Cortez v. Nacco Material Handling Group, Inc.

Summarized by:

  • Court: Oregon Supreme Court
  • Area(s) of Law: Corporations
  • Date Filed: 10-02-2014
  • Case #: S060604
  • Judge(s)/Court Below: Kistler, J. for the Court; En Banc.
  • Full Text Opinion

ORS 63.165 immunizes members and managers of an LLC from vicarious liability for the debts, obligations, and liabilities of that LLC. LLC members and managers, however, remain personally liable for acts and omissions to the extent those acts or omissions would be actionable against the member or manager if that person were acting in an individual capacity.

Swanson Group, Inc., owner of Sun Studs, petitioned for review of the Court of Appeal’s decision regarding Cortez’s negligence claim. Cortez, an injured employee of Sun Studs, cross-petitioned for review of the judgment regarding his Employers Liability Law (ELL) claim. Swanson purchased Sun Studs, Inc., a lumber company, and made it into a limited liability company. Cortez was severely injured while working at Sun Studs when a forklift accidentally hit him. Cortez filed suit and alleged that Swanson was negligent and violated the ELL. Swanson moved for summary judgment based on the claim that they were immune from liability. The trial court granted summary judgment regarding Cortez’s ELL claim. The Court of Appeals affirmed the judgment regarding the ELL claim and reversed and remanded regarding Cortez’s negligence claim. Both parties petitioned for review, which the Supreme Court granted. The Supreme Court found that ORS 63.165 did not protect Swanson from liability from its own negligence in managing Sun Studs. In regards to the ELL claim, even though Swanson is not Cortez’s employer, a jury could reasonably find that Swanson retained responsibility for the manner in which the duties were being executed when the injury occurred. Judgment of the Court of Appeals is reversed. Judgment of the trial court affirmed in part; reversed in part and remanded.

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