## Facts

- Joseph Kubican alleged he was injured during an altercation at Bubba’s Bar and Grill in Bridgeport, West Virginia.
- Kubican sued the bar under negligence theories and sued an individual employee for assault and battery.
- Discovery showed “Bubba’s Bar and Grill” was a trade name used by The Tavern, LLC, whose only members were James Paugh and Lawson Mangum.
- Kubican sought leave to amend to name The Tavern, LLC as the entity defendant, add Paugh and Mangum individually, and assert an LLC veil-piercing claim.
- The proposed veil-piercing allegations asserted that Paugh and Mangum controlled the LLC, commingled funds, used the LLC for personal business, diverted assets, failed to maintain LLC formalities, and operated the business as an alter ego.

## Issues

1. Whether W. Va. Code § 31B-3-303 (limiting member/manager liability “solely by reason of” status) provides complete protection that bars veil-piercing claims against LLC members.
2. Whether the equitable doctrine of veil piercing remains available against LLC members under West Virginia’s LLC act.

## Decision

- The Supreme Court of Appeals of West Virginia answered the certified question “No.”
- The court held the LLC statute does not provide complete immunity from veil piercing and does not abolish the equitable veil-piercing doctrine.
- The matter was remanded for further proceedings, including consideration of the motion to amend and any factual showing supporting veil piercing.

## Legal Principles

- W. Va. Code § 31B-3-303 protects members and managers from personal liability only when liability is asserted solely because of their status as members/managers; it does not bar liability based on misuse of the LLC form.
- Absent clear legislative language, longstanding equitable remedies are not treated as abrogated by statute.
- An LLC veil may be pierced under principles analogous to corporate veil piercing, generally requiring:
  - a unity of interest/alter-ego relationship such that separateness between the entity and individuals no longer exists; and
  - a showing that respecting the entity would sanction fraud, promote injustice, or produce an inequitable result.
- Veil piercing is an extraordinary remedy applied sparingly; relevant factors may include commingling, diversion of assets, disregard of organizational separateness, and use of the entity as a mere conduit for personal affairs.

## Conclusion

West Virginia’s LLC limited-liability statute does not categorically shield LLC members from personal liability where equitable veil piercing is warranted; plaintiffs may pursue veil-piercing claims when supported by facts showing alter ego and resulting fraud or injustice.


Kubican v. The Tavern, LLC, 232 W. Va. 268, 752 S.E.2d 299 (W. Va. 2013)