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A corporation I am an officer of is being sued. Can they come after me and my personal assets.

La Mirada, CA |

I am named as the person sued under the fictitious name of ____ in a civil lawsuit against a corporation for breach of contract on a second story parking garage waterproofing job . The job was completed to spec. and passed city final inspection. After the first rain 6 months later the driveway was more slippery than the owners expected and I have served with breach of contract civil lawsuit. I am a 10% share of the corporation an one of two licensed contractors.

Attorney Answers 5

  1. If you are named in your individual capacity, then yes, they can come after your personal assets.

    Consult with a business litigation attorney who can review the lawsuit for you and give you your options.

  2. Usually officers and directors of corporations are provided with a limited immunity shield from personal liability by statute. I do not practice in CA so you will have to consult a CA attorney to determine the scope of that shield under CA law. There are also exceptions, however, under which someone can proceed against you individually. Contact a business litigator ASAP to discuss what your personal exposure under this litigation may be.

    Legal disclaimer: I am licensed to practice law in the state of Washington and the answer provided above is for general information purposes only and should not be relied on as specific legal advice. This answer does not form an attorney-client relationship. You should consult with an attorney of your choice to fully advise you about your legal rights and obligations.

  3. If you are personally sued as opposed to being sued as a corporate, you are at risk. Definitely get help from a Business Litigation attorney. Take copies of the City Final Inspection with you to the meeting. Good Luck!

  4. If the contract is with the corporationa and you are an officer and employee of the corporation, and you held all necessary licenses, then you should be protected from personal liability based on the limited facts you post above.

    See an attorney as soon as possible to avoid filing an answer at the last moment.

    The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also terms and conditions item 9, incorporated as if it was reprinted here.

  5. I would recommend that you first have your corporate records books and files reviewed for compliance and to ensure the corporate veil cannot be pierced. Second you should seek the advise of a litigation attorney who is also familiar with corporate statutes and inquire about the probability and likelihood of filing a demurrer to the complaint to get you personally out of the lawsuit. In order to enforce a judgment against your personal assets, the Plaintiff must first have a judgment against you. You should review your corporate documents for the indemnification provisions within your Articles as well as your Organizational Minutes and seek indemnification from the corporation. There are other ways besides a demurrer to get you out of the suit. Deadlines are running if you have been served with a complaint and if you do not answer, a default judgment may be entered against you. If you need time to answer, call the Plaintiff's attorney and seek an extension of time to respond of 30 days and confirm such in writing. Don't try to tread the waters of litigation on your own and seek advise of counsel quickly.

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