Dog law meets LLC law…

Corporations and limited liability companies exist separately and distinctly from those who operate them. However, they may be liable for the acts of those who operate them—even when the connection seems somewhat remote. Consider the following…

When the dog bites…

In New Jersey, a dog owner is “strictly liable” for the injuries caused by the bite of her dog. That is, the dog owner’s degree of care is largely irrelevant. A dog bite victim will prevail against the dog owner simply if the bite occurred while the victim was in or on public property or lawfully in or on the dog owner’s property.

In a recent case, the plaintiff was bitten by a dog. There was little dispute that the dog owner was liable for the resulting injuries. However, the bite occurred in a store owned by a corporation that was solely owned by the dog owner. In addition, the store operated in a property owned by a limited liability company (LLC) in which the dog owner was the managing member (i.e., an owner who is in charge of operating the LLC). The plaintiff also sued the corporation and the LLC, claiming each was “vicariously liable” for the harm caused by the dog bite. In essence, an entity (e.g., an LLC or corporation) is liable for the acts of its agents—for example, those individuals who operate the entity—if the acts were done within the scope of the agent’s authority.

When the bee stings…

The trial court ruled that all three—the dog owner, the corporation that owned the store, and the LLC that owned the property in which the store was located—were liable for the dog bite injuries. On appeal, the defendant argued that the LLC cannot be vicariously liable for the dog bite. The appeals court disagreed. It held that, insofar as the dog owner was the managing member of the LLC, and as such had exclusive authority to decide all matters relating to the LLC, the LLC could be liable for the injuries. While not dispositive, the court observed that there was no written lease between the corporation (that operated the store) and the LLC (that owned the property) (in fact, the corporation did not pay any rent), nor was there any other evidence that the LLC did not assume the obligation to provide for the safety of visitors to the property.

Conclusion…

The case not only illustrates the need to assess the risks of keeping one’s pet dog on one’s business premises, but it also illustrates the prudence of formalizing occupancy arrangements with a written lease. Please feel free to contact me for more information about the case and its impact on your business.

PLEASE NOTE: This blog is merely for the general interest of the reader. It is not legal advice or opinion and it does not create an attorney-client. Please call me at 973-921-0600 if you’d like to have a free initial telephone consultation or learn more about me or my practice. Thank you.

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