Legal Question in Civil Litigation in Arizona
LLC Officer, Director and Stockholder Liability
I belong to a Flying Club which owns no planes but arranges Fly-Ins. The Club assigns passengers to the various planes owned by the members based on Weight and Balance Conformance, Reserves Vans and Cars, Museum admissions, Motel Rooms, etc. The club pays for these in advance and collects from the participants.
I believe the Club could be subject to liability in the event of an accident and the pilots a not insured or underinsured.
We have been advised by a member that even if we form an LLC, the Officers, Directors and Members could be sued and found guilty. I believe they could only be subject to liability if there were Criminal Act(s) or Criminal Negligence.
Am I correct or is the member correct?
1 Answer from Attorneys
Re: LLC Officer, Director and Stockholder Liability
The member is correct. The club and its officers/directors could be sued for ordinary negligence should someone be hurt and it was contended, for example, that the club did not do a proper/thorough job of checking out planes/pilots.
The solution is to (1) have the club indemnify the officers/directors in its by-laws for their negligent acts performed in discharging the business of the club, and (2) have plenty of insurance.
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