LLC v. John P. Lulinski, Appellee-Plaintiff (2025)

MEMORANDUM DECISION

[1] Joseph J. Miller (“Miller”) and Precision Fabricating, LLC (“Precision”) appeal the Elkhart Circuit Court's judgments against each of them on John P. Lulinski's complaint alleging their negligence in constructing a scaffold that failed and resulted in injuries to Lulinski. Precision ¹ presents three dispositive issues for our review, which we consolidate and restate as:

1. Whether the trial court erred when it denied Miller's Trial Rule 50 motion for a directed verdict.

2. Whether the trial court abused its discretion when it admitted certain testimony.

[2] We affirm in part, reverse in part, and remand with instructions.

Facts and Procedural History

[3] On August 2, 2016, Lulinski was standing on a scaffold in the course of his employment with Forest River, Inc., an RV manufacturer, when a guard rail failed. As a result, Lulinski fell from a height of approximately eight feet and sustained serious injuries, including multiple fractures to both feet. Precision had designed and manufactured the scaffold before selling it to Forest River. At all times relevant to this appeal, Miller and his wife were the principal owners and operators of Precision, a limited liability company. Soon after the accident, Miller repaired the failed part of the scaffold.

[4] Richard Snell, a former welder, investigated the accident and prepared a report for OSHA.² Snell concluded that a guard rail that had been attached to a “crosswalk” section of the scaffold had failed due to both a “lack of weld” and “not enough weld” where the guard rail was supposed to attach. Tr. Vol. 2, p. 143. Snell explained in part that the failed weld did not have “enough penetration to permanently bond the metal together.” Id. at 144.

[5] In November, Lulinski filed an amended complaint against Precision and Miller alleging negligence in the design and manufacture of the scaffold.³ The ensuing jury trial was not held until June 2024. At trial, Precision objected to Snell's testimony, arguing that he was not qualified to give an opinion on the cause of the scaffold failure. The trial court overruled that objection. Also at trial, Lulinski argued that both Precision and Miller were liable for his injuries. But Lulinski did not make any argument to show that Miller was not entitled to the protections of a limited liability company. At the close of Lulinski's case, Miller argued that he was entitled to a directed verdict under the Indiana Business Flexibility Act, Indiana Code section 23-18-3-3, because, while the LLC might be liable to Lulinski, Miller was not personally liable. The trial court denied that motion.

[6] The jury entered judgment against both Precision and Miller and awarded Lulinski $1.25 million. The jury found that Precision was 90% at fault and Miller was 10% at fault. This appeal ensued.

Discussion and Decision

Issue One: Miller's Liability

[7] Miller first asserts that the trial court erred when it denied his motion for judgment on the evidence regarding his alleged individual liability. Indiana Trial Rule 50(A) provides that, “[w]here all or some of the issues in a case tried before a jury ․ are not supported by sufficient evidence ․ , the court shall withdraw such issues from the jury and enter judgment thereon. ․” A motion for judgment on the evidence challenges the legal sufficiency of the evidence. Kelly v. Levandoski, 825 N.E.2d 850, 861 (Ind. Ct. App. 2005), trans. denied. The trial court should enter judgment only if there is no substantial evidence or reasonable inference to be drawn therefrom to support an essential element of the non-movant's claim. Town of Highland v. Zerkel, 659 N.E.2d 1113, 1120 (Ind. Ct. App. 1995), trans. denied.

[8] Miller contends that the evidence shows that he acted only through the LLC and not personally. As this Court has explained,

[t]he purpose of a limited liability company is to provide individuals the same protection enjoyed by shareholders of a corporation through creation of a distinct legal entity, while at the same time featuring pass-through taxation similar to that enjoyed by partners. Five Star Concrete, L.L.C. v. Klink, Inc., 693 N.E.2d 583, 586 (Ind. Ct. App. 1998). The Indiana Business Flexibility Act controls the creation and operation of limited liability companies in Indiana. Brant v. Krilich, 835 N.E.2d 582, 592 (Ind. Ct. App. 2005). In terms of personal liability, the Indiana Business Flexibility Act states:

A member, a manager, an agent, or an employee of a limited liability company is not personally liable for the debts, obligations, or liabilities of the limited liability company, whether arising in contract, tort, or otherwise, or for the acts or omissions of any other member, manager, agent, or employee of the limited liability company. A member, a manager, an agent, or an employee of a limited liability company may be personally liable for the person's own acts or omissions.

