Is the Corp Prez a properly-named party

[mrw142]

What is the name of your state? MINNESOTA

I'm a small-time practitioner, couple years experience. One of my coprorate clients was served with a summons and complaint naming him, the corp prez as a party as well as the corp itself. It's incorporated as an L.L.C.

There were no specific allegations in the Complaint that would enable the veil to be pierced, at least as near as I can tell. So can they name the prez in the Complaint like that? They did claim that he said this-or-that that gave rise to the damages, and we didn't deny that the prez did have a meeting with the plaintiff corp's president and personally made certain representations, but to my knowledge, in Minnesota law--and most other jurisdictions--the officer himself will not be liable personally, and the corp must indemnify him.

I'm not a corporate expert, just a G.P. so to speak (if that weren't already obvious), but I'm wondering if I should amend my Answer to the complaint (in which I just generally asked for summary judgment without saying "Joe Blow is an improperly-named party to this suit", or is it a matter of evidence at trial or pre-trial conference, them having the burden of proving that Joe Blow did do something that could allow him to be personally named? I hope I haven't waived the right to deny his personal liability by giving my standard blanket " this case is not grounded in law or fact or whatever, therefore defendant requests summary judgment" line in my answer.

Please help an attorney with little experience!

 

[seniorjudge]

What is the name of your state? MINNESOTA

I'm a small-time practitioner, couple years experience. One of my coprorate clients was served with a summons and complaint naming him, the corp prez as a party as well as the corp itself. It's incorporated as an L.L.C.

There were no specific allegations in the Complaint that would enable the veil to be pierced, at least as near as I can tell. So can they name the prez in the Complaint like that? They did claim that he said this-or-that that gave rise to the damages, and we didn't deny that the prez did have a meeting with the plaintiff corp's president and personally made certain representations, but to my knowledge, in Minnesota law--and most other jurisdictions--the officer himself will not be liable personally, and the corp must indemnify him.

I'm not a corporate expert, just a G.P. so to speak (if that weren't already obvious), but I'm wondering if I should amend my Answer to the complaint (in which I just generally asked for summary judgment without saying "Joe Blow is an improperly-named party to this suit", or is it a matter of evidence at trial or pre-trial conference, them having the burden of proving that Joe Blow did do something that could allow him to be personally named? I hope I haven't waived the right to deny his personal liability by giving my standard blanket " this case is not grounded in law or fact or whatever, therefore defendant requests summary judgment" line in my answer.

Please help an attorney with little experience!

File everything you can think of and let the court sort it out. Just make sure it's grounded in some kind of law...which you really need to research yourself.

If you make an answer and don't contest a party's standing in the suit, then he's a party.

So, do your homework and contest everything.

Didn't you have that example in law school about Pot v Kettle (as in the pot calling the kettle black): You are representing Kettle and you deny that he is a Kettle; but if he is a Kettle he is not black; etc. etc.

 

[JETX]

So can they name the prez in the Complaint like that?

Yes, the plaintiff can name anyone that they want. You will need to have the individual complete an affidavit stating the facts that the correct defendant is a corporation, with information to establish that fact (LLC name, charter number, date, etc.). File the affidavit with a "Motion to Dismiss against Defendant", stating the caselaw and/or statute that an individual cannot be personally held liable for a claim against a corporation. If everything is as you state, the court should dismiss the complaint against the individual.

 

[badapple40]

Only because I handle a TON of litigation regarding corporations/personal liability of corporate officers:

While the corporate president cannot be held liable for the actions of the corporations, there is what is referred to as the "personal participation theory" of liability. If the president or officer directed or committed the torts himself, he is on the hook. Think about if he were driving the company car, in the course of employment, and negligently struck another vehicle. Both he and the corporation (respondeat superior) would be liable. They may even be able to bring a negligent supervision claim if it is appropriate.

I would look at the complaint and see what is going on to see if they are going after personal participation, or whether they just named him for the heck of it.

Now, thats torts. If you talk about contractual liability, then, so long as he did not purport to make agreements for himself, or personally guarantee the underlying contract, then he is not liable.

 

[mrw142]

Only because I handle a TON of litigation regarding corporations/personal liability of corporate officers:

While the corporate president cannot be held liable for the actions of the corporations, there is what is referred to as the "personal participation theory" of liability. If the president or officer directed or committed the torts himself, he is on the hook. Think about if he were driving the company car, in the course of employment, and negligently struck another vehicle. Both he and the corporation (respondeat superior) would be liable. They may even be able to bring a negligent supervision claim if it is appropriate.

I would look at the complaint and see what is going on to see if they are going after personal participation, or whether they just named him for the heck of it.

Now, thats torts. If you talk about contractual liability, then, so long as he did not purport to make agreements for himself, or personally guarantee the underlying contract, then he is not liable.

I suppose that's what they're saying, but I know of no case law in Minnesota to support it. But of course, I'm no expert on this. I'm just wondering if, under the circumstances, I can still get rid of this. Don't know why it didn't occur to me sooner. There's been no scheduling order from teh court yet or anything of the sort, case was filed 2 mo ago, I answered, contested everything with a blanket request for summary judgment because "the complaint fails to state a claim upon which relief can be granted", etc., and included this language:

"As a separate and alternative affirmative defense to Plaintiff’s Complaint, Defendants allege that the claims contained in the Complaint may be barred by any or all of the affirmative defenses contemplated by Rule 8 of the Minnesota Rules of Civil Procedure. The extent to which Plaintiff’s claims may be barred by one or more of said affirmative defenses, not specifically set out above, cannot be determined until defendant had an opportunity to complete discovery, and Defendants therefore incorporates all such affirmative defenses as fully set forth therein."

We have a scheduling conference coming up, just hoping that I'm not now barred from getting rid of corporate president as a named party defendant. I hope the general language will enable me to preserve the right to assert this defense and that a motion to dismiss against the prez and get SJ isn't now barred because of my ignorance, etc.

So do you all seem to be saying that I just need to make a motion for SJ and put the ball in their court to prove that veil can be pierced or the "personal participation theory" applies or whatever?

 

[seniorjudge]

...There's been no scheduling order from teh court yet or anything of the sort, case was filed 2 mo ago, I answered, contested everything with a blanket request for summary judgment because "the complaint fails to state a claim upon which relief can be granted", etc., ...

Maybe we're just talking about differences in terminology, but a summary judgment is usually something that is granted when everyone agrees upon every fact. Did you in fact ask for an sj or a dismissal of the action?


So do you all seem to be saying that I just need to make a motion for SJ and put the ball in their court to prove that veil can be pierced or the "personal participation theory" applies or whatever?

Yes; it's not too late (I don't suppose) to amend the pleadings, is it?