## Facts

- A September 6, 1999 explosion destroyed a home in Richland, Iowa, killing seven people and injuring six others.
- The likely cause was stray propane gas associated with propane service to the home shortly before the explosion.
- Iowa Double Circle, L.C. (an Iowa LLC) supplied and delivered propane to the residence.
- Farmers Cooperative Association (Keota) held a 95% membership interest in Double Circle; Farmland Industries, Inc. held the remaining interest.
- Keota served as Double Circle’s majority member-manager and provided management services under a written agreement that included “human resource and safety management.”
- A Keota manager oversaw the daily operations of both Keota and Double Circle, though the businesses maintained separate finances and operated as separate entities.
- Estates and injured survivors sued multiple defendants, including Double Circle and Keota, alleging negligence (and related theories) tied to propane safety practices and warnings.
- Keota sought summary judgment, arguing limited liability for LLC members/managers and that plaintiffs had not shown conduct independent of its management role.
- The district court granted summary judgment to Keota on the ground that it could not be personally liable for LLC torts when acting as manager.

## Issues

1. Whether the appellate court had jurisdiction over the appeal from the summary judgment order.
2. Whether an Iowa LLC member-manager is insulated from tort liability for its own alleged tortious conduct when that conduct occurs in the course of managerial duties.
3. Whether the summary-judgment record raised a genuine factual dispute that Keota personally participated in the alleged negligent acts or omissions.

## Decision

- The court held it had jurisdiction to decide the appeal.
- The court reversed the grant of summary judgment for Keota and remanded for further proceedings.
- The court held that LLC limited-liability rules and operating-agreement provisions bar liability based solely on membership or managerial status, but do not immunize a member-manager for its own torts.
- The court concluded the record could support a finding that Keota affirmatively participated in alleged negligent safety-related conduct, making summary judgment inappropriate.

## Legal Principles

- Limited liability for LLC members and managers generally precludes liability imposed solely because of ownership, membership, or managerial status.
- An LLC member or manager may be personally liable for torts in which it personally participates, even when acting within the scope of management.
- A contractual or statutory limitation on status-based liability cannot eliminate liability for one’s own tortious acts.
- Summary judgment is improper where the record permits a reasonable inference that the member-manager actively participated in conduct alleged to have caused the plaintiff’s harm.

## Conclusion

The court held that Iowa LLC limited liability does not shield a member-manager from responsibility for its own tortious conduct undertaken in a managerial role, and it reversed summary judgment because factual questions remained about Keota’s alleged participation in negligent propane-safety actions and omissions.


Estate of Countryman v. Farmers Coop. Ass’n, 679 N.W.2d 598 (Iowa 2004)