I’m engaged in the beginnings of litigation and I’m looking at the law around the liability of an LLC member for a contract made by the LLC.
Connecticut General Statutes Section 34-133 states: “Except as provided in subsection (b) of this section a person who is a member or manager of a limited liability company is not liable, solely by reason of being a member or manager, under a judgment, decree or order of a court, or in any other manner, for a debt, obligation or liability of the limited liability company, whether arising in contract, tort or otherwise or for the acts or omissions of any other member, manager, agent, or employee of the limited liability company.” General Statutes §34-133. Moreover, a member, individually, is not a proper party to suit on a breach of contract claim unless “the object of the proceeding is to enforce a member’s or manager’s right against or liability to the limited liability company.” General Statutes §34-134.
Gelinas v. Fuss, No. CV 03 0070629 (Conn. Super. 3/18/2004).
“Where, however, an agent or officer commits or participates in the commission of a tort, whether or not he acts on behalf of his principal or corporation, he is liable to third persons injured thereby.” Scribner v. O’Brien, Inc., 363 A.2d 160, 169 Conn. 389 (Conn. 1975).
The trick for a plaintiff to pull off, when trying to sue an LLC member individually on a contract allegedly breached by the LLC, is to find some way in which the LLC member committed or participated in a tort.
Sometimes, plaintiffs try to allege that failure to pay money under a contract is akin to the common law tort of “conversion” – which includes the unlawful keeping of a person’s property in derogation of the person’s rights. However, the Connecticut Supreme Court shut down this theory (not for the first time) as recently as Deming v. Nationwide Mut. Ins. Co., 905 A.2d 623, 279 Conn. 745 (Conn. 2006) (“A mere obligation to pay money may not be enforced by a conversion action … and an action in tort is inappropriate where the basis of the suit is a contract, either express or implied.”).
