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NOTICE: This opinion is subject to motions for rehearing under Rule 22 as well as formal revision before publication in the New Hampshire Reports. Readers are requested to notify the Reporter, Supreme Court of New Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any editorial errors in order that corrections may be made before the opinion goes to press. Errors may be reported by E-mail at the following address: reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 a.m. on the morning of their release. The direct address of the court's home page is: http://www.courts.state.nh.us/supreme. THE SUPREME COURT OF NEW HAMPSHIRE ___________________________ Manchester District Court No. 2010-563 HOLLOWAY AUTOMOTIVE GROUP d/b/a HOLLOWAY MOTOR CARS OF MANCHESTER v. GORAN LUCIC & a. Argued: September 15, 2011 Opinion Issued: December 14, 2011 Coughlin, Rainboth, Murphy & Lown, P.A., of Portsmouth (Bradley M. Lown on the brief and orally), for the plaintiff. Sherman Law, PLLC, of Portsmouth (John P. Sherman on the brief and orally), for the defendants. DALIANIS, C.J. The defendants, Sedo, Inc. (the corporation) and its founder, president and sole shareholder, Goran Lucic, appeal an order of the Manchester District Court (DeVries, J.) ruling that both the corporation and Lucic are liable to the plaintiff, Holloway Automotive Group d/b/a Holloway Motor Cars of Manchester (Holloway), for breach of contract. We affirm the trial court's enforcement of a liquidated damages provision in the parties'

contract, but conclude that the district court lacked equitable jurisdiction to pierce the corporate veil. Therefore, we vacate the award against Lucic as well as the award of attorney's fees, and remand. I. Background The trial court could have found the following facts. Holloway is an authorized dealer of Mercedes-Benz North America (Mercedes-Benz). Mercedes-Benz prohibits Holloway "from exporting new Mercedes-Benz vehicles outside the exclusive sales territory of North America" and "assess[es] charges against [Holloway] for each new Mercedes-Benz vehicle it sells or leases which is exported from North America within one (1) year." Thus, export of a vehicle that Holloway sells, even when Holloway neither knows of nor consents to the export, subjects Holloway to certain penalties and fees. Holloway requires customers to enter into a no-export agreement to minimize Holloway's exportpenalty exposure. In May 2008, Lucic, on behalf of the corporation, paid $99,000 for two Holloway vehicles and signed two identical agreements promising "not [to] export the [v]ehicles[s] outside North America . . . for a period of one (1) year." Each agreement also provided that if the vehicle was exported within a year, "regardless of whether the [corporation] or any other party actually cause[d] the export of the [v]ehicle," the corporation would pay Holloway $7,500 as liquidated damages. In the event of a breach, each agreement made the corporation liable for the reasonable attorney's fees Holloway incurred to enforce it. Lucic assured Holloway that he had no interest in exporting because he planned to lend the vehicles to contractors working for him on a Massachusetts consulting project. Satisfied with these assurances, Holloway delivered the vehicles. Less than two weeks later, both vehicles were exported. As a result, Holloway sued the corporation and Lucic, individually as its alter ego, seeking $7,500 liquidated damages plus attorney's fees for each vehicle. The defendants argued that the liquidated damages clause was unenforceable because the only penalty Mercedes-Benz actually assessed against Holloway was a $300 per vehicle administrative fee. This fee, the defendants contended, was grossly disproportionate to the $7,500 per-vehicle liquidated sum, making the damages provision an unenforceable penalty. Holloway presented evidence that its contractual relationship with Mercedes-Benz required it to pay a commission if a foreign dealer discovered the exported vehicles in its sales territory. Although, at the time of trial, no foreign dealer had sought to collect any commission, the dealers had the right

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to do so at any time. The defendants did not introduce evidence concerning the amount of Holloway's potential liability under the commission provision or the likelihood that Holloway would have to pay a foreign dealer. The district court found that the corporation had breached the no-export agreements and enforced the liquidated damages provisions; it also pierced the corporate veil to hold Lucic personally liable for the breaches. The defendants contend that the district court erred in finding that: (1) the liquidated damages provisions of the agreements are enforceable; (2) it had jurisdiction to pierce the corporate veil; and (3) an award of attorney's fees to Holloway was proper. II. Liquidated Damages Each liquidated damages clause at issue states: THE PARTIES AGREE THAT IT WOULD BE IMPRACTICAL OR DIFFICULT TO FIX THE ACTUAL DAMAGES TO [HOLLOWAY] IF THE VEHICLE IS EXPORTED OUT OF NORTH AMERICA. THEREFORE, IF THE VEHICLE IS EXPORTED OUTSIDE NORTH AMERICA WITHIN ONE[ ]YEAR OF THE DATE OF THIS AGREEMENT, THE UNDERSIGNED SHALL BE OBLIGATED TO PAY [HOLLOWAY] THE SUM OF SEVEN THOUSAND FIVE HUNDRED DOLLARS ($7,500.00) AS LIQUIDATED DAMAGES .... (Emphasis omitted.) The defendants argue that this provision is an unenforceable penalty because Holloway suffered only de minimis damages as a result of the breach. "The central objective behind the system of contract remedies is compensatory, not punitive." Restatement (Second) of Contracts

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