In most circumstances, you cannot sue the actual owners of a corporation personally for the liabilities of the corporation. This is one of the key reasons that people use companies to insulate themselves from personal liability. Sometimes the company itself can be underfunded and the actual owner, very well off. In those circumstances, the Plaintiff may want to go after the owner. In this recent decision, the Court put some strict limits in place when trying to do that with a case where a bar let a drunk patron get on the roads.
When faced with this situation, plaintiffs will often attempt to “pierce the corporate veil” and impose personal liability on a corporation’s underlying shareholders. However, as the plaintiff in Barnes v. Smith, a recent decision from the Georgia Court of Appeals, now realizes, piercing the corporate veil may be far from a straightforward proposition.
The facts at the center of Barnes occurred on November 19, 2012. On that day, a patron arrived at Hank & Jerry’s Tavern in Rockdale County, Georgia at around 4 p.m. and had a beer and a shot of Jagermeister. The patron left the Tavern but returned at around 11 p.m. and again had half a beer as well as one and a half “Jagermeister bomb” drinks. The night bartender, who was also the supervisor at the Tavern that night and a personal acquaintance of the patron, noticed that the patron’s eyes were glassy and that he was acting belligerently. The bartender unsuccessfully attempted to take the patron’s keys and offered to either call him a cab or drive him home. In an effort to prevent the patron from leaving, the night bartender tried to lock the front door of the Tavern, but a different customer at the Tavern let the patron out in response to his belligerent conduct. The patron told the bartender that he would just rest in his car, which the bartender believed, but shortly thereafter, the patron drove away. The bartender knew that the patron should not be driving, but she did not call the police out of concern about getting the patron in legal trouble.