Richard David Garrett v. Ocean View Swimming Pool Services, LLC

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
January 2, 2025
A party may file with the Supreme Court a
Samuel A. Christensen petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal No. 2023AP2000 Cir. Ct. No. 2022CV1154

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT II

RICHARD DAVID GARRETT,

PLAINTIFF-APPELLANT,

V.

OCEAN VIEW SWIMMING POOL SERVICES, LLC C/O KELLY J. BROWN,

DEFENDANT,

KELLY J. BROWN,

DEFENDANT-RESPONDENT,

ACUITY, A MUTUAL INSURANCE COMPANY,

INTERVENOR.

APPEAL from an order of the circuit court for Racine County:
DAVID W. PAULSON, Judge. Reversed and cause remanded.
No. 2023AP2000

Before Gundrum, P.J., Neubauer and Grogan, JJ.

¶1 GUNDRUM, P.J. Richard David Garrett appeals from an order of
the circuit court granting Ocean View Swimming Pool Services, LLC, (Ocean
View) and Ocean View member-owner Kelly J. Brown’s motion for summary
judgment and dismissing Brown from this suit, concluding that as a member-
owner, Brown could not be held personally liable for his allegedly negligent
maintenance of Garrett’s pool. For the following reasons, we conclude Brown
may be held personally liable, and we reverse and remand for further proceedings.

Background

¶2 Garrett hired Ocean View to perform maintenance on his in-ground
fiberglass swimming pool at his residence. The complaint alleges Ocean View
and Brown negligently performed the maintenance by draining the pool “too
quickly and without using any bracing to account for the impact of hydrostatic
forces on an emptied pool shell during a rainy day at the end of a rainy month
when the ground was saturated.” As a result of such negligence, Garrett further
alleges, the pool was damaged, he lost use of it, and he “will be forced to replace
[it] at considerable expense.”

¶3 Ocean View and Brown moved for summary judgment, seeking
dismissal of Brown from the suit on the basis that he “cannot be held personally
liable for [Garrett’s] alleged injuries, or the alleged negligence of Ocean View”
because Ocean View “is a separate legal entity from Kelly J. Brown, its member
and its owner”; Brown “conducted [Ocean View] as the owner and member of a
limited liability corporation not as an individual”; the work Brown performed on
Garrett’s pool was done “in [his] capacity as the registered agent and sole
employee[] of Ocean View” and all of the work he performed was done within the

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scope “of that which is normally performed pursuant to the estimate that was
provided to” Garrett; “[t]he contract for services rendered to [Garrett] was entered
into under Ocean View”; and “although the work on the swimming pool … was
performed by Kelly J. Brown, it was not done in his personal capacity, it was done
as a member of the Ocean View Swimming Pool Services, LLC.”

¶4 Relying upon our decision in Ferris v. Location 3 Corp., 2011 WI
App 134, 337 Wis. 2d 155, 804 N.W.2d 822, our supreme court’s decision in
Oxmans’ Erwin Meat Co. v. Blacketer, 86 Wis. 2d 683, 273 N.W.2d 285 (1979),
and Brown’s deposition testimony, Garrett countered that

Mr. Brown is personally responsible for his own
negligence. He personally committed and participated in
the draining of the pool. No one else besides Mr. Brown
performed this work. Mr. Brown is not relieved from
personal liability simply because he was acting on behalf of
Ocean View Swimming Pool Services, LLC when he
drained the pool. If Mr. Brown was acting on behalf of
Ocean View … when he drained the pool, that simply
means that both Mr. Brown and Ocean View … may be
liable for Mr. Brown’s negligence.

(Citations omitted.)