Ind. Code § 23-18-3-3(a). Thus, individuals associated with a limited liability company are not personally liable merely because of their ownership in the entity, while at the same time, association with a limited liability company does not preclude liability for one's own actions or omissions.[ ]

Because the Indiana Business Flexibility Act provides protections to limited liability companies like those of corporations, to circumvent those protections we apply an analysis similar to that for determining the personal liability of a corporation's officers. Brant, 835 N.E.2d at 590․

In Aronson v. Price, 644 N.E.2d 864, 868 (Ind. 1994), our supreme court explained that proper adherence to corporate formalities is a factor in determining whether a plaintiff has met its burden of proof in seeking to impose personal liability on a shareholder for acts of the corporation. “Lack of observance of formalities can provide circumstantial evidence of shareholder abuse and shareholder use of the corporation as a conduit for personal affairs.” Id. To meet its burden, the plaintiff may also present evidence showing:

(1) undercapitalization; (2) absence of corporate records; (3) fraudulent representation by corporate shareholders or directors; (4) use of the corporation to promote fraud, injustice, or illegal activities; (5) payment by the corporation of individual obligations; (6) commingling of assets and affairs; ․ or (8) other shareholder acts or conduct ignoring, controlling, or manipulating the corporate form.

Brant, 835 N.E.2d at 590. Thus, in deciding whether to pierce the corporate veil or circumvent the protections of a limited liability corporation, “[a] court engages in a highly fact-sensitive inquiry.” Id.

Troutwine Ests. Dev. Co., LLC v. Comsub Design & Eng'g, Inc., 854 N.E.2d 890, 898-900 (Ind. Ct. App. 2006) (emphasis added), trans. denied.

[9] Thus, here, it was Lulinski's burden to prove that Miller was personally liable for Lulinski's injuries. But Lulinski made no attempt to argue either a lack of “proper adherence to corporate formalities” or any of the Brant factors. See id. Instead, in opposition to Miller's Trial Rule 50 motion, Lulinski argued:

Judgment on the evidence is proper[ ] only when there's a total absence of evidence in favor of the nonmoving party. That's not the case. The evidence in this case shows that Mr. Miller participated in the design, installation, and super -- supervised the manufacturer of the scaffold involved in this case. This is no different than if he was driving somewhere on behalf of the company and negligently caused an accident. He would be liable, right along with the company. That's the case that's presented here because there is evidence and inferences to be drawn from the evidence which could implicate him personally as a person who participated in creating this defective scaffold that caused Mr. Lulinski's injuries.

Tr. Vol. 3, pp. 48-49. Lulinski's argument misses the point.⁴ Miller's participation in the design, manufacture, and sale of the scaffold, without more, does not implicate his personal liability. Indeed, there was no evidence that, at the time the scaffold was purchased, anyone at Forest River believed that the company was dealing with Miller personally and not Miller in his capacity as a member of the LLC.

[10] In his closing argument, Lulinski merely stated that both Precision and Miller were liable “because Joe Miller's primary responsibility was to protect the safety of his company's customers, and he failed to meet that obligation. ․ [A]nd he was personally involved all away -- along the way.” Tr. Vol. 3, p. 73. Lulinski then referred to a jury instruction that would address the issue of liability, but he does not direct us to that instruction on appeal. Lulinski repeated his argument that Miller was responsible for supervising his employees who actually did the welding on the scaffold, as well as inspecting the scaffold, but Lulinski did not explain how those acts or omissions implicated his personal liability rather than the LLC's.

