Domestic Relations – Alimony – Modification Motion – Changed Circumstances – Insufficient Showing – Corporate – LLC Income

King v. King (Lawyers Weekly No. 011-173-12, 10 pp.) (John C. Few, Ch.J.) Appealed from Spartanburg County Family Court (Letitia H. Verdin, J.) S.C. App.

Holding: After determining that a limited liability company’s income should be imputed to the plaintiff-husband, the family court was not required to reach inside the company to access its earnings; therefore, the defendant-wife was not required to pierce the LLC’s corporate veil.

We affirm the family court’s denial of the husband’s motion for a modification of alimony.

The husband set up and ran an LLC but made his new wife its CEO so customers wouldn’t know that he had authority to agree to lower prices. Under these circumstances, the family court correctly determined that the LLC’s income should be imputed to the husband.

The defendant-wife was not required to pierce the LLC’s corporate veil. By imputing the LLC’s income to the husband, the court did not determine that the husband was liable for the LLC’s debts. Rather, the court determined who would have ownership of the LLC’s profits after they are distributed from the LLC. Because the court determined as a factual matter that the husband owned the money when the LLC distributed it, the court did not need to disregard the corporate form.

Woodside v. Woodside, 290 S.C. 366, 350 S.E.2d 407 (Ct. App. 1986), is distinguishable. There was no evidence that the corporation at issue in Woodside was created to conceal the true owner of the business. Furthermore, the Woodside court may have had to reach inside the corporate form to access the corporation’s money.

The law simply does not support the husband’s position that the family court must pierce the corporate veil before it may impute the income of a company to one spouse for purposes of calculating alimony. There is no other published decision on alimony that mentions piercing the corporate veil, and Woodside cannot be read to require it. In Woodside, this court merely affirmed the family court’s decision not to allocate the corporation’s income to the husband. In doing so, we stated, “We have reviewed the record and are unable to find a sufficient basis for disregarding the corporate structure and constructively allocating its income to the husband.” We did not intend to require a family court to pierce the corporate veil in future cases.

Affirmed.