Chicago, IL asked in Personal Injury, Car Accidents, Civil Litigation and Small Claims for Wisconsin

Q: Is a LLC liable for injuries caused by it's uninsured vehicle driven by the owner of the LLC in Wisconsin?

I was on the sidewalk when I was struck by a car backing out of the driveway

1 Lawyer Answer

Emmanuel Muwonge

Answered
  • Personal Injury Lawyer
  • Wauwatosa, WI
  • Licensed in Wisconsin

A: I believe that the LLC may be or may not be liable for injuries caused by its uninsured vehicle driven by the owner of the LLC in Wisconsin. First, whether the vehicle is insured has nothing to do with the liability question. Rather, liability for the accident and accompanying injuries is a function of the conduct of the actors involved, in this case, the owner or shareholder. Your question is phrased in such a way that it may or may not mean that there is only one owner. I assume that there are no other owners and that this is a one member LLC.

The driver is the only owner of the LLC. If you assume that the driver is acting for and on behalf of the LLC when they drive the vehicle owned by the LLC., then the conclusion legally is that the driver is working for the corporation when the accident and injuries occur. When that happens under those facts, the LLC becomes liable for the injuries.

There is a corporate veil which the court will disregard when a limited liability corporation becomes involved in such matters and the owners attempt to prevent creditors from getting at the corporate assets and cash. Courts will disregard the corporate veil which then will be pierced. That veil or wall of protection usually covers or protects the corporation. This, however, is done when and where the corporation does not exist independently. The owner and the corporations are one and the same thing. When the owner treats the business assets or property as their own personal property and does away with or disregards the protocol usually businesses employ , conduct of the owner is considered to be conducted for and on behalf of the LLC.

Absent more facts, I am unable to provide additional commentary regarding your question. I believe that based on the very limited facts and circumstances, the LLC can be liable for the accident and injuries caused. When and if the LLC attempts to argue otherwise, the injured party may proceed against the LLC by conducting an investigation into how the LLC is operated, whether the formalities are observed. That said, it does not follow that because the formalities were not observed therefore the court will not pierce the veil of the LLC.

Because your question appears to show that you are interested in the liability of the LLC and not the liability of the member-owner, I am not sure whether commenting about the owner himself or herself is useful for the purposes for which you asked the question. Briefly though, the driver who is the owner of the LLC is responsible for their conduct and is not permitted to hide behind the LLC for the accident he caused. The driver here may become liable by virtue of the individual action or individual conduct as opposed to as a shareholder or LLC Member. Even when working or during the scope of one's employment, someone may be personally liable for his own negligence.

While the question appears at first glance to be a quick couple of sentence answer, I have ended up providing a response I never anticipated I would. It is my hope that I have shed some light on the question regarding the liability of the LLC which appears to be your focus by discussing the liability of the individual LLC Member driver or lack thereof.

To the extent I have muddled the waters, I am sorry and regret it.

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