W.P. Productions (“WPP”) contracted with Sam’s West, Inc., a corporation including “Sam’s Club” stores, to provide Wolfgang Puck-branded merchandise. As part of the deal, WPP agreed to pay Sam’s for featuring the Puck-branded products in Sam’s Instant Savings Booklets. WPP incurred a significant debt to Sam’s, and left over $2 million of it unpaid. In late 2017, Sam’s made a written demand for payment. Soon after that, WPP’s sole shareholder—Sydney Silverman—shut down WPP’s business while continuing to move money from WPP to himself and his other companies. Sam’s sued WPP and obtained a judgment against it in July 2020. A few months later, the Florida Secretary of State dissolved WPP.
Unable to collect from WPP, Sam’s initiated proceedings pursuant to Fla. Stat. §56.29, governing proceedings supplementary to execution of a judgment, and sought to pierce the corporate veil to hold Silverman responsible as a judgment debtor under collateral estoppel and alter ego theories. The district court granted Sam’s motion for summary judgment with respect to veil-piercing, and Silverman appealed.
The Eleventh Circuit affirmed, noting that “Florida’s guiding case on piercing the corporate veil does not explicitly address summary judgment” but determining that “we will not create a categorical ban on granting summary judgment when a case otherwise meets the Rule 56(a) criteria simply because it happens to involve piercing the corporate veil.” And Silverman did not dispute that he was WPP’s alter ego—he disputed only whether he had used the corporate form “fraudulently or for an improper purpose,” as required for veil-piercing under Florida law. In support of his argument, Silverman emphasized that he had not deliberately defrauded Sam’s. But that argument “narrows the inquiry more than Florida law requires,” the court concluded. Florida courts have held that using a corporation for an “improper purse” includes using it to “evade the requirements of a statute,” and Florida has a statutory Rule of Priorities, which prohibits corporations from making distributions to shareholders if doing so would make the corporation unable to pay its debts when due. “When a shareholder knows a company has dissolved and continues to move corporate money around,” the court held, “the shareholder, by default, is using the corporate form for the improper purpose of violating Florida’s Rule of Priorities.” That fact was not disputed by Silverman, so summary judgment in Sam’s favor was appropriate.