Professional Negligence Exception to LLC Liability Shield Narrowly Construed

Pursuant to Louisiana Revised 12:1320, a limited liability company (“LLC”) organized in Louisiana is “solely and exclusively” liable for its members and employees. However, there are narrow exceptions to this exclusive liability protection (e.g. fraud, breach of professional duty, wrongful acts). In a recent case against a residential construction company, personal liability was imposed on the sole member and manager of the LLC. Plaintiff entered into a contract with Pinnacle Homes, L.L.C. (“Pinnacle”) for the construction of a home in Cameron Parish. The only member of Pinnacle was Lenard, a state-licensed contractor. Plaintiff filed suit against both Pinnacle and Lenard alleging that the home did not meet elevation guidelines, requiring plaintiff to spend substantial sums of money to elevate the house. The trial court denied Lenard’s exception for no cause of action and found him personally liable under the professional negligence exception. Similarly, the Louisiana Third Circuit affirmed the trial court’s decision imposing personal liability on Lenard.

On appeal to the Supreme Court of Louisiana, however, Lenard was found not to be a “professional” within the meaning of the professional negligence exception and, therefore, could not be personally liable. The Court observed that contracting is not one of the professional occupations codified and there is no evidence that the Legislature intended for contractors to owe a non-contractual duty to their customers. Extending the professional negligence exception to contractors, the Court warned, would cause untenable results that could expose members of LLCs to personal liability whenever they practice their trade under a state license. The Court further held that Lenard could not be liable under the “other negligent or wrongful act” exception as there was no evidence that Lenard owed a non-contractual duty to the plaintiff. An allegation of poor workmanship, the Court explained, was insufficient to establish negligence under the exception.

Nunez v. Pinnacle Homes, L.L.C.