Wisconsin Lawyer
Vol. 79, No. 2, February 2006

Piercing the Corporate Veil

by Mark R. Hinkston

orporate shareholders and officers are generally insulated from personal liability for the corporation's debts. This limited liability is metaphorically known as the "corporate veil." But the veil is not an absolute shield. Under certain circumstances, a court may pierce it to hold a shareholder or officer personally liable. Piercing is most commonly done when a corporation is the shareholder's "alter ego" and is a sham or façade used to evade creditors or commit fraud.

As demonstrated by recent Wisconsin Court of Appeals decisions, piercing is not confined to the "alter ego" context. In Rayner v. Reeves Custom Builders Inc.,¹ the Wisconsin Court of Appeals held that personal liability attaches when a shareholder or officer violates consumer regulations such as Wisconsin's Home Improvement Code. The Rayner holding has the potential to affect the officers, agents, and employees of many businesses that sell goods and services to consumers.

In Advantage Leasing Corp. v. NovaTech Solutions,² the court of appeals held that corporate veil piercing was not necessary to impose liability on a corporation's officer for her own tortious conduct because a person is personally liable for his or her own torts, regardless of status as a corporate officer or shareholder, even if the acts were committed within the scope of employment. These two cases present the opportunity to review the concept of piercing the corporate veil in Wisconsin, discuss situations in which piercing is appropriate, and highlight contexts in which the concept will be inconsequential in determining personal liability.

Personal Liability: The Alter Ego Doctrine

The Rule of Limited Liability. It has long been recognized that a corporation is an entity separate and distinct from its shareholders, even when it is owned by one person.³ Therefore, shareholders are not automatically liable for corporate debt⁴ and are not liable on the corporation's contracts.⁵ This rule of limited liability - referred to by the Wisconsin Supreme Court as the "the accouterment of incorporation"⁶ - is an incentive to shareholders to invest and "has been called the most important legal development of the nineteenth century."⁷

Although limited liability is the rule, personal liability for corporate debt is sometimes imposed as a result of statute, such as in cases involving employers' tax withholding obligations, wage and retirement benefits, and environmental liability. In other cases, personal liability may arise because of contractual obligations, such as when a shareholder signs a personal guaranty.⁸

In situations in which statutes or contracts do not compel piercing, a court may invoke common law equity to do so. Typically this is done on the basis of what is known as the "alter ego" doctrine. In 1931, in Milwaukee Toy Co. v. Industrial Commission of Wisconsin,⁹ the Wisconsin Supreme Court described the doctrine by stating that limited liability will be disregarded and the corporate veil will be pierced when the corporation has no separate existence and a person deals with his or her own property through a corporation just as if he or she were dealing with it individually, and "applying the corporate fiction would accomplish some fraudulent purpose, operate as a constructive fraud, or defeat some equitable claim."¹⁰ The concept also is known as the "instrumentality" doctrine because to invoke it one must "establish that the corporate form was so ignored, controlled or manipulated that it was merely the instrumentality of another and that the misuse of the corporate form would constitute a fraud or promote injustice."¹¹

The typical "alter ego" situation is one in which the shareholder disguises personal assets as corporate assets to get an advantage with a creditor and the creditor is induced to extend credit or provide goods or services under the assumption that the corporation has significant assets. In reality, the corporation is a shell to hide what are in fact the shareholder's assets.¹² If the debtor corporation defaults on a loan or fails to pay for goods or services and the creditor has little or no hope of recovery from the corporation, the creditor may try to pursue the shareholder personally. The shareholder in turn asserts the defense of limited liability. The "alter ego" doctrine also comes into play when a creditor seeks to hold one company liable for the debt of an affiliated company (such as a subsidiary).¹³

