Focus Profile, LLC v. Empyrean Diagnostics, Ltd., Empyrean Diagnostics, Inc., Daniel S. Bland, Garnell Bland, Pinnacle Diagnostics, Inc., Empyrean Diagnostics USA, Inc., Renaissance Financial Securities Corporation
Published: Jan. 15, 2000 | Result Date: Sep. 7, 1999 | Filing Date: Jan. 1, 1900 |Case number: CV764455 Bench Decision – $0
Judge
Court
Santa Clara Superior
Attorneys
Plaintiff
Defendant
Facts
Plaintiff, Focus Profile purchased about $700,000 in stock in Pinnacle Diagnostics Inc. (PDI), a company formed to license and market certain FDA approved products in the United States. There were two other corporations of PDI that had the same president, Daniel Bland. The entities wanted to build a distribution network for the joint marketing of their products and discussed a merger of operations. PDI began having financial difficulties and difficulty in raising the necessary capital. PDI offered all of its investors, including plaintiff Focus Profile, rescission of their investment. Focus Profile asked for only a partial refund of their initial investment which was paid by PDI. Later PDI's business failed and Focus Profile lost its remaining investment. Focus Profile filed a lawsuit against PDI and the other similarly-named companies, claiming Daniel Bland defrauded Focus Profile in the solicitation of its investment in PDI. Focus Profile did not allege that the other two entitites perpetrated fraud on them, but did claim the entitities were the alter egos of Daniel Bland and PDI.
Settlement Discussions
The plaintiff demanded $800,000, the proximate amount required to satisfy a judgment taken against the plaintiff in a related action. Defendants rejected the demand and made no counter offer.
Result
Empyrean Diagnostics, Ltd. and Empyrean Diagnostics, Inc., filed a motion for summary judgment on the grounds that no triable issue of fact existed on the issue of alter-ego liability. The court granted the motion for summary judgment after finding that no proof of financial connection between moving parties and Pinnacle; no abuse of moving parties' corporate form and that Focus Profile was aware of the separate corporate entitities and their separate lines of business. The court found that, at most, Focus Profile's evidence showed that defendant Daniel Bland was the person controlling all three corporate entities and that the three entities were engaged in related pursuits, albeit in different markets.
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