Opinion ID: 877388
Heading Depth: 1
Heading Rank: 1

Heading: Liability of Corporate Agent.

Text: Judgment was entered against Fred Bernatz, individually, and Grizzly Manufacturing, Inc. Appellants contend that Bernatz, who was president of Grizzly Manufacturing, should have been dismissed as a party. The liability of an agent to a party dealing with the principal or corporation is covered by section 28-10-702, MCA, as follows: One who assumes to act as an agent is responsible to third persons as a principal for his acts in the course of his agency in any of the following cases and in no other: 1) When, with his consent, credit is given to him personally in a transaction; 2) when he enters into a written contract in the name of his principal without believing in good faith that he has authority to do so; or 3) when his acts are wrongful in their nature. There was no evidence that Fred Bernatz received personal credit or acted without authority or acted outside the scope of his agency. In order for Bernatz to be personally liable, therefore, there must be evidence to support a finding that he was personally negligent or that his actions or omissions were tortious in nature. Mr. Bernatz was not present when the modular home was installed on the Littles' foundation. He testified, There could have been bad handling or something in the process of the transfer from the trailer to the foundation, but nothing I am aware of or was reported by our people. He stated that he had been through the home with the Littles when it was being constructed at the plant. Mrs. Little called him on several occasions with complaints, and a Grizzly representative would make a service call. Bernatz personally did not know of any case where the company failed to respond to a complaint. There was no evidence that he was aware of any negligent construction, or that he participated in the actual construction process. Application of the doctrine of piercing the corporate veil to avoid fraud or injustice is inappropriate here. In Montana, officers of a corporation have been held personally liable where it was shown that the corporation was merely an alter ego for a person using a shield for purposes of fraud. See Shaffer v. Buxbaum (1960), 137 Mont. 397, 352 P.2d 83; Wilson v. Milner Hotels, Inc. (1944), 116 Mont. 424, 154 P.2d 265. There is no evidence that the corporation was defectively formed or that it was formed with the intent to avoid personal liability. As a matter of public policy, the officers and agents of a corporation must be shielded from personal liability for acts taken on behalf of the corporation in furtherance of corporate goals, policies and business interests. Phillips v. Montana Ed. Ass'n (1980), Mont., 610 P.2d 154, 37 St.Rep. 821. The exception to this policy is where the officer personally committed a tort. There is no evidence to support a finding that Bernatz committed a tort. Therefore, the motion to dismiss him as a party defendant should have been granted.