¶5 In their summary judgment reply brief and at the hearing on the
motion, Ocean View and Brown in part turned to WIS. STAT. § 183.0304(1) (2021-
22),1 which provides:

A debt, obligation, or other liability of a limited liability
company is solely the debt, obligation, or other liability of
the company. Except as provided in [WIS. STAT.
§§] 73.0306, 183.0403, and 183.0406, a member or
manager is not personally liable, directly or indirectly, by

1
All references to the Wisconsin Statutes are to the 2021-22 version unless otherwise
noted.

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No. 2023AP2000

way of contribution or otherwise, for a debt, obligation, or
other liability of the company solely by reason of being or
acting as a member or manager.

¶6 Relying on this statute, the circuit court granted Ocean View and
Brown’s summary judgment motion and dismissed Brown from the suit,
concluding Brown was “an agent and member of the LLC performing services on
behalf of the LLC at the time this happened.” Garrett appeals.

Discussion

¶7 Garrett contends the circuit court erred in granting Ocean View and
Brown’s summary judgment motion and dismissing Brown on the basis that he
could not be held personally liable because at the time he allegedly damaged
Garrett’s pool, he was doing so on behalf of Ocean View. Garrett is correct; the
court erred.

¶8 We review the circuit court’s grant of summary judgment de novo.
Paskiewicz v. American Fam. Mut. Ins. Co., 2013 WI App 92, ¶4, 349 Wis. 2d
515, 834 N.W.2d 866. “Summary judgment is properly granted if there is no
genuine issue of material fact in dispute and the moving party is entitled to
judgment as a matter of law.” American Fam. Mut. Ins. Co. v. American Girl,
Inc., 2004 WI 2, ¶22, 268 Wis. 2d 16, 673 N.W.2d 65.

¶9 “Wisconsin case law has firmly established that individuals are
liable for their own tortious conduct.” Ferris, 337 Wis. 2d 155, ¶1. In Ferris, we
made clear that corporate agents “may be held personally liable if a fact finder
finds that they engaged in tortious conduct, regardless of whether they acted”
“outside the scope of their authority as corporate agents” or “on behalf of [the
corporation] when they did so.” Id., ¶16. In support of this holding, we turned to

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our supreme court’s decisions in Oxmans’, 86 Wis. 2d 683, and Hanmer v.
DILHR, 92 Wis. 2d 90, 97-98, 284 N.W.2d 587 (1979). We noted that in
Oxmans’, the court stated:

An individual is personally responsible for his own tortious
conduct. A corporate agent cannot shield himself from
personal liability for a tort he personally commits or
participates in by hiding behind the corporate entity; if he is
shown to have been acting for the corporation, the
corporation also may be liable, but the individual is not
thereby relieved of his own responsibility.

Ferris, 337 Wis. 2d 155, ¶14 (quoting Oxmans’, 86 Wis. 2d at 692). And we
further observed that in Hanmer, the court stated:

The general rule is that the agent, as well as the principal
for whom he is acting is responsible for the tortious acts of
the agent. In such situations the corporate shield protects
only those who would otherwise be vicariously liable, not
those whose own conduct is called into question.

In this case it is their own conduct for which appellants
are being held responsible ….

Ferris, 337 Wis. 2d 155, ¶15 (quoting Hanmer, 92 Wis. 2d at 97).

¶10 In addition to relying on Oxmans’ and Hanmer, we further pointed
out in Ferris that “more recently, in Stuart [v. Weisflog’s Showroom Gallery,
Inc., 2008 WI 22,] 308 Wis. 2d 103, ¶¶41-42, [746 N.W.2d 762,] the supreme
court applied the same principle to cases where an individual acting on behalf of a
corporation violates the Home Improvement Practices Act.” Ferris, 337 Wis. 2d
155, ¶15. Rebuffing the Ferris defendants’ contention that the Oxmans’ passage
quoted above was “dicta,” we stated, “When the supreme court intentionally takes
up and announces the law three times [in Oxmans’, Hanmer, and Stuart], we
think it clear that the initial statement was not dicta.” Ferris, 337 Wis. 2d 155,
¶15.

