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CORPORATE OFFICER COULD BE PERSONALLY LIABLE FOR CONVERSION AND FRAUD, CAUSES OF ACTION AGAINST THE OFFICER PERSONALLY SHOULD NOT HAVE BEEN DISMISSED AS SHIELDED BY THE CORPORATE STRUCTURE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that defendant (Cina), an officer of defendant corporation (Artisan), could be held personally liable for his tortious acts. Supreme Court had held the corporate structure insulated Cina from personal liability. It was alleged Cina misrepresented that limestone had been stolen, inducing plaintiff to purchase replacement limestone:

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“A director or officer of a corporation does not incur personal liability for its torts merely by reason of his [or her] official character” … , and thus, cannot be liable for torts “attributable to the corporation if he [or she] did not participate in and was not connected with the acts in any manner” … . However, ” [a] corporate officer who participates in the commission of a tort may be held individually liable, regardless of whether the officer acted on behalf of the corporation in the course of official duties and regardless of whether the corporate veil is pierced'” … .

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Here, the Supreme Court incorrectly directed the dismissal of the causes of action alleging conversion and fraud insofar as asserted against Cina on the ground that there was “no basis on which to pierce the corporate veil.” The complaint adequately alleged that Cina participated in the act allegedly constituting conversion by asserting that Cina arranged to have the replacement limestone delivered to [another party] instead of the plaintiff, and that he participated in the alleged fraud by knowingly misrepresenting the facts regarding the delivery of the original limestone, with the intent of inducing the plaintiff’s detrimental reliance. That Cina’s alleged conduct may have been committed “on behalf of the corporation in the course of official duties” does not prevent liability from being imposed upon him … . North Shore Architectural Stone, Inc. v American Artisan Constr., Inc., 2017 NY Slip Op 06655, Second Dept 9-27-17

 

CORPORATION LAW (CORPORATE OFFICER COULD BE PERSONALLY LIABLE FOR CONVERSION AND FRAUD, CAUSES OF ACTION AGAINST THE OFFICER PERSONALLY SHOULD NOT HAVE BEEN DISMISSED AS SHIELDED BY THE CORPORATE STRUCTURE (SECOND DEPT))/INTENTIONAL TORTS (CORPORATE OFFICERS, PERSONAL LIABILITY, CORPORATE OFFICER COULD BE PERSONALLY LIABLE FOR CONVERSION AND FRAUD, CAUSES OF ACTION AGAINST THE OFFICER PERSONALLY SHOULD NOT HAVE BEEN DISMISSED AS SHIELDED BY THE CORPORATE STRUCTURE (SECOND DEPT))/FRAUD (CORPORATE OFFICERS, PERSONAL LIABILITY, CORPORATE OFFICER COULD BE PERSONALLY LIABLE FOR CONVERSION AND FRAUD, CAUSES OF ACTION AGAINST THE OFFICER PERSONALLY SHOULD NOT HAVE BEEN DISMISSED AS SHIELDED BY THE CORPORATE STRUCTURE (SECOND DEPT))/CONVERSION (CORPORATE OFFICERS, PERSONAL LIABILITY, CORPORATE OFFICER COULD BE PERSONALLY LIABLE FOR CONVERSION AND FRAUD, CAUSES OF ACTION AGAINST THE OFFICER PERSONALLY SHOULD NOT HAVE BEEN DISMISSED AS SHIELDED BY THE CORPORATE STRUCTURE (SECOND DEPT))/OFFICERS (CORPORATE OFFICER COULD BE PERSONALLY LIABLE FOR CONVERSION AND FRAUD, CAUSES OF ACTION AGAINST THE OFFICER PERSONALLY SHOULD NOT HAVE BEEN DISMISSED AS SHIELDED BY THE CORPORATE STRUCTURE (SECOND DEPT))

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