On a summary judgment motion arising from a failed contract for a prefabricated modular home, the moving parties sought recovery of deposits and personal liability against the corporate principals.
The court granted judgment against the contracting corporation for breach of contract and held the individual principals personally liable for two deposit payments induced by false representations that framing and roof truss work had commenced or was about to commence.
Applying the civil fraud test and principles governing piercing the corporate veil, the court found the representations were knowingly false or made with reckless disregard for the truth and that the moving parties relied on them in making the payments.
Punitive damages were refused, but storage costs and partial indemnity costs were awarded.