Genomma Lab USA, Inc. v. Venus America Corporation

Background

Genomma sued Venus for allegedly breaching a 2013 advertising-services agreement. After a two-week jury trial in November 2019, the jury found for Genomma on all claims and awarded $16,683,086 in damages. The court later entered judgment against Venus for $26,012,816, including $9,329,730 in prejudgment interest. Genomma acquired three Venus properties in a February 2021 execution sale for credit bids totaling $4,320,000. The opinion states that $21,692,816 remained unsatisfied.

Genomma had also asserted a veil-piercing claim against Carlos Carruitero. Veil piercing is a legal doctrine that can make an individual responsible for a corporation’s obligations when the corporation was dominated and used improperly. The court held a bench trial on that claim on October 18 and 19, 2021, and issued findings of fact and conclusions of law under Federal Rule of Civil Procedure 52.

Findings of Fact

The court found that Carruitero had essentially complete control over Venus’s business decisions, finances, and dealings with Genomma. Venus’s only officers and shareholders were Carruitero’s wife, Alejandra Orrego, and her mother, Flor Alba Osorio. The court found that neither had meaningful knowledge of Venus’s business, while Orrego testified that Carruitero was the only person with authority over the company.

The court also found that Carruitero used Venus as a conduit for his personal business. Carruitero testified that his advertising arrangements with Genomma were negotiated on a personal basis rather than on behalf of Venus. The court found that he moved money among Venus and other entities without consideration, used money routed through Prestige Media to pay more than $200,000 of his personal tax debts, and engaged in undocumented transfers described as loans between himself and Venus.

The court found that Venus paid Prestige Media $12,599,382.68 for airtime that Univision had charged Prestige Media $6,342,714, leaving $6,256,668.68 that Prestige Media received without consideration. The court also described transfers involving aircraft and other companies owned by Carruitero, payments by Venus for expenses of Kapallaq, and transfers involving Agrocasa. The court found that this evidence showed Carruitero’s control of Venus and the misuse of corporate funds.

Legal Standard and Analysis

The court applied Florida law. Under the standard stated in the opinion, Genomma had to prove three elements: Carruitero dominated and controlled Venus so that Venus’s independent existence was effectively nonexistent; the corporate form was used fraudulently or for an improper purpose; and that use caused injury to Genomma.

The court concluded that Genomma proved all three elements. It found that Carruitero exercised unbridled control over Venus, treated Venus as a vehicle for his own business, commingled personal and corporate funds, and used Venus in connection with the overcharges to Genomma and other improper transactions. The court concluded that this conduct caused Genomma significant injury.

Disposition

The court found for Genomma on its veil-piercing claim. It held that Carlos Carruitero was jointly and severally liable for the jury verdict and judgment against Venus in the amount of $21,692,816. The court directed that final judgment be entered by separate order under Federal Rule of Civil Procedure 58.