[11] In any event, as Miller points out, the undisputed evidence shows that Forest River hired Precision to design and manufacture the scaffold. Indeed, in his amended complaint, Lulinski alleged that Precision had designed, manufactured, and installed the scaffold, with Miller involved as supervisor of Precision employees.⁵ Miller testified that, when he signed the contract with Forest River, he signed on behalf of the LLC, not as an individual. See Tr. Vol. 3, p. 57. Miller clarified on cross-examination that Precision's contract with Forest River was oral, not written.

[12] Still, on appeal, Lulinski argues that

Miller is on the hook for his share of the fault jurors apportioned to him for the same reasons[ set out in Williams v. Younginer, 851 N.E.2d 351 (Ind. Ct. App. 2006), trans. denied]. Unlike the homebuilder in Williams, Miller had no written contract. Without one, jurors were free to infer that he'd personally contracted with Forest River to build the custom scaffolds. And jurors could reasonably infer that if the scaffolds he'd contracted to build were deficient, he was on the hook.

Appellee's Br. at 26-27. Lulinski is incorrect. His reliance on Williams is entirely misplaced,⁶ and there is simply no evidence to support a reasonable inference that Miller had “personally contracted with Forest River[.]” Id. at 26.

[13] In sum, Lulinski did not prove that Miller was personally liable for his injuries. Therefore, the trial court clearly erred when it denied Miller's Trial Rule 50 motion and concluded that Miller could be found to be personally liable to Lulinski.⁷

[14] Accordingly, we reverse the judgment against Miller. Because the jury found Precision 90% at fault, and because Miller's actions and omissions were within the scope of his work as a member of the LLC, the 10% fault assigned to Miller shall be reassigned to Precision. For these reasons, we remand with instructions to amend the judgment to find Precision 100% at fault, and liable for the entire $1.25 million award.⁸

Issue Two: Evidentiary Rulings

[15] Precision also challenges two evidentiary rulings by the trial court: allowing Snell to testify regarding the cause of the scaffold failure and allowing testimony regarding Miller's post-accident repairs made to the scaffold. A trial court has broad discretion regarding the admission of evidence, and its decisions are reviewed only for abuse of discretion. Hall v. State, 177 N.E.3d 1183, 1193 (Ind. 2021). We will reverse only if the trial court's ruling was clearly against the logic and effect of the facts and circumstances before it and the errors affect a party's substantial rights. Id. We address each of Precision's contentions in turn.

Snell's Testimony

[16] Precision contends that Snell was not qualified to testify regarding the cause of the scaffold failure. Precision argues that “[w]elding is highly technical, as is evaluating why a weld might break, and opining over whether a weld failed requires significant expertise.” Appellants’ Br. at 20. Precision argues that, because Snell was not qualified as an expert, the trial court abused its discretion when it allowed his testimony. In support, Precision states that “[o]pining on welds is typically a Rule 702 expert task,” and Precision cites a string of cases that “discuss welding experts in the Rule 702 context.” Id. (emphasis added). But in none of those cases did an Indiana court hold that an expert witness is required where faulty welding is at issue. Indeed, in Northern Indiana Public Service Company v. Otis, 145 Ind. App. 159, 199, 250 N.E.2d 378, 404 (1969), we merely noted that “[w]elding is certainly an art or science which may be the subject of expert testimony.” (Emphasis added). Precision has not shown an abuse of discretion on this issue.

[17] Precision acknowledges that the trial court “apparently ․ determined Mr. Snell was a skilled witness” under Evidence Rule 701. Id. at 21. As this Court has explained,

Indiana Evidence Rule 701 encompasses what this court has termed “skilled witness” testimony:

[T]he testimony of an observer, skilled in an art or possessing knowledge beyond the ken of the average juror may be nothing more than a report of what the witness observed, and therefore, admissible as lay testimony. This type of evidence is not a matter of scientific principles governed by Evid. R. 702(b); rather, it is a matter of the observations of persons with specialized knowledge.

