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Specialty Companies Grp. LLC v. Meritage Homes of Ariz. Inc. - 2/25/2020

Arizona Court of Appeals Division One holds that a claim to pierce the corporate veil may be raised in an action on a judgment and that such an action is governed by the limitation period for actions to enforce a judgment.

In 2011, a subcontractor obtained (via assignment) a judgment against a development company related to an unpaid debt from 2007.  In 2015, the subcontractor sued the developer’s parent company, alleging that it was liable for the judgment on an alter ego theory.  The superior court held that the suit was untimely and granted summary judgment for the parent company.  The subcontractor appealed.

The Court of Appeals held that the suit was timely.  It reasoned that “an alter-ego claim is not a separate cause of action, but a means of imposing liability on an underlying cause of action,” and it is governed by the “limitation period application to the cause of action to which the alter-ego claim is tied.”  The suit was appropriately pled as an action to enforce the judgment against the development company.  It was therefore governed by the limitation period for an action on a judgment, accrued upon issuance of the judgment, and was timely.

The Court of Appeals therefore reversed and remanded.

Judge McMurdie delivered the opinion of the court; Judges Cruz and Cattani joined.

Posted by: Josh Bendor

Posted On: 3/11/2020