This case came before the Supreme Court on April 9, 2003, on appeal by the plaintiff, National Hotel Associates (NHA or plaintiff), from a judgment of the Superior Court denying and dismissing its complaint. The plaintiff is seeking to hold the defendants, O. Ahlborg & Sons, Inc. (O. Ahlborg) and one of its principals, Richard Ahlborg (Richard), (collectively defendants), liable for a judgment confirming an arbitration award made in the plaintiff’s favor against Construction Services, Inc. (CSI), an O. Ahlborg affiliated corporate entity.

   In 1983, NHA sought to renovate the National Hotel (the project), a large Victorian-style hotel overlooking Old Harbor on Block Island. Richard, aware that he was one of several contractors competing for the job, proposed that NHA use nonunion labor through an O. Ahlborg nonunion entity, CSI, to reduce the overall cost of the project. At that time, Richard, CSI’s sole stockholder, assured NHA that he personally would rectify any problems that CSI experienced with the project. Barry Evans (Evans), one of NHA’s principals, testified that Richard described CSI as a ‘‘Siamese twin’’ of O. Ahlborg’s and that CSI operated out of the same offices and shared the same computer facilities, personnel, vehicles, and equipment. Evans further testified that Richard convinced him that NHA ‘‘should have no concern about the project being carried out by CSI’’ because both Richard and the entire O. Ahlborg organization ‘‘would back up CSI from start to middle to the end.’’ The record also indicates that Richard repeatedly boasted that ‘‘he was CSI’’ and he ‘‘was O. Ahlborg.’’ When asked why he would deploy O. Ahlborg’s resources to a project belonging to CSI—a different company—Richard responded, ‘‘Because I am both companies.’’ Evans testified that in the face of these promises and Richard’s many representations, NHA entered into a contract with CSI. According to Evans, ‘‘no distinction was drawn whatsoever by [Richard] * * * between the two companies.’’

   The renovation work on the National Hotel began in the fall of 1983, but by early December, CSI’s cash flow problems led to construction delays. Consequently, O. Ahlborg extended a $400,000 line of credit to the struggling corporation. Later, when CSI’s inability to perform further delayed construction, Richard and O. Ahlborg assumed control over the project; CSI’s construction manager was fired and was replaced by an O. Ahlborg project manager. The evidence submitted at trial demonstrated that despite its undercapitalization, CSI continued operations with the financial backing of O. Ahlborg. However, CSI never reimbursed O. Ahlborg for the $400,000 cash infusion. In total, approximately $360,000 of the $400,000 advanced by O. Ahlborg was directly attributable to the project. Richard openly admitted that without O. Ahlborg’s financial assistance, CSI would have been unable to proceed with the construction. Anthony D. Lee, a certified public accountant specializing in the construction industry, reviewed CSI’s financial operating history, work in progress and cash flow requirements and testified that CSI was undercapitalized during each year from 1982 through 1986 and was, at all relevant times since its inception in 1981, insolvent.

   In 1984, CSI commenced arbitration proceedings against NHA in an effort to collect approximately $500,000 on O. Ahlborg’s behalf. This claim centered on defendants’ contention that NHA owed money for work performed on the project. Richard later admitted that he and O. Ahlborg were the real parties in interest in this arbitration. The evidence disclosed that O. Ahlborg financed the entire arbitration proceeding, including costs for expert witnesses and attorneys’ fees.

   NHA counterclaimed and sought recovery for CSI’s nonconforming, defective and untimely performance of the work. On May 7, 1986, at the close of arbitration, the arbitration panel awarded NHA $230,687.20 in damages based upon construction delays and defective work and denied all claims asserted by CSI. On June 19, 1986, a judgment confirming the arbitration award was entered in the Superior Court, and on September 3, 1986, an execution was returned unsatisfied. NHA thereafter filed this action against O. Ahlborg and Richard, seeking to impose liability on both defendants for the full amount of the judgment. * * *

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   At trial, NHA attempted to persuade the trial justice that both Richard and O. Ahlborg should be held jointly and severally liable for the judgment because CSI was a sham entity and a mere instrumentality of O. Ahlborg. * * *

   After considering the arguments of counsel, the trial justice found that there was no basis for disregarding CSI’s corporate entity. * * * The trial justice entered judgment in favor of defendants, and NHA timely appealed.

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   * * * [T]he trial justice correctly observed that if two corporations are affiliated through common stock ownership, each will be considered a separate and independent entity ‘‘unless the totality of the circumstances surrounding their relationship indicates that one of the corporations ‘is so organized and controlled, and its affairs are so conducted, as to make it merely an instrumentality, agency, conduit, or adjunct of [the other].’’’ [Citation.] The criteria for piercing the corporate veil to impose liability on non-corporate defendants vary with the particular circumstances of each case. [Citation.] However, ‘‘when the facts of a particular case render it unjust and inequitable to consider the subject corporation a separate entity’’ we will not hesitate to disregard the corporate form and treat the defendant as an individual who is personally liable for the debts of the disregarded corporation. [Citation.] Thus, in circumstances in which there is such a unity of interest and ownership between the corporation and its owner or parent corporation such that their separate identities and personalities no longer exist we have held that ‘‘adherence to the principle of their separate existence would, under the circumstances, result in injustice.’’ [Citation.] In those situations the corporate form is disregarded and liability is determined by justice and fairness.

   In evaluating the degree of separateness between two corporations, we look to the totality of the circumstances and examine such factors as stock ownership, capitalization, dual office holding and directorships, financial support or dependence, a lack of substantial business contracts independent from the other corporation and a domination of finances, policies and practices. [Citation.] Having reviewed the evidence in the record in this case, this Court is of the opinion that a finding that CSI was operated as an instrumentality of O. Ahlborg is amply demonstrated and that liability for CSI’s judgment debt should rest with O. Ahlborg.

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   * * * The evidence disclosed that although defendants scrupulously adhered to the usual corporate formalities, thus endeavoring to preserve the corporate protections afforded by law, CSI wound up an empty shell, unable to pay this judgment because its assets were dissipated for the benefit of Richard and O. Ahlborg. Accordingly, we are of the opinion that CSI was dominated and controlled by Richard as an alter ego of O. Ahlborg, all to the detriment of NHA, its victim and judgment creditor.

   In her decision, the trial justice failed to consider the totality of the evidentiary circumstances that support a finding that O. Ahlborg is responsible for the corporate debt of CSI. The evidence that Richard Ahlborg dominated the affairs of each entity was overwhelming; not only did he declare, whenever it was expedient to do so, that he was CSI and he was O. Ahlborg, he unhesitatingly deployed the resources of one corporation in favor of the other whenever the circumstances warranted, including steering NHA to CSI, financing the undercapitalized CSI, completing its contract with NHA, and attempting to collect CSI’s indebtedness on O. Ahlborg’s behalf by financing a meritless arbitration followed by a clandestine war of hide the assets.

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   Additionally, the evidence that CSI was undercapitalized from its inception and was insolvent for this entire period, including when it was retained by NHA * * * demonstrates undercapitalization and is damning proof that CSI was operated as a shell corporation for defendants’ benefit. [Citation.]

   Thus, as Richard so often proclaimed, at least for financial operations, O. Ahlborg was CSI. Accordingly, the corporate form that otherwise would shield O. Ahlborg from liability is unavailing and O. Ahlborg is liable for CSI’s judgment debt.

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   For the reasons set forth herein, the plaintiff’s appeal is sustained and the judgment is vacated.