Opinion ID: 1998264
Heading Depth: 2
Heading Rank: 1

Heading: Spence's Personal Liability

Text: [¶ 10] The jury found Spence individually liable on the abuse of process claim and liable, jointly and severally with Advanced, on the statutory claims. Spence argues that he cannot be held individually liable unless the requirements for piercing the corporate veil are satisfied. We allow the corporate veil to be pierced when the party seeking to do so establishes that the other party abused the privilege of a separate corporate identity and an unjust or inequitable result would occur if the court recognized the separate corporate existence. State v. Weinschenk, 2005 ME 28, ¶ 19, 868 A.2d 200, 207. Whether the corporate form should be disregarded involves factual findings that are reviewed for clear error. See McCain Foods, Inc. v. St. Pierre, 463 A.2d 785, 787 (Me.1983); see also Crane v. Green & Freedman Baking Co., Inc., 134 F.3d 17, 22-23 (1st Cir.1998). [¶ 11] Spence argues that because the jury found in his favor on the fraud claim, the jury's verdict on personal liability cannot stand. However, fraud is not a prerequisite to piercing the corporate veil. See Johnson v. Exclusive Props. Unlimited, 1998 ME 244, ¶ 8, 720 A.2d 568, 572. While a finding of fraud can make it easier to find that there has been an abuse of the privilege of a separate corporate identity, a jury could find abuse without finding fraud. Furthermore, although the jury did not find that Spence and Advanced committed fraud, the jury did find that they violated the DTPA by engaging in a deceptive trade practice. See 10 M.R.S. § 1212. [¶ 12] Nonetheless, even though there may have been sufficient evidence for the jury to find that Spence had abused the privilege of a separate corporate identity, there was no evidence from which the jury could have found that an unjust or inequitable result would occur if the separate corporate existence were recognized. There was no evidence that the corporation was undercapitalized, insolvent, or bankrupt. See Weinschenk, 2005 ME 28, ¶ 20, 868 A.2d at 207. There was no evidence from which the jury could find that a verdict against Advanced would be worth less than a verdict against Spence. Thus, the Pileckis did not satisfy the requirements for piercing the corporate veil.
[¶ 13] The Pileckis do not argue that there was evidence to warrant piercing the corporate veil. Instead, they argue that piercing the corporate veil is not the only theory for holding corporate employees or agents individually liable to third parties. Corporate officers who participate in wrongful acts can be held liable for their individual acts, and such liability is distinct from piercing the corporate veil. Donsco, Inc. v. Casper Corp., 587 F.2d 602, 606 (3d Cir.1978). The individual liability stems from participation in a wrongful act, and not from facts that must be found in order to pierce the corporate veil. Id. Corporate employees who commit an unfair trade practice within the scope of their employment can also be held personally liable. See Mariello v. Giguere, 667 A.2d 588, 590-91 (Me.1995) (affirming the personal liability of a corporate employee salesman for fraudulent misrepresentation and suggesting that the employee would be personally liable under the current UTPA, which was not in effect at the time). Furthermore, shareholders of a business corporation can be personally liable for their own acts. 13-C M.R.S. § 623(2) (2005). [¶ 14] A finding that a corporate officer has participated in a wrongful act is reviewed for clear error. See Weinschenk, 2005 ME 28, ¶ 8, 868 A.2d at 204-05 (stating that whether a trade practice is deceptive or unfair is a question of fact and that violations of the UTPA are reviewed for clear error). Factual findings are clearly erroneous when there is no competent evidence in the record to support them. Id. [¶ 15] It was not error for Spence to be held individually liable for abuse of process, and jointly and severally liable with Advanced for the statutory violations. There was evidence that after threatening the Pileckis that he would do so, Spence himself initiated the filing of the lien that gave rise to the abuse of process claim. [4] Further, there was evidence that Spence's individual representations and conduct before and during construction, and after he stopped working on the house, constituted violations of the HCCA, the UTPA, and the DTPA.
[¶ 16] In an action for the tortious conduct of an agent, both the agent and the principal can be held liable. RESTATEMENT (SECOND) OF AGENCY § 217B(1) (1958); County Forest Prods., Inc. v. Green Mountain Agency, Inc., 2000 ME 161, ¶¶ 43-44, 758 A.2d 59, 69-70. Actions pursuant to the UTPA and actions for unlawful and deceptive conduct sound in tort. Drinkwater v. Patten Realty Corp., 563 A.2d 772, 774 (Me.1989). The president of a corporation is an agent of the corporation. See RESTATEMENT (SECOND) OF AGENCY § 14C cmt. b. [¶ 17] A finding that an agency relationship exists is reviewed for clear error. County Forest Prods., 2000 ME 161, ¶ 21, 758 A.2d at 65. There was evidence that Spence, as its sole shareholder and president, was an agent of Advanced. For the same reasons that it was not error for Spence to be held personally liable for his individual participation in wrongful acts while a corporate officer, it was not error for Spence to be held personally liable for his individual acts while a corporate agent. Either theory supplies a sufficient basis for Spence's personal liability.