Such witnesses possessing specialized knowledge are often called skilled witnesses or skilled lay observers. A skilled witness is a person with a degree of knowledge short of that sufficient to be declared an expert under Ind. Evid. R. 702, but somewhat beyond that possessed by the ordinary jurors. Skilled witnesses not only can testify about their observations, they can also testify to opinions or inferences that are based solely on facts within their own personal knowledge.

Linton v. Davis, 887 N.E.2d 960, 975 (Ind. Ct. App. 2008) (citations and quotation marks omitted), trans. denied. “Under Indiana Evidence Rule 701, a skilled witness may provide an opinion or inference that is ‘(a) rationally based on the perception of the witness and (b) helpful to a clear understanding of the witness's testimony or the determination of a fact in issue.’ ” Kubsch v. State, 784 N.E.2d 905, 922 (Ind. 2003) (quoting Ind. Evidence Rule 701).

Ostrowski v. Everest Healthcare Indiana, Inc., 956 N.E.2d 1144, 1150 (Ind. Ct. App. 2011). Here, Snell testified that he had worked as a welder for three to five years during the 1970s. And Snell was able to explain how to achieve a proper weld. Snell's experience with welding, then, exceeded that of the average juror.

[18] On appeal, Precision does not argue that Snell was not a skilled witness. Rather, Precision merely argues that Snell's testimony “goes far beyond his mere observations, and his testimony was highly prejudicial.” Appellants’ Br. at 22. We disagree.

[19] The evidence showed that there were “three welds that joined the guardrail to the crosswalk.” Tr. Vol. 2, p. 142. As part of his investigation, Snell interviewed witnesses and took photographs of the failed scaffold. Snell testified that the guard rail that had been attached to the crosswalk section of the scaffold had failed due to both a “lack of weld” and “not enough weld” in areas where it had been welded. Id. at 143. Snell explained that the weld that had failed did not have “enough penetration to permanently bond the metal together.” Id. at 144.

[20] We hold that Snell's testimony was rationally based on Snell's perception and helpful to a clear understanding of the cause of the scaffold failure. See Ostrowski, 956 N.E.2d at 1150. Indeed, Miller's own testimony corroborated Snell's testimony on this issue. The trial court did not abuse its discretion when it allowed Snell's testimony as a skilled witness.

Post-accident Repairs

[21] Finally, Precision contends that the trial court abused its discretion when it allowed evidence that Precision had made repairs to the scaffold after Lulinski's accident. Evidence Rule 407 provides in relevant part that, when measures are taken that would have made an earlier injury or harm less likely to occur, evidence of the subsequent measures is not admissible to prove negligence, culpable conduct, a defect in a product or its design, or a need for a warning or instruction. Here, over Precision's objection, Snell testified that, post-accident, Miller “agreed to weld gussets to the crosswalk guardrails, ․ creating a stronger bond” between adjoining pieces of metal. Tr. Vol. 2, p. 145.

[22] In overruling Precision's objection, the trial court found that Precision had opened the door to the testimony “on cross-examination of another witness.” Id. Otherwise inadmissible evidence may be admitted where the defendant opens the door to questioning on that evidence. Clark v. State, 915 N.E.2d 126, 130 (Ind. 2009). The door may be opened when the trier of fact has been left with a false or misleading impression of the facts. Id.

[23] As Lulinski points out on appeal, in its cross-examination of Steve Aspy, an operations manager for Forest River who testified immediately before Snell, Precision engaged in the following colloquy:

Q Do you know what happened to the scaffolding after the accident, in terms --

A I know it was -- I know it was repaired.

Q But did you continue [to] use them?

A Correct.

Q So you used the exact same design on other units. But this one, you just repaired it, and that was all you did.

A Mr. Miller repaired it.

Q Okay. And you continued to use it.

A And it's continued to be used today.

* * *

Q You say Mr. Miller repaired the scaffold that broke?

