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MAY v. CLUB MED SALES

September 16, 1993

BONNIE M. MAY, Plaintiff,
v.
CLUB MED SALES, INC., Defendant.



The opinion of the court was delivered by: BY THE COURT; ROBERT F. KELLY

 R.F. KELLY

 SEPTEMBER 16, 1993

 Plaintiff, Bonnie M. May, commenced this action against Defendant, Club Med Sales, Inc. ("Club Med Sales"), on April 10, 1992 in order to recover for injuries she sustained on April 10, 1990 when she fell from a horse at the Club Med Sonora Bay Resort ("Sonora Bay Resort") located in Sonora Bay, Mexico. Before the Court is Defendant's Motion for Summary Judgment pursuant to Rule 56(c) of the Federal Rules of Civil Procedure ("Rule 56(c)"), which claims that Plaintiff has sued the wrong party. For the reasons that follow, Defendant's motion is granted.

 In the Spring of 1990, Plaintiff made a reservation to vacation at the Sonora Bay Resort. As part of her activities, Plaintiff went horse back riding. Plaintiff claims that while she was horse back riding, the saddle slipped because it was improperly adjusted, causing her to fall and sustain various injuries. Plaintiff sued Defendant, Club Med Sales, who she believed owned, operated, managed, marketed and controlled the Sonora Bay Resort. However, Defendant claims that it does not own, operate or have any control over the Sonora Bay Resort, but rather that it is merely the exclusive wholesaler and non-exclusive retailer of vacation packages to Club Med Resorts.

 Pursuant to Rule 56(c), summary judgment is proper "if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party has the initial burden of informing the court of the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986). The non-moving party must then go beyond the pleadings and present "specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P 56(e). If the court, in viewing all reasonable inferences in favor of the non-moving party, determines that there is no genuine issue of material fact, then summary judgment is proper. Celotex, 106 S. Ct. at 2552 (1986); Wisniewski v. Johns-Manville Corp., 812 F.2d 81, 83 (3d Cir. 1987).

 Defendant contends that it does not own or in any way control the Sonora Bay Resort, and as such it cannot be held liable for injuries that occur as a result of the negligence of the employees of the Sonora Bay Resort. Defendant further argues that for the same reasons, it cannot be held liable under the mere instrumentality or alter ego theory.

 In order to recover under the mere instrumentality theory, Plaintiff must prove:

 1. That one corporation controlled another corporation to such a degree that the controlled corporation is a mere instrumentality;

 2. That the controlling corporation is perpetrating a fraud or wrong through the controlled corporation (e.g., torts, violation of a statute, or stripping a subsidiary of its assets); and

 3. An unjust loss or injury to the claimant, such as insolvency of a controlled corporation.

 Stinson v. GAF Corp., 757 F. Supp. 644, 645 (W.D. Pa. 1990). To hold that one corporation is a mere instrumentality or alter ego of another corporation, Pennsylvania law requires that Plaintiff establish that the controlling corporation wholly ignored the separate status of the controlled corporation and so dominated the affairs of the controlled corporation that its separate existence was a mere sham. Culbreth v. Amosa, Ltd., 898 F.2d 13, 14 (3d Cir. 1990). Moreover, Plaintiff must make a "threshold showing that the controlled corporation acted robot - or puppet-like in mechanical response to the controller's tugs on its strings or pressure on its buttons." Id. at 15.

 In the matter at hand, Plaintiff has presented no evidence that Defendant asserted any control over the Sonora Bay Resort. Marshall Donat, general counsel for Defendant, testified in his deposition that Club Med Sales is the non-exclusive retailer and exclusive wholesaler of vacation packages to Club Med Resorts. Deposition of Marshall Donat at 15. ("Donat Dep."). Club Med Sales is owned by Club Med Finance, N.V., which is incorporated in the Netherlands, which in turn is owned by Club Med Holding, B.V., which is incorporated in the Netherlands Antilles. Donat Dep. at 8.

 Mr. Donat further testified that the Sonora Bay Resort is owned by Desarrollo Turistico Medeterranee de San Carlos, S.A., and operated by Operadora de Aldeas Vacationales, S.A., both of which are Mexican corporations. Id. at 21-22. According to Mr. Donat, Defendant Club Med Sales does not have any ownership interest in either the owner or operator of the Sonora Bay Resort. He testified that Club Med, Inc., *fn1" does have an ownership interest in both the owner and operator of the Sonora Bay Resort, ...


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