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No. 2023AP2000

¶11 Ocean View and Brown attempt to undermine the above clear,
longstanding, and controlling legal principle by directing us to WIS. STAT.
§ 183.0304(1) and also asserting that the current case is different from Oxmans’
and Ferris because “in those cases, personal liability rested on intentional,
fraudulent misrepresentations made by members.” Because Ocean View and
Brown fail to sufficiently develop either their § 183.0304(1) position or their
Oxmans’-Ferris position, we need not consider them. See ABKA Ltd. P’ship v.
Board of Rev., 231 Wis. 2d 328, 349 n.9, 603 N.W.2d 217 (1999) (“This court
will not address undeveloped arguments.”). That said, we nonetheless observe the
following.

¶12 As to WIS. STAT. § 183.0304(1), Ocean View and Brown assert that
“[t]he clear language of [this] statute preserves the liability of a member of an
LLC for conduct other than as a member or manager”; however, they fail to
wrestle with the language of the statute in any meaningful way.

¶13 The above longstanding common law principle is not in the least bit
undermined by WIS. STAT. § 183.0304(1). Again, that provision states:

A debt, obligation, or other liability of a limited liability
company is solely the debt, obligation, or other liability of
the company. Except as provided in [WIS. STAT.
§§] 73.0306, 183.0403, and 183.0406, a member or
manager is not personally liable, directly or indirectly, by
way of contribution or otherwise, for a debt, obligation, or
other liability of the company solely by reason of being or
acting as a member or manager.

Subsection (1) provides that Brown is not personally liable “for a debt, obligation,
or other liability of the company solely by reason of being or acting as a member
or manager.” (Emphasis added.) Critically, Garrett is not contending, and we do
not here hold, that Brown is legally responsible for liability “of the company”—

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No. 2023AP2000

i.e., of Ocean View. Rather, Garrett contends Brown is legally responsible for
how he personally performed the pool maintenance—his own alleged negligence.
Additionally, Garrett’s claim against Brown personally is not founded at all—
much less “solely”—upon Brown “being or acting as a member or manager” of
Ocean View. See § 183.0304(1). Again, it is founded upon Brown’s own direct,
allegedly negligent actions in performing the maintenance.

¶14 Ocean View and Brown further contend the current case is
distinguishable from Oxmans’ and Ferris because “in those cases, personal
liability rested on intentional, fraudulent misrepresentations made by members.”
To begin, as indicated, Ocean View and Brown do not develop an argument
explaining why it is relevant those cases involved “intentional, fraudulent
misrepresentations,” particularly when neither court suggested its statements
applied to only intentional or fraudulent conduct. But, significantly, we have
previously addressed this very contention in Casper v. American International
South Insurance Co., 2010 WI App 2, 323 Wis. 2d 80, 779 N.W.2d 444, rev’d on
other grounds, 2011 WI 81, 336 Wis. 2d 267, 800 N.W.2d 880.

¶15 In that case, numerous individuals filed suit against Bestway
Systems, Inc., Bestway’s CEO, and others after a Bestway employee driving a
truck in the course of his employment struck the rear of a minivan. 323 Wis. 2d
80, ¶¶1-4. Among other claims, the plaintiffs asserted the CEO was personally
liable for negligently approving the route the employee had been driving because
the CEO was allegedly aware that, according to federal regulations, the route
could not be safely completed. Id., ¶61. The issue before us on appeal was
whether the circuit court erred in rejecting the CEO’s summary judgment motion
asserting he could not be held personally liable for such nonintentional conduct.
Id., ¶62.