Yet the vast majority of "alter ego" piercing cases involve attempts to pierce small, closely-held corporations (in which the number of shareholders and their interrelationship - often as family members - lend to the entity less formality than in larger entities) to pursue individual shareholders. Wisconsin courts have applied the "alter ego" doctrine to impose personal liability in scenarios in which: 1) a corporation had no assets and the shareholders made little attempt to hold meetings or maintain records and depleted the corporation's profits by paying themselves salary;¹⁴ and 2) two brothers, as sole shareholders in various corporations, operated the corporations "as a giant cash box with many drawers," adding or removing from the drawers "as desired, without documentation to permit subsequent identification or reconstruction of the transactions."¹⁵

The Prima Facie Elements. The concepts of "veil piercing" and "alter ego" are perhaps clear in theory but sometimes nebulous in application, leading Justice Benjamin Cardozo to comment that the veil piercing doctrine is "enveloped in the mists of metaphor."¹⁶ For almost 60 years after the Wisconsin Supreme Court's pronouncement of the "alter ego" doctrine in Milwaukee Toy, Wisconsin courts continued to apply its somewhat amorphous litmus test but there were no uniformly applied factors to judge whether piercing was warranted in a given case.

In 1988, in Consumer's Co-op of Walworth County v. Olsen,¹⁷ the Wisconsin Supreme Court attempted to clarify the situation by formulating a three-part test. It held that to prevail on a piercing claim premised on the "alter ego" doctrine, a plaintiff must prove: 1) that the defendant shareholder completely dominates the business practice with respect to a subject transaction to the extent that the corporation has "no separate mind, will or existence of its own"; 2) that the defendant shareholder used the control to commit fraud or wrong, to violate a statutory or other legal duty, or to act dishonestly or unjustly; and 3) that there was a causal connection between the first two elements and the harm to the plaintiff.¹⁸

The first prong's focus is on control, not ownership. Thus, the mere fact that one person owns all shares in a corporation will not suffice.¹⁹ In ascertaining whether there has been "complete domination" or control, a court assesses the extent to which an entity follows corporate formalities.²⁰ For example, has the corporation conducted meetings, maintained corporate records, and filed annual reports with the state? Other factors that a court considers are: nonpayment of dividends, siphoning of corporate funds by the dominant shareholder, commingling of personal and corporate funds, and nonfunctioning of other officers or directors.²¹

As for the second prong, one must prove that the control emanating from the corporate informality caused an injustice. Whether a corporation was adequately capitalized when it was formed is a relevant determination with respect to this factor,²² the idea being that insufficient capital infusion is a red flag that a corporation was started as a sham. There is no specific formula to ascertain whether a company is adequately capitalized. Adequate capitalization is "measured by the nature and magnitude of the corporate undertaking" at the time of the company's formation.²³

Some creditors unwisely assume that because a corporation defaulted, it must have been undercapitalized. However, the relevant time period to analyze capital adequacy is when the corporation was formed.²⁴ Proving a corporation that was adequately funded on formation became undercapitalized due to business losses will not suffice. Nevertheless, if shareholders fail to infuse needed capital after an existing corporation significantly changes the nature of its business or substantially expands, this may constitute undercapitalization sufficient to satisfy the injustice prong.²⁵

The third prong requires a nexus between the domination-caused injustice and an alleged injury. Injury will not be presumed. Merely because a creditor is owed money by a company that is discovered to have been undercapitalized at inception does not mean that the controlling shareholder is personally liable for the debt. An unpaid creditor trying to pierce the corporate veil must show that it relied on a controlling shareholder's financial misrepresentations (made to disguise undercapitalization) when the creditor extended credit or goods and services, thereby causing its loss.

