White v. Collins Building, Inc.
704 S.E.2d 307
N.C. Ct. App.2011Background
- Plaintiffs allege construction defects in a newly built Wrightsville Beach home purchased from AEA in 2003.
- Abb after defects appeared, Plaintiffs sued Collins Building, Edwin Collins Jr., Kersey Corp., Johnny Kersey, Joseph Williams, and AEA in 2009.
- Defendant moved to dismiss the negligence claim against him in his individual capacity under Rule 12(b)(6); the trial court dismissed.
- Plaintiffs voluntarily dismissed Collins Building, Kersey Corp., Kersey, Williams, and AEA without prejudice in January 2010.
- Plaintiffs allege that negligent supervision by Defendant caused water intrusion, window/door damage, and plumbing failures leading to substantial repairs.
- Court reviews whether a corporate officer can be personally liable for negligence despite corporate structure; finds error in dismissal and reverses/remands.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Defendant can be personally liable for negligence. | White argues Defendant personally negligent, beyond corporate capacity. | Collins asserts no personal liability absent veil piercing or outside scope of employment. | Yes; Defendant may be personally liable; dismissal reversed and remanded. |
Key Cases Cited
- Oates v. JAG, Inc., 314 N.C. 276 (1985) (duty to use reasonable care independent of contract; privity not required in negligence actions)
- Hollowell, 97 N.C.App. 318, 387 S.E.2d 666 (1993) (corporate officers liable for torts committed by them; veil is not absolute shield)
- Wilson v. McLeod Oil Co., 327 N.C. 491, 398 S.E.2d 586 (1990) (corporate officers personally liable for torts in which they actively participate)
- Esteel Co. v. Goodman, 82 N.C.App. 692, 348 S.E.2d 153 (1986) (officer personally liable for tort committed in corporate action)
- Statesville Stained Glass v. T.E. Lane Constr. & Supply Co., 110 N.C.App. 592, 430 S.E.2d 437 (1993) (piercing corporate veil in close corporate contexts; corporate liability does not preclude personal liability when appropriate)
- Sturm v. Harb Dev., LLC, 2 A.3d 859 (2010) (foreign authority acknowledging officer personal liability upon participation in torts; framework relevant to construction defects)
- Brown v. Rentz, 212 Ga.App. 275, 441 S.E.2d 876 (1994) (Georgia court: officer personally liable if he directed or participated in negligent construction)
- Minnis v. Sharpe, 198 N.C. 364, 151 S.E. 735 (1930) (early articulation that officers may be personally liable for their torts)