Legal Question in Real Estate Law in California

Broker-Officer Liability in Real Estate
Suspended corporation and employing broker (also the sole corp. officer) named in a negligence lawsuit for a transaction conducted while corporation was active. Since a suspended corporation cannot defend itself, will a default judgment against suspended corporation automatically make the broker-officer liable too? Or can the broker-officer still defend himself as an individual? Is broker-officer sheilded under corporate veil?

Asked on 12/24/07, 6:47 pm

2 Answers from Attorneys

George Shers Law Offices of Georges H. Shers

0 users found helpful

0 attorneys agreed

Re: Broker-Officer Liability in Real Estate

I am not sure what section you are citing that a suspended corporation can not defend its self for acts done while it was active. If the former officers are not allowed to defend it, then who is there to serve? Even if that were true, the individual members are allowed to defend themselves. You can only get a default judgment against the party you serve but does not answer. So the default should not apply against the broker [is it the corporation or broker who holds the license, as if it is the corporation then he is no longer acting as a broker because he has no license]. Unless the corporation was a sham, you probably can not pierce the corporate veil. But if the corporation was folded up because of the lawsuit, you should be able to go after what assets it had when first suspended. Being a corporation means the directors an officers are not personally liable, but the corporation is fully liable and can have all of its assets taken away by the winning plaintiff.

Answered on 12/25/07, 8:57 pm

Mark as helpful