All three of the prima facie elements elaborated in Consumer's Co-op (control, injustice, and causation) must exist for the court to allow piercing of the corporate veil.²⁶ A court will not pierce the veil of an adequately capitalized corporation merely because corporate formalities are not maintained.²⁷ Nor will a court pierce the veil of a corporation that maintains corporate formalities just because it may have been undercapitalized at the start.²⁸

In Consumer's Co-op, the supreme court applied its three-part test and reversed the trial court's finding that the veil of the family-owned business could be pierced to impose liability on the business's majority shareholder. The supreme court noted that because "stock was issued, officers were elected, meetings of the board of directors were frequently held, and all business was undertaken in the corporate name" with no improper commingling of business and corporate assets, the corporation adequately followed corporate formalities.²⁹ It also held that the initial capitalization of $7,000 was adequate in view of the fact that the company initially had one customer and one part-time employee.³⁰

Defenses: Waiver and Estoppel. Creditors may be found to have waived the right to pierce the corporate veil. In Consumer's Co-op, the supreme court noted that despite the debtor corporation's deteriorating financial condition and a notice on statements that "additional credit cannot be extended until your account is brought current," the creditor allowed the corporation to become further indebted to it. Despite its knowledge that the corporation was failing, the creditor also neglected to get a personal guarantee "initially, or as a condition to the continued receipt of credit." The court concluded that by continuing to extend credit and increase the corporation's indebtedness, despite its own policy to terminate credit after 60 days, the creditor "waived the right to claim inadequacy of capitalization as a basis to pierce the corporate veil."³¹ The court also found that the doctrine of estoppel precluded piercing since the shareholder detrimentally relied on the extension and continuation of credit "without any request for a personal guarantee or indication that Consumer's Co-op would seek to hold appellant personally liable for the debt incurred."³²

LLC Application. The Wisconsin Supreme Court has urged flexibility in applying the "alter ego" elements due to the equitable nature of the remedy.³³ Flexibility has become especially paramount with the advent and popularity of new business entities, such as limited liability companies (LLCs). Wisconsin appellate courts have not specifically addressed the issue of whether an LLC's veil can be pierced to impose personal liability on LLC members or managers. That perhaps is because Wis. Stat. section 183.0304 ("Liability of members to 3rd parties") appears to expressly mandate veil piercing under appropriate circumstances. The statute provides that although an LLC's debts, obligations, and liabilities "shall be solely the debts, obligations and liabilities of the limited liability company," a court is not precluded from "ignoring the limited liability company entity under principles of common law of this state that are similar to those applicable to business corporations and shareholders in this state and under circumstances that are not inconsistent with the purposes of this chapter."

Some commentators argue that LLC veil piercing is inappropriate.³⁴ An LLC's "corporate formalities" are less stringent than those of a corporation and LLC tax considerations may blur the line between an individual member and the company entity, perhaps giving a creditor an unfair advantage when attempting to pursue an LLC member personally. Nonetheless, in view of section 183.0304 it would seem clear that personal liability could nonetheless be imposed on an LLC member or manager provided that the Consumer's Co-op factors exist.³⁵

Personal Liability: Violation of Consumer Regulations

The Rayner Case. The promulgation of consumer protection laws has created additional contexts that implicate veil piercing. For example, in Rayner v. Reeves Custom Builders Inc.,³⁶ the Wisconsin Court of Appeals considered what it called an issue of first impression under Wisconsin law, namely whether the consumer protection regulations relating to home improvements "pierce the corporate veil and allow for personal liability against individual wrongdoers." It held "that they do if it is shown that the individual - rather than the entity - is responsible for devising the unfair method of selling home improvements."³⁷

The Rayners had entered into a written home improvement contract with the defendant company for remodeling and an addition. They became dissatisfied and brought suit, alleging claims for breach of contract and violations of the Wisconsin Administrative Code regulations relating to home improvement practices (also known as the Wisconsin Home Improvement Code) (hereinafter "Code").³⁸ The Code was promulgated by the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) pursuant to Wis. Stat. section 100.20(2), which is designed to prevent unfair trade practices. The claims were asserted against Reeves Custom Builders Inc. and Arthur and Beth Reeves (husband and wife) personally, as the company's shareholders, officers, and directors.

