Question

William Soerries was the sole shareholder of Chickasaw Club, Inc., which operated a popular nightclub of the same name in Columbus, Georgia. Soerries maintained corporate checking accounts, but he paid his employees, suppliers, and entertainers in cash out of the club's proceeds. He owned the property on which the club was located and rented it to the club, but he made the mortgage payments out of the club's proceeds. Soerries often paid corporate expenses out of his personal funds. At 11:45pm on July 31, 1996, eighteen-year-old Aubrey Lynn Pursley, who was already intoxicated, entered the Chickasaw club. A city ordinance prohibited individuals under the age of twenty-one from entering nightclubs, but Chickasaw employees did not check Pursley's identification. Pursley drank more alcohol and was visibly intoxicated when she left the club at 3:00am with a beer in her hand. Shortly afterward, Pursley was killed when she lost control of her car and struck a tree. Joseph Dancause, Pursley's stepfather, filed a suit in a Georgia state court against Chickasaw Club, Inc. and Soerries for damages. Can Soerries be held personally liable? If so, on what basis?

Answer 1

  Can Soerries be held personally liable? If so, on what basis?

I think Soerries is jointly liable with the corporation (Chickasaw Club, )for compensatory damages, and solely liable for punitive  damages. Because,

It is undisputed that Soerries paid his employees, suppliers, and entertainers in cash and not from existing corporate checking accounts.Corporate tax returns showed that, even though the Chickasaw Club was a busy nightclub, it regularly declared business losses. On cross-examination, Soerries failed to explain the substantial difference between reported income on corporate and individual tax returns and evidence regarding cash proceeds from cover charges and alcohol sales. It is obvious that if the individual who is the principal shareholder or owner of the corporation conducts his private and corporate business on an interchangeable or joint basis as if they were one, then he is without standing to complain when an injured party does the same.

As ,In this case, Soerries commingled individual and corporate assets by personally assuming the corporation's financial liabilities, waiving corporate rental payments, or using corporate funds to directly pay his personal mortgage notes and other expenses.Soerries disregarded the separateness of legal entities by commingling and confusing property and control. It is obvious that if the individual who is the principal shareholder or owner of the corporation conducts his private and corporate business on an interchangeable or joint basis as if they were one, then he is without standing to complain when an injured party does the same. Under such circumstances, we can blame that William Soerries is solely liable for punitive  damages jointly liable with the corporation (Chickasaw Club, )for compensatory damages