Kubican v. The Tavern, LLC

752 S.E. 2d 299 (2013)

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Nature of the Case

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Facts

An altercation took place at Bubba's Bar and Grill in Bridgeport, West Virginia. Kubican (P) filed a complaint naming as defendants Bubba's Bar and Grill and Harry Wiseman. P made claims in (1) negligence; (2) negligent training and supervision of bar staff and security personnel; and (3) gross negligence, willful, wanton and reckless misconduct. P eventually learned that Bubba's Bar and Grill was a DBA used for business purposes by The Tavern, LLC (D). P also learned that James Paugh and Lawson Mangum were the only members of D. P sought leave to amend his complaint to assert a veil-piercing count against Paugh and Mangum. P had evidence that they held themselves out to others as the owners of The Tavern d/b/a Bubba's Bar and Grill; held themselves out as personally responsible for the debts of the company; commingled personal funds with those of the company; used the company to conduct personal business; used the company as a conduit to procure business and services for related entities; failed to adhere to legal formalities necessary to maintain limited liability company status; diverted the company's assets to their own benefit and use; failed to maintain records of the company's corporate and business activities; failed to insure the company and left it grossly undercapitalized for the reasonable risks of owning and operating a bar; and operated the company as a mere alter ego of themselves. On November 1, 2011, the West Virginia Secretary of State issued a 'Certificate of Administrative Dissolution' certifying that D had failed to file its annual report and/or pay the annual report fee as required by West Virginia law. The trial court certified the question of whether West Virginia’s version of the Uniform Limited Liability Company Act protected members of an LLC against veil piercing.