The Reeveses filed a motion to dismiss, arguing that to hold them personally liable would contravene the hallowed concept of limited liability. The Rayners contended that personal liability could be imposed on the Reeveses because, as officers, they fit within the Code's definition of a "seller": a "person engaged in the business of making or selling home improvements [including] corporations, partnerships, associations and any other form of business organization or entity, and their officers, representatives, agents and employees." The Reeveses, on the other hand, argued that the phrase "and their officers, representatives, agents and employees" was merely intended to make employers vicariously liable for those individuals, with no personal liability imposed. The circuit court disagreed and denied their motion to dismiss.³⁹

On appeal, the Reeveses relied on Alberte v. Anew Health Care Services Inc.,⁴⁰ in which the Wisconsin Supreme Court held that the Americans with Disabilities Act (ADA) did not make an employer's agent personally liable for ADA violations. The court of appeals rejected the Reeveses' argument, finding that although under the ADA the term "employer" included "any agent of such person[s]," the considerations that led the supreme court to conclude that there was no personal liability under the ADA would not apply in the home improvement context. Foremost among these considerations was that in most companies not in the home improvement business, employers' personnel decisions involve internal business practices that can be controlled by employers via "administrative oversight." On the other hand, "the home improvement industry involves individuals interacting with people on the outside," usually at a customer's home, where "the employer has little opportunity to exercise direct oversight of its agents" to prevent violations.⁴¹

The court construed "their officers, representatives, agents and employees" to have a plain meaning that "all of the named individuals and entities are potential sources of the unfair methods of dealing that Wis. Stat. § 100.20 meant to stamp out" and noted that "[t]o the extent individuals have the power to prevent unfair dealings with consumers, individuals will incur liability for noncompliance."⁴² The court clarified that its ruling did not mean that all officers, shareholders, or employees will be "vicariously liable for all vices imputable to the corporation." Individuals are "liable as sellers only when they commit violations of their own volition and design."⁴³

The court of appeals then ruled that the circuit court properly refused to dismiss Arthur Reeves from the action since, as the corporate president and "contact person" with the buyers, "[a]ny corporate decision to act as he did originated with him."⁴⁴ The court held that there was insufficient evidence to impose personal liability on Beth Reeves, because although she was a shareholder, her role was merely typing some documents, doing some of the corporate books, answering the telephone, and performing administrative functions.⁴⁵

Practical Considerations: Rayner's Impact. Although Rayner involved the home improvement context, its holding should be a harbinger to those in other businesses governed by consumer regulations. For example, under Wisconsin's Motor Vehicle Repair Code (chapter ATCP 132), a repair "shop" is defined as "any natural person, corporation, partnership, or other business association or entity engaged in the motor vehicle repair business, and includes all owners, officers, employ[ees] and agents of the shop."⁴⁶ Several other consumer regulations promulgated by the DATCP define the regulated entity broadly to include officers, agents, representatives, and employees, including regulations applicable to sales of frozen meat,⁴⁷ basement waterproofing,⁴⁸ mobile home park operation,⁴⁹ and gasoline advertising.⁵⁰ In view of these definitions, it is reasonable to assume that the court's logic in Rayner may apply in these other contexts to impose personal liability, but - as in Rayner - only to the extent the individuals have the power to prevent unfair dealings with consumers and "only when they commit violations of their own volition and design."⁵¹

Officers in corporations governed by consumer regulations should be aware that the "volition and design" edict may not mean only violations in which officers actively participate. For example, the construction trust fund statute imposes personal liability on officers and directors who are "responsible for the misappropriation."⁵² The Wisconsin Court of Appeals has held that it does not matter that the targeted officer was not the actual person who misappropriated the funds.⁵³ The failure to take action to prevent the misappropriation, an act of omission rather than commission, is enough to impose liability. In view of that precedent, officers should take action to ensure that their company does not run afoul of regulations that govern their business, because if a violation does occur, the officers may be held responsible if they sat back and failed to act.

