LLC Motion to Dismiss
I filed a wrongful termination/whistleblower action against some members of an LLC. They have filed a motion to dismiss arguing they are protected by the LLC from personal liability for their acts. I’m looking for law to the contrary.
Answer: This is a sufficiently basic problem that it is hard to research because there is not much law as it hasn’t been raised much. What your adversary is doing is confusing the contract rule that one who enters into a contract on behalf of a corporation or other employer is not personally liable on the contract with the very different tort rule. The tort rule is dealt with in 27 AmJur2nd Employment Sec. 409:
In the absence of immunity,[FN1] an employee may generally be held personally liable to a third person for injuries tortiously caused by the employee, regardless of whether the employer may also be liable.[FN2] Although a master and servant may each and both be liable for a servant's tort committed in the course of employment,[FN3] an employee who tortiously causes injury to a third person may be held personally liable to that person regardless of whether he or she committed the tort while acting within the scope of employment, because the employee's liability is based on personal wrongdoing independent of the employment relationship.[FN4] This remains true unless the employee was exercising a privilege of the employer, or a privilege held by the employee for the protection of the employer's interests.[FN5] These rules are echoed in the Restatement Second, Torts.[FN6] The fact that an employee was acting under directions will, however, protect him from liability for the employer's negligence unless the employee knew or had reason to know that the acts were hazardous and liable to cause injury.[FN7]
A professional negligence claim may be made against an individual professional who did not personally contract with the aggrieved party but who is an employee of the professional services corporation that did contract with the aggrieved party, that is, the employee-–professional who actually renders the professional services can be personally liable for the negligent performance of the services.[FN8]
I recall having researched this once and was frustrated to not find many cases and (as I recall) no Oklahoma cases.
Posted on Thu, May 5, 2011
by Sharon Coleman filed under