LLC Members are not Protected from all Liability

Originally posted on July 22, 2011 by Ryan

Sturm v. Harb Development, 298 Conn. 124, 2 A.3d 859 (2010).

Members of limited liability companies may be surprised to know that they can be sued individually when they personally direct or participate in tortious conduct. This is not the same as piercing the corporate veil, and does not require the plaintiff to allege facts to show that the corporate veil should be pierced.

In this case, a homeowner sued a contractor for breach of contract, negligence, fraud, and negligent misrepresentation in connection with the construction of a new home. The trial court held that the plaintiff failed to allege facts sufficient to pierce the corporate veil, so the contractor could not be held personally liable. On appeal, the plaintiff homeowner argued that piercing the veil was unnecessary because he was asserting liability against the defendant based on his individual actions, not trying to hold the contractor vicariously liable for the actions of the LLC. The court determined that a member of an LLC is not liable for the actions of the LLC merely because of his position within the company. However, when the member personally directs or participates in tortious conduct, he cannot hide behind the corporate shield.

This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.

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