Personal Liability: Own Tortious Conduct

The Rayner decision is a natural offshoot of the principle reiterated over the years by Wisconsin courts that an individual is personally responsible for his or her own tortious or improper conduct and cannot use the corporate entity as a shield against personal liability for a tort he or she personally commits or participates in.⁵⁴ The Wisconsin statutes codify this principle, providing that both a corporate shareholder and an LLC member or manager "may become personally liable by his or her acts or conduct other than as" a shareholder or member or manager.⁵⁵

Many officers and employees assume that the shield of respondeat superior cloaks them from anything they do on the job. Yet it has always been the rule that they can be held personally liable for their own negligence, even when they are acting within the scope of their employment.⁵⁶ The Wisconsin Court of Appeals recently highlighted the issue in an unpublished decision, Advantage Leasing Corp. v. NovaTech Solutions.⁵⁷ In that case, the plaintiff ordered computer equipment from NovaTech to lease it to another company. Advantage alleged that it paid NovaTech for the equipment on the NovaTech president's representation that the equipment had been delivered to the lessee. When it turned out that it had not been delivered, Advantage sued and asserted a claim for intentional misrepresentation against NovaTech's president personally.

The president moved for summary judgment, alleging that the plaintiff had not presented enough evidence to allow the court to pierce the corporate veil. The circuit court agreed, relying on the mandate in Consumer's Co-op that piercing is not warranted in the absence of any of the three necessary elements. The court of appeals reversed, holding that the circuit court's reliance on Consumer's Co-op was misplaced. It noted that the plaintiff was not seeking to pierce the corporate veil and hold the defendant liable for a corporate debt but, rather, was seeking to hold the president liable for her own tortious conduct.

Personal Liability: Undisclosed Corporate Principal

An additional scenario in which personal liability may be imposed against a corporate actor is when he or she acts on behalf of the corporation without disclosing that fact. In Benjamin Plumbing Inc. v. Barnes,⁵⁸ the Wisconsin Supreme Court reiterated that if a party contracting with a corporation knows that a corporate agent is contracting on behalf of a corporation, the agent is not personally liable on the contract unless he or she expressly assumes such liability. An agent may be held personally liable for the contractual debt if he or she fails to disclose to the contracting party the principal's corporate status.⁵⁹ It is the agent's burden to disclose the principal's corporate status because the contracting party does not have the burden of "ferret[ing] out the record ownership" of the principal's business.⁶⁰ Shareholders or LLC members who fail to take appropriate steps to dissolve their entities also may face liability for the company's debts.⁶¹

Conclusion

Creditors may think that an injustice is served when a debtor company fails, leaving them with no recourse other than to pursue the shareholders personally. But they must heed the Wisconsin Supreme Court edict that "the fiction of the corporate entity is not to be lightly regarded."⁶² Hence, piercing is an exceptional remedy that will be invoked only when the three Consumer's Co-op factors are present. A court's goal in assessing whether the corporate veil should be pierced is to determine whether a creditor has been damaged by a person who used the corporate form for unjust advantage rather than merely falling victim to the risk associated with dealing with a legitimately formed and operated small business. Only when the creditor can show that a controlling shareholder did business from the start as an undercapitalized shell to do wrong and caused the plaintiff harm will piercing be justified on the basis of the "alter ego" doctrine.

As for disregarding the veil for personal misconduct, the Rayner and Advantage Leasing decisions do not elevate the corporate actors' standard of care or impose duties where none previously existed. They merely clarify and elaborate on the long-standing principle that the veil can be pierced or disregarded to hold a person liable for his or her own misconduct. In other words, one's status as a corporate agent is not a license to abandon personal responsibility and act with impunity.

Increased awareness of the personal liability concept in the corporate context may deter corporate actors from committing misdeeds and thus can benefit a corporation and its officers, shareholders, and employees alike. The obvious lesson for shareholders and officers of small companies is to adequately capitalize the entity at incorporation, maintain corporate formalities, fully disclose the corporate principal's identity in conjunction with all business transactions, and recognize that the "corporate veil" will not insulate shareholders and officers from liability for everything they do.

