THORNE, Judge:
Appellants Jose S. Salazar and Mildred O. Salazar appeal from the trial court's grant of Robert L. Christensen's motion to dismiss, and the trial court's decision to grant the motion with prejudice. We affirm in part and reverse in part.
When examining whether dismissal under rule 12(b)(6) of the Utah Rules of Civil Procedure is appropriate, we assume that all of the facts alleged in a plaintiff's complaint are true and "draw all reasonable inferences in the light most favorable to the plaintiff." Whipple v. American Fork Irrigation Co., 910 P.2d 1218, 1219 (Utah 1996). We also note that rule 12(b)(6) is crafted to permit a litigant to "challenge the formal sufficiency of the claim for relief, not to establish the facts or resolve the merits of the case," and absent a demonstration that the "allegations of the complaint clearly demonstrate that the plaintiff does not have a claim," dismissal should not be granted. Id. 1220 (citation omitted).
In the present matter, dismissal was proper only if the Salazars' complaint failed to allege sufficient facts to permit the court to disregard the corporate form. For the court to disregard the corporate form, as requested by the Salazars, their complaint must plead
a concurrence of two circumstances: (1) there must be such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist, viz., the corporation is, in fact, the alter ego of one or a few individuals; and (2) the observance of the corporate form would sanction a fraud, promote injustice, or an inequitable result would follow.
Norman v. Murray First Thrift Loan Co.,
596 P.2d 1028, 1030 (Utah 1979) (footnote omitted);
see also Werner-Jacobsen v. Bednarik,
946 P.2d 744, 748 (Utah Ct.App. 1997) (holding the alter ego doctrine inapplicable to relationships between individuals);
Shafir v. Harrigan,
879 P.2d 1384, 1389 (Utah Ct.App. 1994) (concluding that absent sufficient evidence to support an alter ego claim, stockholders, and by analogy corporate officers, are insulated from liabilities created by the corporation);
cf.
United States v. Van Diviner,
822 F.2d 960, 965 (10th Cir. 1987) (outlining several factors that should be examined in determining whether a corporate veil can be pierced).
After carefully reviewing the Salazars' complaint, we conclude that the Salazars failed to plead the existence of "such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist." Id. Accordingly, absent pleading sufficient facts to support their attempt to pierce the corporate veil, the allegations of the complaint clearly do not demonstrate that the Salazars have a claim. See Whipple, 910 P.2d at 1220. Therefore, the trial court properly dismissed the complaint.
While we also have concerns regarding the adequacy of the Salazars' attempt to plead facts sufficient to demonstrate that "observance of the corporate form would sanction a fraud," Norman v. Murray First Thrift Loan Co., 596 P.2d 1028, 1030 (Utah 1979), we conclude that the Salazars' failure to properly plead a "unity of interests," Id., between Christensen and Thrifty Nickel is sufficient to support the trial court's decision, and, therefore, we do not address the sufficiency of the Salazars' fraud pleadings.
However, "[d]ismissal with prejudice . . . is a harsh and permanent remedy when it precludes a presentation of a plaintiff's claims on their merits. Our rules of procedure are intended to encourage the adjudication of disputes on their merits." Bonneville Tower v. Thompson Michie Ass'n, 728 P.2d 1017, 1020 (Utah 1986). A motion predicated on rule 12(b)(6) is not intended to be a request for a judgment on the merits, seeWhipple, 910 P.2d at 1220 (stating "a rule 12(b)(6) motion is a challenge to the formal sufficiency of the claim for relief, not to establish the facts or resolve the merits of the case"), and, absent a consideration of the merits, "there [is] no reason for the court to dismiss with prejudice and prevent future consideration of the claims should the defect be corrected." Bonneville Tower, 728 P.2d at 1020; see also Intermountain Physical Med. Assocs. v. Micro-Dex Corp., 739 P.2d 1131, 1133 (Utah Ct.App. 1987) (reversing the trial court's dismissal with prejudice for failure to articulate sufficient grounds "to apply the `harsh and permanent remedy'" (citation omitted)); Land v. Midwest Office Tech., 979 F. Supp. 1344, 1349 (D.Kan. 1997) (concluding that dismissal with prejudice following a rule 12(b)(6) motion was inappropriate because the court could not state with a certainty that the plaintiff would be unable to cure the defects in the pleading and properly plead facts supporting alter ego liability).
The Salazars also argue on appeal that the trial court erred in denying them leave to amend. Our reading of the record finds nothing to support this argument, and we cannot fault the trial court for failing to address issues not properly presented to it. We therefore do not address the Salazars' amendment argument.
Accordingly, we affirm the trial court's dismissal of the Salazars' complaint, but we reverse the trial court's decision to do so with prejudice.
I CONCUR: Judith M. Billings, Associate Presiding Judge.