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Law School Case Brief

9 to 5 Fashions, Inc. v. Spurney - 520 So. 2d 1276 (La. Ct. App. 1988)

Rule:

If an officer or agent of a corporation through his fault injures another to whom he owes a personal duty, whether or not the act culminating in the injury is committed by or for the corporation, the officer or agent is liable personally to the injured third party, and it does not matter that liability might also attach to the corporation. La. Civ. Code Ann. art. 2315.

Facts:

A tort action was brought by Plaintiff 9 to 5 Fashions, Inc. against Defendants, the former president of and chief executive officer of Louisiana World Exposition, Inc. (LWE) and Western World Insurance Company, the directors and officers liability and company reimbursement insurer of LWE, for the recovery of damages sustained by means of the alleged nonfeasance, misfeasance and/or fraudulent acts of the former CEO in relation to the uniform supply contract. The trial court ruled in favor of the plaintiff. Defendants appealed.

Issue:

Is the former chief executive officer and president of a company liable for corporate debts to third persons with whom they deal on behalf of the corporation?

Answer:

Yes.

Conclusion:

The court held that the corporation had delegated to the former president the performance of the corporation's duty to exercise due care in fulfilling its contractual obligations to the supplier, and it affirmed that the former president and the insurer, who issued the corporation's officers' and directors' liability insurance policy, were liable to the supplier for the losses on the sale of the excess fabric.

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