United States District Court, E.D. Virginia, Richmond Division
VIRGINIA ELECTRIC AND POWER COMPANY d/b/a DOMINION VIRGINIA POWER., Plaintiff,
MICHAEL PETERS, Defendant.
A. Gibney Jr. Judge
March 22, 2018, the Court entered an Opinion accompanying an
Order denying the defendant's motion to dismiss. (Dk. No.
27.) The Opinion contained a typographical error that read
"the law of the case doctrine does prevent Dominion from
claiming that Peters fraudulently siphoned money away from
Bransen for his own gain." The statement should read
"the law of the case doctrine does not prevent Dominion
from claiming that Peters fraudulently siphoned money away
from Bransen for his own gain." The Court reissues the
amended complaint below.
2014, Virginia Electric and Power Company
("Dominion") obtained a $24.5 million judgement in
this Court against Bransen Energy, Inc.
("Bransen"). Dominion has not been able to collect
on its judgment and now brings this action to pierce
Bransen's corporate veil and impose liability on Michael
Peters, Bransen's owner and sole shareholder. Dominion
also alleges that Peters breached his fiduciary duty to
Dominion as a creditor.
has moved to dismiss this action based on a lack of personal
jurisdiction, res judicata, statute of limitations
grounds, and other theories. The Court denies the motion.
First, the Court has jurisdiction over Peters as an alter ego
of Bransen. Res judicata does not bar the present
claims because the issues presented in the prior litigation
differ from those here. The statute of limitations also does
not bar any of Dominion's claims based on the face of the
complaint. Finally, none of Peters' novel theories
concerning marshalling assets or the law of the case doctrine
bar Dominion's suit.
2011, Dominion and Bransen signed a $27 million contract for
the sale of coal. Bransen breached that contract by
delivering piles of unusable product-essentially black mud-
hidden beneath a sheath of real coal. On February 15, 2012,
Peters admitted wrongdoing during an interview with Dominion
and recognized that he needed to replace the coal. Rather
than make good the breach, Peters looted more than $2.66
million from Bransen between 2012 and 2015. He did this even
though the company lacked any operating income after 2012. In
the same time frame, Peters added his wife as a signatory on
Bransen's account and transferred thousands of dollars to
her accounts even though she had no business connection to
Bransen. Peters' mother, who also had no connection to
Bransen, wrote two checks using Bransen's account between
April and May 2013. Peters also founded a number of companies
unrelated to Bransen, including Taylor Rose (June 2012),
Bransen Holdings (July 2012), Primitive Creations (now Coal
Stone) (September 2013), TR Nichols LLC (February 2014), and
RPM Solutions LLC (June 2015), and diverted significant
amounts of Bransen's money to each of them. To top off
the decimation of Bransen, Peters unconditionally pledged its
corporate assets to secure a $9 million note for Taylor Rose
in July 2014.
30, 2014, Dominion filed suit in this Court alleging that
Bransen, a North Carolina corporation, breached its coal
delivery contract. The Court ultimately awarded compensatory
damages of nearly $23 million and an additional $1.6 million
in attorney's fees. Not surprisingly, Dominion has not
collected this judgment because Bransen had no operating
income after 2012 and started winding down operations around
that time. Bransen now claims insolvency.
has moved to dismiss Dominion's complaint, claiming that
(1) this Court lacks personal jurisdiction over him, (2) due
process precludes suit against him, (3) res judicata
bars Dominion's claims, (4) the doctrine of marshalling
assets bars Dominion's claims, (5) the statute of
limitations bars the claims, (6) the law of the case doctrine
bars the claims, and (7) Dominion fails to make a showing for
punitive damages. For the reasons outlined below, the Court
rejects each ground and denies this motion.
Personal Jurisdiction 
court rules on personal jurisdiction without the aid of an
evidentiary hearing, the plaintiff must only make a prima
facie showing of jurisdiction, and the court must
"resolve all factual disputes in the plaintiffs
favor." Mylcm Laboratories, Inc. v. Akzo, N.V.,
2 F.3d 56, 60 (4th Cir. 1993). In corporate veil
piercing actions, due process permits personal jurisdiction
over individuals if (1) they are the alter ego of a
corporation and (2) that corporation would have been subject
to the court's personal jurisdiction. Newport News
Holding Corp. v. Virtual City Vision, Inc., 650 F.3d
423, 433 (4th Cir. 2011). Peters satisfies both requirements.
law dictates whether Peters acted as Bransen's alter ego
for the purpose of establishing jurisdiction. Int'l
Bancorp, LLC. v. Societe Des Baine De Mer Et Du Cercle Des
Estrangers A Monaco, 192 F.Supp.2d 467, 477 (E.D. Va.
2002); see Newport News Holding Corp., 650 F.3d at
433-34 (applying Virginia's corporate veil piercing
statute to establish personal jurisdiction over an Alabama
corporation). Under Virginia law, a court may pierce the
corporate veil "to find that an individual is the alter
ego of a corporation where it finds '(i) a unity of
interest and ownership between [the individual and the
corporation], and (ii) that [the individual] used the
corporation to evade a personal obligation, to perpetrate
fraud or a crime, to commit an injustice, or to gain an
unfair advantage.'" Newport News Holding
Corp., 650 F.3d at 434 (alterations in original)
(quoting C.F. Trust, Inc. v. First Flight Ltd.
P'ship, 306 F.3d 126, 132 (4th Cir.
2002)). Piercing the corporate veil is an
"extraordinary act" permitted only when
"necessary to promote justice." C.F. Trust,
Inc. v. First Flight L.P., 266 Va. 3, 10, 580 S.E.2d
806, 809 (Va. 2003). To pierce the veil, a court must make a
"fact-specific determination" that requires it to
"closely scrutinize" the factual circumstances
surrounding the allegations. Id. at 10, 810.
the facts support corporate veil piercing. The complaint
shows that Peters used his unity of ownership and interest to
gain an unfair advantage. First, Peters' role as
Bransen's president, owner, and sole shareholder
establishes a unity of ownership. Peters also showed a unity
of interest by siphoning more than $2.66 million away from
Bransen for his personal benefit. Peters knew on February 15,
2012, that he had breached the contract and needed to replace
the coal. Despite this admission, Peters and his family used
Bransen as a personal checking account: Peters' wife and
mother each wrote checks from Bransen's account without
any business connection to the company; Peters also created
new companies with no connection to Bransen and funded them
with Bransen's money; and Peters unconditionally pledged
Bransen's assets to secure a $9 million note for another
company. These facts establish a unity of ownership and
allegations make a prima facie showing that Peters used the
corporate structure to avoid liability to Dominion by making
corporate decisions that benefited him and not his
corporation. See A.G. Dillard, Inc. v. Stonehaus
Construction, LLC, 2016 WL 3213630, at *3 (Va. 2016).
Since the Court has jurisdiction over Bransen, it also ...