Ogea v. Merritt
130 So. 3d 888
La.2013Background
- In 2007, Ogea contracted Merritt Construction, LLC (sole member Travis Merritt) to build a home on her land; the contract implied slab-on-grade foundation.
- Merritt personally operated heavy equipment to prepare the dirt pad; a subcontractor poured the slab foundation.
- Engineer Norman found significant slab defects (flatness, cracks, thick chain wall, unlevel kitchen area).
- Ogea demanded refund (~$94,000) and demolition; LLC did not respond and halted work.
- Ogea sued LLC and Merritt individually in 2008; district court awarded damages against both, finding Merritt personally liable for supervision and fraud concerns.
- Court of Appeal reduced general damages but affirmed Merritt’s personal liability; they relied on La. Rev. Stat. 12:1320 and theories of piercing the LLC veil.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a LLC member can be personally liable for contract defects. | Ogea argues Merritt is personally liable under 12:1320(D) for fraud, breach of professional duty, or negligent act. | Merritt/LLC contend 12:1320(B) provides limited liability; exceptions in D are narrow. | No personal liability; 12:1320(D) exemptions not shown. |
| What is the scope of fraud exception under 12:1320(D)? | Fraud occurred by Merritt’s conduct (insurance timing) to gain advantage. | No evidence of fraud; insurance timing not evidence of fraud. | Fraud exception not satisfied; no personal liability. |
| What is the meaning of breach of professional duty under 12:1320(D)? | Merritt’s contractor role and licensing could be professional duty. | Merritt not shown as a legislatively recognized professional; license held by LLC. | Not established; Merritt not a professional under statute. |
| Do the four-factor test (negligent/wrongful act) apply to Merritt’s conduct? | Defective foundation work by Merritt constitutes negligent act. | Actions were within LLC contract and inside capacity; no outside-duty breach. | Factors weigh against personal liability; conduct inside LLC scope. |
| Was Merritt acting inside or outside his LLC capacity? | Merritt’s direct involvement in pad creation and supervision could be outside capacity. | Evidence shows actions within LLC contractual framework. | Acted inside capacity; shield of limited liability applies. |
Key Cases Cited
- Charming Charlie, Inc. v. Perkins Rowe Associates, L.L.C., 97 So.3d 595 (La. 2012) (piercing LLC veil; limited liability protections discussed)
- Bernard v. Southern Farm Bureau Casualty Ins. Co., 318 So.2d 9 (La. 1975) (officer/agent personal liability when duty owed to third party)
- Laird v. Travelers Ins. Co., 267 So.2d 714 (La. 1972) (criminal statutes guiding civil liability; use as duty framework)
- Regions Bank v. Ark-La-Tex Water Gardens, LLC, 997 So.2d 734 (La. App. 2 Cir. 2008) (professional vs. trade distinction in LLC context)
- Moore v. McLane Southern, Inc. v. Bridges, 84 So.3d 479 (La. 2012) (context of LLC liability and contract duties)
- Hughes, Inc. v. Bernard, 318 So.2d 9 (La. 1975) (corporate/officer personal liability doctrine)
- Moreno v. Entergy Corp., 105 So.3d 40 (La. 2012) (statutory interpretation framework)