Endnotes

¹Rayner v. Reeves Custom Builders Inc., 2004 WI App 231, 277 Wis. 2d 535, 691 N.W.2d 705 (review denied).

²Advantage Leasing Corp. v. NovaTech Solutions, No. 03-216 (Wis. Ct. App. March 24, 2005) (unpublished opinion) (review denied).

³Milwaukee Toy Co. v. Industrial Comm'n of Wis., 203 Wis. 493, 495, 234 N.W. 748 (1931).

⁴Id.

⁵Posyniak v. School Sisters of St. Francis, 180 Wis. 2d 619, 636, 511 N.W.2d 300 (Ct. App. 1993).

⁶Consumer's Co-op of Walworth County v. Olsen, 142 Wis. 2d 465, 483, 419 N.W.2d 211 (1988).

⁷Id. at 474 (quoting Barber, Piercing the Corporate Veil, 17 Willamette L. Rev. 371, 371-72 (1981)).

⁸For an insightful discussion of those contexts, see Susan V. Kelley, Personal Liability for Corporate Debt, 67 Wis. Law. 12 (Oct. 1994).

⁹Milwaukee Toy Co. v. Industrial Comm'n of Wis., 203 Wis. 493, 234 N.W. 748 (1931).

¹⁰Id. at 495-96.

¹¹National Soffit & Escutcheons v. Superior Sys., 98 F.3d 262, 265 (7th Cir. 1996).

¹²In re Kaiser, 791 F.2d 73, 75 (7th Cir. 1986).

¹³Cemetery Servs. Inc. v. Wisconsin Dep't of Regulation & Licensing, 221 Wis. 2d 817, 826-27, 586 N.W.2d 191 (Ct. App. 1998).

¹⁴Sprecher v. Weston's Bar Inc., 78 Wis. 2d 26, 253 N.W.2d 493 (1977).

¹⁵Quad/Graphics Inc. v. Fass, 548 F. Supp. 966, 969 (E.D. Wis. 1982), aff'd on other grounds, 724 F.2d 1230 (7th Cir. 1983).

¹⁶Berkey v. Third Avenue Ry. Co., 244 N.Y. 84, 94, 155 N.E. 58 (1926).

¹⁷Consumer's Co-op of Walworth County v. Olsen, 142 Wis. 2d 465, 419 N.W.2d 211 (1988).

¹⁸Id. at 484.

¹⁹Milwaukee Toy, 203 Wis. at 496 (stating "[a]lthough one individual owns all the stock he does not thereby become the corporation").

²⁰Consumer's Co-op, 142 Wis. 2d at 485.

²¹Discovery Tech. v. Avidcare Corp., No. 04-0685, ¶ 18 (Wis. Ct. App. Feb. 15, 2005) (unpublished opinion) (citing United States v. Pisani, 646 F.2d 83, 88 (3rd Cir. 1981)).

²²Consumer's Co-op, 142 Wis. 2d at 485.

²³Id. at 488.

²⁴Id. at 486-87.

²⁵Id. at 487.

²⁶Id. at 482-84.

²⁷Section 180.1835 (entitled "Limited liability") of Wisconsin's statutory close corporation laws provides that "[t]he failure of a statutory close corporation to observe usual corporate formalities or requirements relating to the exercise of its corporate powers or the management of its business and affairs is not grounds for imposing personal liability on the shareholders for obligations of the corporation." See also Wis. Stat. § 183.0405(4) ("[f]ailure of a limited liability company to keep or maintain any of the records or information required under this section shall not be grounds for imposing liability on any person for the debts and obligations of the limited liability company").

²⁸Consumer's Co-op, 142 Wis. 2d at 482-83 (stating "[i]n order for the corporate veil to be pierced, in addition to undercapitalization, additional evidence of failure to follow corporate formalities or other evidence of pervasive control must be shown").

