G.R. No. 118910 - Kilosbayan, Inc. vs. Morato

Respondents Edilberto Lequin, Christopher Salvador, Reynaldo L. Singsing, and Raffy B. Mascardo filed an illegal dismissal complaint against Dutch Movers, Inc. (DMI) and spouses Cesar and Yolanda Lee, alleging they were employed as drivers and helpers, and were terminated on December 28, 2004 when DMI ceased operations without formal notice.
A DOLE–NCR certification confirmed DMI did not file any notice of business closure. DMI defended that respondents were project employees and their contract simply ended.

On October 28, 2005, Labor Arbiter Aliman D. Mangandog dismissed the complaint for lack of cause of action.
On November 23, 2007, the NLRC reversed the Arbiter’s decision, ruled the respondents were illegally dismissed, ordered their reinstatement with backwages and 10% attorney’s fees. The decision became final and executory on December 30, 2007.
Respondents filed a Motion for Writ of Execution and a Reiterating Motion for Writ of Execution with Updated Computation of Full Backwages.

Respondents discovered DMI had ceased operations without closure notice and that spouses Lee managed and operated DMI; incorporators Edgar N. Smith and Millicent C. Smith only lent their names. They moved to implead the Lees and Smiths as solidarily liable.
On April 1, 2009, Labor Arbiter Lilia S. Savari held the Lees liable and, on July 31, 2009, issued a writ of execution ordering PHP 4,240,505.32 from DMI and the Lees.
Petitioners moved to quash (denied September 4, 2009). On October 29, 2009, the NLRC quashed the writ insofar as it held the Lees liable and denied reconsideration on January 29, 2010.
Respondents filed a petition for certiorari with the Court of Appeals (CA). On July 1, 2013, the CA reversed the NLRC, reinstated the writ, and held the Lees solidarily liable. Its November 13, 2013 resolution denied reconsideration.

Petitioners argued the immutability of the final NLRC decision precluded any alteration, that Valderrama v. NLRC and David v. CA were inapplicable, and that no bad faith justified piercing DMI’s corporate veil.
Respondents maintained petitioners were consistently impleaded, identified as owners and operators, and did not refute the Smiths’ declarations of petitioners’ control over DMI.

Whether spouses Cesar and Yolanda Lee are personally liable to pay the judgment awards despite the immutability of the final and executory NLRC decision.
Whether the corporate veil of DMI may be pierced to hold the Lees liable based on supervening events, control, bad faith, and fraud.