Gardner v. Eighth Judicial District Court

At issue was whether seven managers of an LLC were subject to suit for personal negligence as individual tortfeasors or under an alter ego theory of liability.Petitioners brought a negligence suit against an LLC and its two LLC managing members (the member LLCs). Petitioners subsequently moved for leave to amend their complaint to add as individual defendants seven persons who had an ownership interest in, or managed, the member LLCs. Petitioners sought to assert direct claims for negligence against the managers in their individual capacities and sought to plead allegations supporting an alter ego theory of liability. The district court denied Petitioners’ motion, concluding that amendment would be futile because Nev. Rev. Stat. 86.371 protected the managers from any liabilities insured by the various LLCs, and Nevada’s LLC statues contained no alter ego exception to that statutory protection. The Supreme Court granted writ relief for Petitioners and directed that Petitioners be allowed to amend their complaint, holding (1) section 86.371 is not intended to shield members or managers of an LLC for liability for personal negligence; and (2) the corporate alter ego doctrine applies to LLCs. View "Gardner v. Eighth Judicial District Court" on Justia Law