of Bethlehem Steel, thus making Bethlehem Steel liable for the acts of Bethlehem Singapore?
The court partially affirmed the decision of the trial court, partially reversed the decision of the trial court, and remanded. The court held that summary judgment was improperly granted in favor of the parent corporation. According to the court, the subsidiary was not the alter ego of the parent corporation. Therefore, the court refused to disregard the corporate entity. However, the court found that the parent corporation was possibly liable under the doctrine of respondeat superior. Because underlying questions of fact remained, the court determined that summary judgment was inappropriate. The court held that the spouses' action against the subsidiary was properly dismissed because in personam jurisdiction was lacking. According to the court, the alleged tortious injury did not in any legal sense arise out of the contract negotiations carried on in Oklahoma.