Case Law Alerts
Standing found where a shareholder alleged an individual injury separate and apart from the corporate entity.
This matter arose from claims of breach of contract, breach of implied contract, quasi contract, breach of the covenant of good faith and fair dealing, and quantum meruit. The defendant argued that the plaintiff lacked standing to bring his claims because the plaintiff’s corporate entity, rather than the plaintiff himself, was the real party at interest with standing. The defendant focused on the fact that the plaintiff did not work for the defendant, but, rather, any work performed was done so through the plaintiff’s corporate entity. The court denied the defendant’s motion to dismiss. While the court acknowledged that “[i]t is well established that, absent a direct individual injury, [a]…shareholder of a corporation lacks standing to sue for an injury to the corporation[,]” it recognized that individual shareholders have standing when they suffer an injury separate and apart from the corporation. Here, the court reasoned that the plaintiff had standing to proceed because the plaintiff alleged a direct injury to himself, rather than those suffered by the corporation, because the plaintiff, not the corporate entity, was harmed by the allegations in the complaint.
Case Law Alerts, 2nd Quarter, April 2021 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2021 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.