Q: A corporation I owned, which is no longer currently active, is being sued for services provided that caused damages
A corporation I owned, which is no longer currently active, provided services on a construction project in which the owner has filed a lawsuit claiming property damages due to my services at the time. The insurance company covering my corporation during the time of the project, is claiming that it may not cover the property damages being claimed in the lawsuit. If the insurance company backs out & decides that the policy does not cover such damages in the lawsuit, what happens to me, the owner of the company that’s being sued?
A:
The answer depends on what the plaintiff's claims are. Are they only related to the job performed by you or the company? Only a careful analysis of the complaint will give you the full answer.
Officers can be individually liable for their torts irrespective of the corporation through which they may have committed them. Daum v. Adweiss, LLLP, __ So. 3d __ (Fla. 3d DCA 2018) ("'[I]ndividual officers and agents of a corporation are personally liable for torts committed within the scope of their employment,' and joint and several liability may apply to both the individual who perpetrated the tort and the company for whom he worked").
However, you can't be individually liable if the plaintiff's claims rest on a contract theory.
Depending on what your policy provides, there may be coverage for director and officer (or "errors and omissions"). Alternatively, if you have a homeowner's or renter's policy, that may provide coverage for your personal liability, although the carrier may deny coverage since the conduct was arguably done in the name of the business.
Also, the business can still be sued, even though it has closed up.
If you received what is called a "reservation of rights" letter from your insurance company, I would be pleased to discuss your case further. 202-713-5292.
Bruce Alexander Minnick agrees with this answer
A: Also, if the corporation which " is no longer currently active" was improperly "would up", or dissolved, you may be liable for contract claims as well.
Bruce Alexander Minnick agrees with this answer
A: If you caused the damages then it is quite probably that you will be responsible for the damages that you caused--why? because your dead corporation did NOT cause any damages.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
