Can a member of an LLC be held liable for harm caused by lead-based paint pursuant to a — lead-based housing code provision that imposes liability any individual who owns holds

Can a member of an LLC be held liable for harm caused by lead-based paint pursuant to a housing code provision that imposes liability on any individual who “owns, holds, or controls” the title to the property?

SOLUTION

In Allen v. Dackman, 991 A.2d 1216 (Md. 2010), the Maryland Supreme Court held that the lower court erred when it granted summary judgment in favor of Dackman. The court held that Dackman could be held liable for the plaintiffs’ injuries because a reasonable trier of fact could find that he was an “owner” of the property, within the meaning of the Housing Code, and could find that he personally committed, inspired, or participated in the alleged tort. The court also held that if the trier of fact finds that Dackman was an “owner” of the property, then he owed a duty to the plaintiffs under the Code.

The Code defined an “owner” as “any person, firm, corporation who owns, holds, or controls the whole or any part of the freehold or leasehold title to any dwelling or dwelling unit, with or without accompanying actual possession thereof.” The court reasoned that “a reasonable trier of fact could find that Dackman was an ‘owner’ of the property, as the term “owner” was defined in the Housing Code, because there is evidence that he had the ability to change or affect the title to the property purchased in the name of Hard Assets.” In support of this conclusion, the court cited the following facts:

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Respondent Dackman stated in his deposition that he was responsible for running the day-to-day affairs of Hard Assets during the time period when Hard Assets both acquired and sold 3143 Elmora Avenue. Respondent also executed the deed certification when Hard Assets acquired the property, signed the complaint seeking to remove Petitioners from the property, and signed the deed when Hard Assets sold the property.

The court rejected Dackman’s assertion that the Maryland LLC statute shielded him from liability. Although a member of an LLC cannot be held liable for torts committed by an LLC “solely by reason of being a member of the LLC,” an individual may be liable for the torts he personally commits, participates in, or inspires. An individual may also be liable when he “is present on a daily basis during commission of the tort and gives direct orders that cause commission of the tort.” If, for example, Dackman failed to properly inspect the property to see whether anyone was living there, he could held liable to the plaintiffs for negligence. Because the plaintiffs were within the class of persons that the Housing Code was intended to protect, namely occupants of dwellings, and they alleged injuries that the statute was designed to prevent, Dackman owed them a duty of care. This was the case even though they had no lawful right to be on the premises.

In summary the court stated:

The Housing Code was enacted to protect the safety and well-being of occupants of dwellings. This intent was effectuated by imposing upon owners and operators of dwellings a duty to keep those dwellings in a safe condition. Respondent did not personally hold the title to the property at issue in this case, but a reasonable trier of fact could find that he controlled it within the meaning of the Housing Code. A reasonable trier of fact could also find that he personally participated in the tort alleged in this case. Accordingly, he may be held personally liable for the injuries that were allegedly caused by his failure to keep the property in a safe condition.