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¶16 Like Ocean View and Brown, the CEO contended “that Oxmans’
does not control in this instance because in Oxmans’ the court addressed the
personal liability of a corporate officer for an alleged fraudulent misrepresentation,
whereas here, the claim against the corporate officer lies in negligence.” Casper,
323 Wis. 2d 80, ¶71 (citation omitted). While we agreed Oxmans’ was “not
controlling,” we “disagree[d] that it therefore stands for the conclusion that [the
CEO] asserts—that a corporate officer can never be held personally liable for non-
intentional conduct. To the contrary,” we added, “we find Oxmans’ consistent
with our holding that a corporate officer can be held personally liable for his
negligent acts…. While Oxmans’ may have been factually limited to fraudulent
misrepresentation, the case language is not so limiting.” Casper, 323 Wis. 2d 80,
¶71. “To the extent that [the CEO] may have negligently approved the route in
question,” we stated, “he cannot hide from his own personal liability because he is
a corporate officer.” Id., ¶70. We concluded that the circuit court “properly
determined that a claim for negligence against a corporate officer personally is
permitted as a matter of law.” Id., ¶72.

¶17 The CEO appealed, asking the supreme court to hold that, “as a
matter of law, he cannot be held liable.” Casper v. American Int’l S. Ins. Co.,
2011 WI 81, ¶81, 336 Wis. 2d 267, 800 N.W.2d 880. The court summarized the
plaintiff’s claim as being made against the CEO “as an individual who was
allegedly negligent in the performance of his duties in his capacity as a corporate
officer of Bestway.” Id., ¶81. While the supreme court ultimately reversed our
decision in the case, it did so based on the public policy ground that the injury to
plaintiffs was simply too remote from any negligence of the CEO. Id., ¶¶103-104.
Importantly, the Casper court rejected the CEO’s request that it rein in our court
of appeals decision “allow[ing] personal liability for negligence.” Id., ¶90. The

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court instead stated that even in the context of corporate officers committing
negligent acts “in the scope of their corporate duties,” it was “declin[ing] to hold
that corporate officers may never be held personally liable.” Id., ¶90 (emphasis
added). The court added that “a corporate officer may be liable in some situations
for non-intentional torts committed in the scope of his employment.” Id., ¶105.

¶18 The Casper court also discussed a proposition from 3A WILLIAM
MEADE FLETCHER, FLETCHER CYCLOPEDIA OF THE LAW OF CORPORATIONS,
§ 1135 (2011) (footnotes omitted), that states:

It is the general rule that an individual is personally liable
for all torts the individual committed, notwithstanding the
person may have acted as an agent or under directions of
another. This rule applies to torts committed by those
acting in their official capacities as officers or agents of a
corporation.

Casper, 336 Wis. 2d 267, ¶¶82, 84. The court commented that this rule is “readily
understandable in situations involving intentional torts such as fraudulent
misrepresentation, or situations like driving an automobile where a corporate
officer’s personal negligence would be treated the same as any other driver’s,”
but was “not so clear … when a plaintiff seeks to hold a corporate officer liable for
his negligence in making an executive decision involving business.” Id., ¶84
(emphasis added).2

¶19 As relevant to the case now before us, with its comments on the
Fletcher proposition, the Casper court was agreeing with the rule stated therein as
it relates to holding “officers or agents of a corporation” personally liable “in

2
Despite Garrett’s citation of Casper v. American International South Insurance Co.,
2011 WI 81, ¶81, 336 Wis. 2d 267, 800 N.W.2d 880, in his brief-in-chief, Ocean View and
Brown fail to acknowledge it in their response brief.

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No. 2023AP2000

situations … where a corporate officer’s personal negligence would be treated the
same as any other” employee’s personal negligence. See id., ¶¶82, 84. This, of
course, is completely consistent with the long-articulated rule, noted earlier, see
supra ¶¶9-10, that a corporate officer may be held personally liable for his own
negligent acts like any other employee would be.

¶20 For the foregoing reasons, Ocean View and Brown’s position that
Brown cannot be held personally liable for the allegedly negligent manner in
which he performed maintenance on Garrett’s pool fails, and we reverse and
remand for further proceedings.

By the Court.—Order reversed and cause remanded.

Recommended for publication in the official reports.

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