A Yes.

Q Did he do any work on the other three scaffolds that Forest River had purchased from him and his company?

A I know they were inspected. I -- I -- I'm not positive on what he -- what -- or what he did, you know, because it's -- I'm not sure.

Q Okay.

A I know -- I know the one was repaired.

Id. at 124-25.

[24] Precision argues that Aspy “simply volunteered” the post-accident repair evidence and, therefore, Precision cannot be found to have opened the door to Snell's testimony.⁹ Reply Br. at 15. But Precision ignores the excerpted testimony above where it repeatedly referenced post-accident repairs to the scaffold. Precision could have moved to strike Aspy's answers but did not do so. Moreover, Precision asked Aspy whether repairs had been made to other scaffolds Forest River had purchased from Precision; but Aspy was unable to answer that question.

[25] Precision clearly “opened the door” to the testimony it now challenges and Lulinski was entitled to elicit testimony from Snell regarding post-accident repairs made to all four scaffolds to explain how Forest River was able to continue to use the scaffolds. See Clark, 915 N.E.2d at 130. The trial court did not abuse its discretion when it allowed Snell to testify regarding the post-accident repairs to the scaffolds.

Conclusion

[26] The trial court erred when it denied Miller's Trial Rule 50 motion at trial because Lulinski did not present sufficient evidence to prove that Miller could be held personally liable for his injuries. The pleadings and undisputed evidence show that Miller's actions and omissions were within the scope of his work as a member of the LLC. Accordingly, we reverse the judgment against Miller and remand to the trial court with instructions to amend the judgment to find Precision 100% at fault and liable for the full $1.25 million judgment. In addition, the trial court did not abuse its discretion when it allowed Snell to testify as a skilled witness and when it allowed Snell's testimony regarding post-accident repairs to the scaffolds.

[27] Affirmed in part, reversed in part, and remanded with instructions.

FOOTNOTES

1.   Miller and Precision have filed one brief on appeal. However, the first issue only pertains to Miller. For ease of discussion, we will sometimes refer to both appellants, collectively, as “Precision.”

2.   The record is unclear whether Forest River hired Snell or whether OSHA directed him to conduct the investigation.

3.   In his initial complaint, Lulinski named only Precision as a defendant.

4.   We are confused by Lulinski's belief that if Miller were driving a car on behalf of the LLC he would be personally liable. Without any evidence showing personal liability, such as the Brant factors, there is no support for that argument in the law.

5.   Neither party has included the amended complaint in their appendices. However, that pleading is a part of the record on appeal and available to this Court through the Odyssey case management system. See Ind. Appellate Rule 27.

6.   In Williams, plaintiffs sued Jerry Williams, individually, and Jerry Williams Builder, Inc., for breach of implied warranty of fitness for habitation, breach of implied warranty of workmanship, breach of contract, negligence, fraud, and constructive fraud related to the sale of a home. 851 N.E.2d at 355. Williams had signed the parties’ contract “in his personal capacity,” and there was other evidence to support his personal liability. Id. at 356. At trial, the trial court denied the defendants’ Trial Rule 50 motion and found that Williams was personally liable to the plaintiffs. Id. at 359. Distinct from the plaintiffs in Williams, again, here, Lulinski did not present evidence on any of the Brant factors to circumvent the protections of Miller's LLC.

7.   Because we reverse the trial court on this issue, we need not address Miller's argument under the Product Liability Act.

8.   Fault apportionment under the Indiana Comparative Fault Act is uniquely a question of fact to be decided by the jury. Hampton v. Moistner, 654 N.E.2d 1191, 1195 (Ind. Ct. App. 1995). However, the apportionment of fault may become a question of law for the court when there is no dispute in the evidence and the factfinder is able to come to only one logical conclusion. Id.

9.   We note that Precision omitted the issue of opening the door in its initial brief and first addressed it in its reply brief.

Mathias, Judge.

Judges Foley and Felix concur. Foley, J., and Felix, J., concur.