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Sole Proprietorship Companies: The Blurred Lines between Business Entity and Owner (NJ)

September 20, 2018

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Plaintiff Cesar Asijtuj-Jutzuy is a former construction worker and employee of Bossolina Construction, Inc., appealing from a summary judgment dismissal of his personal injury action alleging injuries he sustained when he fell eleven feet from a scaffolding plank.

In <em><a href="http://blog.wcmlaw.com/wp-content/uploads/2018/09/Asijtuj-jutzuy-v.-Werner-Co..pdf">Asijtuj-jutzuy v. Werner Co.</a></em>, plaintiff sued Sikorski Construction, alleging that it was responsible for oversight of the entire project and that it breached its duty to plaintiff by failing to provide a reasonably safe place to work. Although plaintiff also brought product liability claims against the manufacturer, this article will focus on the negligence claims against Sikorski Construction.

The underlying facts pertaining to the accident were undisputed: plaintiff was standing on an aluminum work platform which was positioned at a height of approximately eleven to twelve feet. Plaintiff was in the process of removing stucco with a power grinder, when the grinder suddenly jammed and kicked plaintiff back off the platform causing him to fall and strike his head on the cement pavement below.

There was a dispute whether Sikorski worked on the project as an individual. Sikorski testified that he did not, but the owner of Bossolina Construction testified that Sikorski obtained permits for the project. Further, plaintiff alleged that Sikorski was responsible for running the job and implementing safety measures. Sikorski testified that he had undergone a lumbar fusion the month before plaintiff’s accident and was still recovering during plaintiff’s accident. Sikorski testified that he was unable to participate in the project in any capacity. The trial court had granted summary judgment to Sikorski Construction on the ground that there was no evidence of it having a contract with respect to this project and the lack of evidence that Sikorski was on the project site. In doing so, the trial court noted that Sikorski had not been named as an individual defendant.

The appellate court found that Bossolina did not distinguish between himself as an individual and Bossolina Construction. Sikorski, much in the same way, did not distinguish between himself and his company when providing testimony. For example, when Bossolina testified he subcontracted the job to Sikorski, he did not, individually, have a job to subcontract out.  Thus, when he testified he subcontracted the project to Sikorski, he likely meant Bossolina Construction subcontracted the job, and he may have meant – and a jury could have reasonably inferred – Bossolina Construction subcontracted the project to Sikorski Construction. As such, even if Sikorski himself was not physically at the project site, there was a question as to whether Sikorski Construction had agreements and duties arising from the agreements.

Citing the <em>Burwell v. Hobby Lobby Stores</em> case, in a sole proprietorship, the business and its owner are one and the same. Thus, Sikorski could not avoid liability by using a name for his business when his business was a sole proprietorship. The appellate court held that the trial court should have permitted plaintiff to amend his pleadings to name Sikorski as an individual defendant or in the alternative, should have amended the pleadings itself. The appellate court reversed and remanded the matter for trial, holding that Sikorski and Sikorski Construction were indistinguishable as legal entities. As such, the question of Sikorski’s involvement with the project was a question of fact that should have been determined by the jury.  Thanks to Steve Kim for his contribution to this post.  Please contact Brian Gibbons by <a href="mailto:bgibbons@wcmlaw.com">email</a> or on Twitter (@bgibbons35) with any questions.

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