Lebanon Valley Insurance Co. v. Flaxman, B.
Lebanon Valley Insurance Co. v. Flaxman, B. No. 352 EDA 2016
Pa. Super. Ct.Mar 29, 2017Background
- Lebanon Valley Insurance Co., as subrogee of the property owners, sued Brian Flaxman individually after a February 16, 2013 fire at leased premises destroyed insured property.
- Valley Forge Beef and Ale, Inc. leased the premises; Flaxman was its sole shareholder, president and general manager.
- Complaint alleged the fire was caused by combustibles placed near an uncovered water-heater pilot light that had been repeatedly re-lit; Flaxman allegedly removed the pilot light cover to re-ignite it and then did not replace the cover.
- Lebanon alleged Flaxman committed negligent acts and omissions (failed to service/cover the water heater, allowed storage of combustibles, failed to notify owners), and sought to hold him personally liable under the participation theory (misfeasance), not by piercing the corporate veil.
- Trial court sustained Flaxman’s preliminary objections (demurrer) and struck the complaint; Lebanon appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Lebanon pled individual liability under the participation theory | Lebanon: complaint alleges affirmative acts by Flaxman (removed cover, left it off, directed storage near open pilot light) amounting to misfeasance | Flaxman: allegations amount to nonfeasance (failures/omissions), not actionable personal participation | Court: Complaint, read as whole, alleges nonfeasance; misfeasance not plausibly pled, so demurrer properly sustained |
Key Cases Cited
- Wicks v. Milzoco Builders, Inc., 470 A.2d 86 (Pa. 1983) (explains participation theory: individual liability attaches for active participation in tortious conduct rather than merely owning the corporation)
- Brindley v. Woodland Village Rest., 652 A.2d 865 (Pa. Super. 1995) (distinguishes misfeasance from nonfeasance; personal liability requires affirmative wrongful act, not mere omission)
- Shay v. Flight Sea Helicopter Servs., Inc., 822 A.2d 1 (Pa. Super. 2003) (reiterates that participation theory requires misfeasance; nonfeasance alone is insufficient)