Fanning v. Brown

__ P.3d __ 1 Lula Fanning, as Guardian of Eva Jackson, a physically and mentally incapacitated adult (Fanning), filed a petition in district court against James Brown, Alex Dout, Grant Rhodes, Tony Wilkins, and Jeff Young (defendants) who are the shareholders of Sand Springs Care Center, Inc. (SSCC).1 Fanning's petition alleged SSCC owned and operated Oak Dale Manor, a specialized long-term nursing care facility in Sand Springs, Oklahoma. Fanning asserts nursing home negligence, statutory violations of the Oklahoma Nursing Home Care Act (NHCA), 63 O.S.2001, 1-1901 et seq.2 and the Protective Services for Vulnerable Adults Act, 43A O.S.2001, 10-101 et seq.,3 and breach of contract for injuries Eva Jackson received while a resident at Oak Dale Manor. 2 Defendants filed a motion to dismiss on May 21, 2002, in which they asserted that Fanning failed to state a claim upon which relief could be granted. Defendants' motion provided that ""[a]n individual and a corporation are two separate and distinct legal entities. An individual stockholder cannot be liable for the negligent acts of the corporation."" On June 5, 2002, Fanning filed an amended petition adding a fourth cause of action to pierce the corporate veil. On June 6, 2002, Fanning filed a response to the motion to dismiss. In her response, Fanning maintained the NHCA expressly authorizes a direct action against ""owners"" and that there must be a factual determination as to whether defendants satisfy the definition of ""owner"" under the act. Fanning further argued that the equitable doctrine of piercing the corporate veil should be invoked to protect the rights of third persons and accomplish justice.