²⁹Id. at 488-89.

³⁰Id. at 496-97.

³¹Id. at 491-94.

³²Id. at 495-96.

³³Id. at 485.

³⁴See, e.g., Stephen M. Bainbridge, Abolishing LLC Veil Piercing, 2005 U. Ill. L. Rev. 77.

³⁵Minnesota has a comparable statute, providing: "The case law that states the conditions and circumstances under which the corporate veil of a corporation may be pierced under Minnesota law also applies to limited liability companies." Minn. Stat. § 332B.303(2) (2003). The Minnesota Court of Appeals relied on this statute to hold that an LLC's veil can be pierced (although it held that the facts in the case did not warrant piercing). Tom Thumb Food Mkts. Inc. v. TLH Props. LLC, No. C9-98-1277, 1999 WL 31168 (Minn. Ct. App. Jan. 26, 1999).

³⁶Rayner v. Reeves Custom Builders Inc., 2004 WI App 231, 277 Wis. 2d 535, 691 N.W.2d 705 (review denied).

³⁷Id. ¶ 1.

³⁸Wis. Admin. Code ch. ATCP 110 (2004). For an overview of the Code, see Mark R. Hinkston, Revisiting Wisconsin's Home Improvement Code, 76 Wis. Law. 12 (Oct. 2003).

³⁹Rayner, 2004 WI App 231, ¶¶ 7-9.

⁴⁰Alberte v. Anew Health Care Serv. Inc., 2000 WI 7, 232 Wis. 2d 587, 605 N.W.2d 515.

⁴¹Rayner, 2004 WI App 231, ¶¶ 10-14.

⁴²Id. ¶ 14.

⁴³Id. ¶ 15.

⁴⁴Id. ¶ 19.

⁴⁵Id. ¶ 20.

⁴⁶Wis. Admin. Code § ATCP 132.01(13).

⁴⁷Wis. Admin. Code § ATCP 109.01(5).

⁴⁸Wis. Admin. Code § ATCP 111.02(5).

⁴⁹Wis. Admin. Code § ATCP 125.01(3).

⁵⁰Wis. Admin. Code § ATCP 113.01.

⁵¹Rayner, 2004 WI App 231, ¶ 15.

⁵²Wis. Stat. § 779.02(5) ("Theft by contractors").

⁵³Capen Wholesale Inc. v. Probst, 180 Wis. 2d 354, 509 N.W.2d 120 (Ct. App. 1993).

⁵⁴See Oxmans' Erwin Meat Co. v. Blacketer, 86 Wis. 2d 683, 692-93, 273 N.W.2d 285 (1979) (citing 3A William Meade Fletcher et al., Fletcher Cyclopedia of the Law of Private Corporations § 1143 and Restatement (Second) of Torts §§ 523, 549).

⁵⁵Wis. Stat. § 180.0622(2)(a) ("Liability of shareholders, transferees and others"); Wis. Stat. § 183.0304(1) ("Liability of members to 3rd parties").

⁵⁶Shannon v. City of Milwaukee, 94 Wis. 2d 364, 369-70, 289 N.W.2d 564 (1980). See also Colton v. Foulkes, 259 Wis. 142, 147-48, 47 N.W.2d 901 (1951) (holding that negligence claims could be asserted against employees who negligently performed construction services).

⁵⁷Advantage Leasing Corp. v. NovaTech Solutions, No. 03-216 (Wis. Ct. App. March 24, 2005) (unpublished opinion).

⁵⁸Benjamin Plumbing Inc. v. Barnes, 162 Wis. 2d 837, 470 N.W.2d 888 (1991).

⁵⁹Id. at 850-51.

⁶⁰Id. at 851.

⁶¹See, e.g., New Horizons Supply Coop. v. Haack, No. 98-1865 (Wis. Ct. App. Jan. 28, 1999) (unpublished opinion).

⁶²Milwaukee Toy, 203 Wis. at 496.

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