A corporation is a separate entity from its principals.  Unless there is a basis to pierce the corporate veil, its principals are shielded from any potential liability.  Yet, often plaintiffs seek to name them in litigation.  In Smith v. Pottery King, Inc., the plaintiff almost succeeded.

The plaintiff filed suit against Pottery King and its employee, Richard Cullen, for personal injuries resulting from a car accident.  At the time of the accident, Cullen  had been driving a vehicle owned by Pottery King. The plaintiff then decided to also sue Pottery King’s principal, Joseph King, Sr., alleging that ,as principal of the corporation, King was liable for Cullen’s actions under a theory of respondeat superior.  King’s motion to dismiss the complaint for failure to state a cause of action was denied by the lower court.

The Second Department reversed finding that Cullen was an employee of the corporation, Pottery King, not the individual Joseph King.  That Joseph King was a principal of the corporation did not make him a viable defendant.  At the time of the accident, Cullen was performing work pursuant to his employment status with the corporation only.  As such, King could not be held liable for any alleged negligence on Cullen’s part under the doctrine of respondeat superior.

Thanks to Sheree Fitzgerald for her contribution.

For more information, contact Denise Fontana Ricci at .