United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING PLAINTIFF'S MOTION FOR
SUMMARY JUDGMENT 
STEPHEN J. MURPHY, III United States District Judge
Lynnette Thomas brought suit to enforce a judgment she
received in a previous case, Thomas v. Athlete's
Foot, Case No. 10-cv-12558. Plaintiff was unable to
collect on her earlier judgment because Defendant Edwan
Khrawesh dissolved the corporation that was the defendant to
the original action. Now before the Court is Plaintiff's
Motion for Summary Judgment. The Court has reviewed the
briefs, and finds that a hearing is unnecessary. See
E.D. Mich. LR 7.1(f). For the reasons listed below, the Court
will grant Plaintiff's Motion for Summary Judgment.
action stems from a previous case, Thomas v.
Athlete's Foot, Case No. 10-cv-12558 (the
"Original Case"). In the Original Case, Plaintiff
sued her corporate employer, Detroit Sport Foot, for sexual
harassment, hostile work environment, and retaliation under
Title VII of the Civil Rights Act of 1964 and Michigan's
Elliott-Larsen Civil Rights Act. ECF 14-23, PgID 340. Detroit
Sport Foot initially participated in the litigation, but
stopped after Plaintiff's action survived a motion for
summary judgment. Id. The Court then entered default
judgment against Detroit Sport Foot and awarded Plaintiff
damages, fees, and costs in the amount of $105, 512.50.
Thomas v. Athlete's Foot, Case No. 10-cv-12558,
ECF 34. Plaintiff was unable to collect on the judgment,
however, because Detroit Sport Foot dissolved. Id.,
ECF 39; ECF 14-17.
then filed a motion to pierce Detroit Sport Foot's
corporate veil and proceed against its owner: Defendant Edwan
Khrawesh. ECF 14-3. Attorney Edward Ewald appeared "to
represent the legal interests of Edwan Khrawesh, " ECF
14-26, and filed a response to Plaintiff's motion,
Athlete's Foot, ECF 52. The Court carefully
considered both parties' briefs and concluded that
Plaintiff suffered an unjust injury from Defendant's
abuse of the corporate privilege. ECF 14-23, PgID 347. But
there was a technicality that prevented the Court from
granting Plaintiff's motion: Defendant was not named a
defendant to the Original Case. ECF 14-25. Consequently, the
Court denied Plaintiff's motion and retained exclusive
jurisdiction. Id. Plaintiff then brought suit to
enforce the judgment. ECF 1.
Court must grant summary judgment "if the movant shows
that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56(a). The moving party must identify specific
portions of the record "which it believes demonstrate
the absence of a genuine issue of material fact."
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Once the moving party has met its burden, the non-moving
party may not simply rest on the pleadings, but must present
"specific facts showing that there is a genuine issue
for trial." Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986) (quoting
is material if proof of that fact would establish or refute
an essential element of the cause of action or defense.
Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.
1984). A dispute over material facts is genuine "if the
evidence is such that a reasonable jury could return a
verdict for the nonmoving party." Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In
considering a motion for summary judgment, the Court must
view the facts and draw all reasonable inferences "in
the light most favorable to the nonmoving party." 60
Ivy St. Corp. v. Alexander, 822 F.2d 1432, 1435 (6th
Plaintiff may proceed with her cause of action.
Court may enter judgment only if there is a proper cause of
action before it. Plaintiff brings an "action to pierce
the corporate veil, " ECF 1, which is traditionally an
equitable remedy rather than an independent cause of action.
See Brennan v. Nat'l Action Fin. Servs., Inc.,
No. 12-cv-10551, 2012 WL 3888218, at *3 (E.D. Mich. Sept. 7,
2012) (citing In re RCS Engineered Prods. Co., 102
F.3d 223, 226 (6th Cir. 1996)). The Court raised this issue
at the Rule 16 Scheduling Conference, yet both parties
neglected to address it in their briefs. After careful
consideration of this nearly fatal flaw, the Court finds that
Plaintiff may proceed.
action is premised on diversity, so the Court must determine
if federal or state law governs the question of whether
Plaintiff's claim is a proper cause of action. See
Erie R. R. Co. v. Tompkins, 304 U.S. 64, 78 (1938).
Courts typically "look to local law to find the cause of
action." Ragan v. Merch. Transfer & Warehouse
Co., 337 U.S. 530, 533 (1949). The Court therefore finds
that state law governs.
Court next must determine which state's law to apply. The
Court is located in Detroit, so Michigan's choice of law
principles govern the analysis. Klaxon Co. v. Stentor
Elec. Mfg. Co., 313 U.S. 487, 496-97 (1941) (federal
courts apply choice of law principles of the state where the
federal court is located). "Michigan choice of law
principles provide that Michigan law applies absent a
rational reason-such as another State's interest-to apply
other law." Daimler-Chrysler Servs. N. Am., LLC v.
Summit Nat., Inc., 289 F.App'x 916, 921 (6th Cir.
2008) (citing Sutherland v. Kennington Truck Serv.,
Ltd., 454 Mich. 274, 285-87 (1997)). Additionally,
"Michigan choice of law provisions favor allowing
Michigan residents to bring suit in Michigan courts under
Michigan law." Gass v. Marriott Hotel Servs.,
Inc., 558 F.3d 419, 425 (6th Cir. 2009) (citing
Olmstead v. Anderson, 428 Mich. 1, 23-27 (1987)).
Here, Plaintiff is a resident of Michigan, Detroit Sport Foot
was incorporated in Michigan,  and the underlying events
occurred in Michigan. ECF 1, PgID 2. Michigan law must apply.
the Court finds that Michigan law permits Plaintiff to
proceed on a claim to pierce the corporate veil. Under
Michigan law, "piercing the corporate veil is merely a
remedy to be applied in certain limited circumstances, "
rather than an independent cause of action. Gallagher v.
Perhsa, 315 Mich.App. 647, 661 (2016). Michigan courts,
however, allow plaintiffs to proceed without a separate cause
of action when "there already exists a judgment based on
one or more causes of action." Id.
Specifically, "when a judgment already exists against a
corporate entity, an additional cause of action is not needed
to impose liability against a shareholder or officer if a
court finds the necessary facts to pierce the corporate
veil." Id. at 665. Here, Plaintiff already has
a judgment against Defendant's dissolved corporation,
Athlete's Foot, Case No. 10-12558, ECF 34, and