OMNEL v. Tanner
Plaintiff OMNEL, a California corporation, appeals from a judgment of dismissal following an order sustaining defendant John Tanner’s demurrer to the negligence claim in OMNEL’s first amended complaint (the amended complaint) against him without leave to amend. This case involves a dispute between OMNEL and Tanner’s two companies, defendants Valpo-LLC and Tanner Industries, over a commercial lease agreement. OMNEL also sued Tanner personally. Tanner demurred to the negligence claim against him, contending that the amended complaint failed to state a cause of action because Tanner did not owe OMNEL a duty of care.
On appeal, OMNEL contends the trial court erred in sustaining Tanner’s demurrer to the amended complaint without leave to amend, arguing that corporate officers such as Tanner are personally liable for tortious conduct when they personally direct or participate in the conduct that causes economic harm to third parties. Tanner responds that OMNEL failed to allege any duty owed by him to OMNEL and that corporate officers are not personally liable for negligence when they make decisions in the course and scope of their duties to the corporation that incidentally cause economic harm to a third party but do not cause physical harm or property damage.
Thus, the central issue in this case is whether a corporate officer may be held liable for negligent acts performed in the course and scope of his duties to the corporation when those acts cause only economic harm, as opposed to physical harm or property damage. We conclude that the trial court properly sustained the demurrer because the decisions Tanner made in the course and scope of his duties to Valpo-LLC and Tanner Industries caused only incidental economic harm to OMNEL, and such decisions are protected by limited liability for corporate officers. We therefore affirm the judgment.
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