Michaelis v. Benavides

In Michaelis v. Benavides (1998) 61 Cal.App.4th 681, defendant Anthony Benavides was the only person with the corporate contractor who held a contractor's cement license. (Id. at p. 683.) He also was its president, director, and 50 percent shareholder. (Ibid.) He "personally bid for plaintiffs' cement job. He personally made the construction decisions for the patio and driveway. His brother . . . provided the manual labor." (Ibid.) At the hearing on Benavides's motion for nonsuit, he stipulated that he was negligent in constructing the plaintiffs' patio and driveway. (Ibid.) Michaelis noted the parties stipulated, for purposes of Benavides's nonsuit motion, that he "was individually negligent in building plaintiffs a patio and driveway. This acknowledges that a breach of duty owed to plaintiffs as third parties was violated, rather than merely a breach of duty he owed to his corporation." (Id. at p. 686.) The court further stated: "In addition, plaintiffs alleged facts indicating Benavides may be personally liable for the negligent act by his direct participation and decisionmaking in the construction of the patio and driveway. These allegations, together with the parties' stipulation, prevent Benavides from using the corporate veil to shield himself from personal liability." (Ibid.) Benavides "personally made the decisions to use cheaper materials and construction methods which allegedly resulted in the patio's and driveway's structural inadequacies." (Ibid.) Accordingly, Michaelis concluded: "The instant circumstances involve a corporate officer's personal tortious conduct, which conduct breached a duty of care to a third party and caused the third party to suffer physical damage to his property." (Id. at p. 687.) It stated: "The corporate fiction was never intended to insulate officers from liability for their own tortious conduct." (Id. at p. 688.) Therefore, the Michaelis court reversed the trial court's judgment of nonsuit for Benavides. (Ibid.)