Dygert v. Collier

Dygert v. Collier

IN THE UTAH COURT OF APPEALS

----ooOoo----

Daniel K. Dygert and Stephanie C. Dygert,

Plaintiffs and Appellants,

v.

Alan M. Collier and Mike Youngberg,

Defendants and Appellees.

MEMORANDUM DECISION
(Not For Official Publication)
 

Case No. 20020878-CA
 

F I L E D
(February 12, 2004)
 

2004 UT App 25

 

-----

Second District, Farmington Department

The Honorable Glen R. Dawson

Attorneys: Bradley H. Bearnson and Marty E. Moore, Logan, for Appellants

Robert W. Hughes, Salt Lake City, for Appellees

-----

Before Judges Billings, Bench, and Greenwood.

BENCH, Associate Presiding Judge:

Appellants Mr. and Ms. Dygert argue that Appellees Collier and Youngberg, as members of Clearwater Oaks (LLC), are personally liable for the acts of the LLC. Appellees deny liability based on the Utah Revised Limited Liability Company Act (the Act). See Utah Code Ann. § 48-2c-101 et seq. (2002).

"A company formed under the Act is a legal entity distinct from its members." Id. at § 48-2c-104. Furthermore, "a member or manager of a company is not a proper party to proceedings by or against a company, except when the object is to enforce a member's . . . liability to the company." Id. at § 48-2c-116. Likewise, "no organizer, member, manager, or employee of a company is personally liable . . . for a debt, obligation, or liability of the company or for the acts or omissions of the company or of any other organizer, member, manager, or employee of the company." Id. at § 48-2c-601. In applying these provisions of the Act, we emphasize that "'the general rule is that a corporation is an entity separate and distinct from its officers, shareholders and directors and that they will not be held personally liable for the corporation's debts and obligations.'" Reedeker v. Salisbury, 952 P.2d 577, 582 (Utah Ct. App. 1998) (citation omitted). Similarly, "'a director is not personally liable for his corporation's contractual breaches unless he assumed personal liability, acted in bad faith or committed a tort in connection with the performance of the contract'. . . even where 'the director, while acting in his official capacity, took actions that resulted in the breach.'" Id. (alteration in original) (citation omitted).

Appellees were undisputably members of an LLC who acted on behalf of the LLC in the transactions with Appellants. Appellants purchased the property from the LLC, and not from Appellees personally. All documents were signed by Appellees in their capacity as members of the LLC. Appellants do not contend that Appellees acted in any of the negotiations other than on behalf of the LLC. Absent any allegation claiming that Appellees did something separate or distinct from the acts of the LLC, Appellees may not be held liable for the acts done solely on behalf of the LLC. Appellants have not attempted to pierce the corporate veil, and there is no factual basis for any individual tort liability.(1)

We therefore affirm.

______________________________

Russell W. Bench,

Associate Presiding Judge

-----

WE CONCUR:

______________________________

Judith M. Billings,

Presiding Judge

______________________________

Pamela T. Greenwood, Judge

1. Appellants assert that Appellees owed them a legal duty, and that Appellants justifiably relied on Appellees' representations during the transaction. However, as explained herein, Appellants are not personally liable for the acts of the LLC.