## Facts

- My Fun Life Corp. (MFL) was a multi-level marketing company selling memberships for discount travel accommodations.
- Dan Edwards was MFL’s sole shareholder and director; Carrie Edwards (his wife) was a former COO and later executive vice president.
- MFL recruited Thomas Lunneborg, an experienced sales and product-development executive, to run day-to-day operations and develop new nutritional products.
- Lunneborg was hired as COO in April 2014 under an employment contract providing $60,000 severance if he was terminated without cause.
- In July 2014, MFL terminated Lunneborg, asserting he was fired for cause.
- Lunneborg sued for breach of contract seeking the severance and sought to pierce MFL’s corporate veil to collect from Dan and Carrie personally.
- Evidence showed MFL did not follow basic corporate formalities, commingled corporate and personal assets, and paid Dan and Carrie monies used for personal expenses.

## Issues

1. Whether substantial evidence supported the trial court’s finding that Lunneborg was terminated without cause, triggering the contract’s severance obligation.
2. Whether the corporate veil was properly pierced to impose personal liability on Dan Edwards and Carrie Edwards, including Carrie as a nonshareholder corporate officer.
3. Whether the trial court abused its discretion in the amount of attorney fees awarded.

## Decision

- The Idaho Supreme Court affirmed the judgment for Lunneborg.
- The Court upheld the finding that MFL lacked contractual cause to terminate Lunneborg and therefore owed the $60,000 severance.
- The Court affirmed trebling of damages under the Idaho Wage Claims Act and the award of attorney fees.
- The Court affirmed piercing MFL’s corporate veil and imposing personal liability on both Dan and Carrie.
- The Court awarded Lunneborg attorney fees and costs on appeal.

## Legal Principles

- Appellate review of a bench-trial contract dispute defers to the trial court’s credibility determinations and factual findings when supported by substantial and competent evidence; the appellate court does not reweigh evidence.
- Under Idaho law, veil piercing requires (1) unity of interest and ownership such that separateness has ceased, and (2) that respecting the corporate form would sanction fraud or promote injustice.
- Unity of interest may be shown by failure to observe corporate formalities, commingling of assets, and diverting corporate funds for personal use.
- Inequity can be established where the corporation is thinly capitalized or effectively assetless such that a creditor’s judgment would likely be uncollectible if limited to the entity.
- Veil piercing is not limited to formal shareholders; personal liability may extend to nonshareholder insiders who exercise substantial control over corporate finances and benefit from disregard of the corporate form.
- Attorney-fee awards are reviewed for abuse of discretion and are upheld when the trial court applies the correct legal standards and explains its reasoning.

## Conclusion

The Idaho Supreme Court affirmed a severance-based breach-of-contract judgment (including treble damages and attorney fees) and held that disregard of corporate formalities and insider control justified piercing the corporate veil to reach both the sole shareholder and a nonshareholder officer where limiting recovery to an assetless corporation would be inequitable.


Lunneborg v. My Fun Life Corp., 163 Idaho 856, 421 P.3d 187 (Idaho 2018)