Baatz v. Arrow Bar
Supreme Court of South Dakota
452 N.W.2d 138 (1990)
Edmond and LaVella Neuroth formed Arrow Bar, Inc. and personally guaranteed the corporation's debts used to buy the bar. Peggy and Kenny Baatz (plaintiffs) were injured when their motorcycle was struck by an uninsured, intoxicated driver who they alleged had been negligently over-served alcohol at Arrow Bar. Baatz sued Arrow Bar and the Neuroths individually (defendants), seeking to hold the Neuroths personally liable. The trial court granted summary judgment dismissing the Neuroths as individual defendants, and Baatz appealed.
Whether a court may pierce the corporate veil and hold shareholders individually liable when there is no evidence that recognizing the corporation as a separate entity would produce injustice or inequitable consequences.