Dusharm

MEMORANDUM **

In this bankruptcy matter, the Chapter 7 debtor, Elegant Custom Homes, Inc. (“ECH”), and its owners, the Robertsons, appeal the district court’s judgment affirming the bankruptcy court. The bankruptcy court, after a bench trial, entered judgment in favor of Elaine M. Dusharm (“Dusharm”) holding that “ECH was the alter ego of the Robertsons and that it would be an injustice not to require the Robertsons to pay Dusharm the money she loaned to ECH.” The bankruptcy court also awarded Dusharm her attorneys’ fees pursuant to Arizona Revised Statute § 12-341.01.

On appeal, the district court held that, under Arizona law, a corporation may not pierce its own corporate veil, and that there was injustice sufficient to sustain the bankruptcy court’s decision to permit Dusharm, a third-party creditor, to pierce the corporate veil. The district court also held that the bankruptcy court properly awarded attorneys’ fees. We affirm the district court.

Under the circumstances presented here, Arizona law authorizes piercing of the corporate veil, see Gatecliff v. Great Republic Life Ins. Co., 170 Ariz. 34 , 821 P.2d 725, 729 (1991) (“Plaintiffs must prove ... that observance of the…