Strategic practitioners do not need to treat entity liability as the finish line; they may treat it as a starting point. Holding individual owners or officers personally liable—whether as partners, corporate actors, alter egos, or signatories—fundamentally alters the litigation landscape.
In the February 19, 2026 edition of The Legal Intelligencer, Edward Kang and Kandis Kovalsky co-authored, “Taking a Plaintiff’s Case to the Next Level: Holding Individuals Liable Under Pennsylvania Law.”
For plaintiffs counsel, winning a verdict against a corporate entity is often only the opening act. The real contest begins post-judgment, when the defendant reveals itself to be a shell: a defunct LLC, a dissolved partnership, or a corporation with nominal assets. The plaintiff, having prevailed on liability, is left holding a judgment that is legally pristine but could be practically worthless.
This outcome is avoidable. Strategic practitioners do not need to treat entity liability as the finish line; they may treat it as a starting point. Holding individual owners or officers personally liable—whether as partners, corporate actors, alter egos, or signatories—fundamentally alters the litigation landscape. It expands the pool of recoverable assets, concentrates the minds of defense counsel, and aligns the case with the core purpose of civil liability: meaningful accountability against wrongdoers.
Why Individual Liability Matters
The pursuit of individual liability is not a secondary consideration; it is a force multiplier for three distinct reasons.
First, individual exposure changes behavior. A corporate entity, insulated by limited liability and defense counsel, often litigates with strategic detachment. An individual whose personal assets, reputation, and future earnings are at risk does not. Cases involving individual defendants often settle differently—earlier, at higher values, and with fewer procedural hurdles. Personal risk concentrates attention in ways that corporate liability rarely does.
Second, the assets often reside with the individuals. Commercial general liability policies carry limits and exclusions. Directors and officers (D&O) policies, by contrast, frequently provide broader coverage that follows the individual, not the entity. A dissolved corporation cannot respond to a judgment; a former officer with a D&O tail policy can. General partners remain personally liable for partnership obligations—a fact often forfeited when plaintiffs name only the partnership in the complaint.
Third, accountability is the product. The Department of Justice’s 2015 Yates Memo recognized that corporate enforcement is incomplete when it stops at the entity level. Civil plaintiffs experience this reality firsthand. A family suing a nursing home chain is not made whole by a judgment against a corporate shell. They seek accountability from the individuals who made the decisions that caused the harm. That impulse is not merely human—it is legally and strategically sound.
Direct Liability Under Pennsylvania Statutes
It is well known that general partners are jointly liable for the debts of a partnership. This most straightforward path to individual liability is often statutory—and frequently overlooked at the pleading stage. Under the Pennsylvania Uniform Partnership Act, a judgment against a partnership is not, by itself, a judgment against any individual partner. See 15 Pa.C.S. Section 8437. Pennsylvania Rule of Civil Procedure 2132 reinforces this principle: a judgment entered against a partnership sued only in its firm name supports execution only against partnership property. To reach a partner’s individual assets, the partner must be named and served in the lawsuit.
The same logic applies to limited partnerships, under 15 Pa.C.S. Section 8645. General partners are jointly and severally liable for partnership obligations, but only if they are properly joined. A judgment against the limited partnership alone does not reach them. This is not a substantive limitation on liability; it is a pleading requirement. Plaintiffs who fail to name individual partners at the outset may forfeit the ability to collect from them entirely.
The lesson is elementary: name the partners when warranted. The cost of doing so is negligible; the cost of failing to do so can be fatal to recovery.
Participation Theory: Liability Through Conduct
Beyond statutory partnership liability, Pennsylvania recognizes a common-law doctrine that imposes individual liability on corporate officers and directors based on their personal involvement in tortious conduct. This is the participation theory, articulated most clearly in the Pennsylvania Supreme Court case Wicks v. Milzoco Builders, 470 A.2d 86 (Pa. 1983). Under Wicks, a corporate officer is individually liable for torts committed in the course of employment if the officer personally participated in the wrongful conduct or directed it to occur. See our earlier article on this topic, here.
Participation theory is not veil-piercing. It does not require proof of fraud, undercapitalization, or disregard of corporate formalities. It does not attack the corporate structure. Instead, it reflects a bedrock principle: individuals remain liable for their own torts, even when acting on behalf of a corporation.
But the doctrine has limits. Alleging that a defendant held a corporate title or signed a document is insufficient. Plaintiffs must plead specific facts demonstrating personal involvement: directing the conduct, approving the scheme, making the misrepresentation, or physically engaging in the wrongful act. Courts are skeptical of boilerplate allegations of “participation.” Overreaching invites dismissal and damages credibility.
Participation theory applies only to individuals, not affiliated entities. To reach parent companies or sister corporations, plaintiffs must turn to other doctrines, such as alter ego or enterprise liability.
Contractual Liability: The Signatory Problem
In contract cases, the path to individual liability is narrower and more nuanced. The general rule is familiar: an agent who signs a contract on behalf of a disclosed principal is not personally liable on that contract (unless the agent specifically agrees to assume liability). See Vernon D. Cox & Co. v. Giles, 406 A.2d 1107, 1110 (Pa. Super. 1979). But the exceptions are where cases are won or lost.
One common exception arises from ambiguity. If a contract does not clearly indicate the signatory’s representative capacity, parol evidence may be admissible to determine whether the parties intended individual liability. See Trenton Trust v. Klausman, 296 A.2d 275, 277 (Pa. Super. 1972). Ambiguous signature blocks, inconsistent use of letterhead, or vague agency language can expose individuals to personal liability. See Hazer v. Zabala, 26 A.3d 1166, 1170 (Pa. Super. 2011).
Another fertile theory is misrepresentation of authority. An agent who warrants they have authority to bind a principal—but does not—may be personally liable for breach of warranty of authority. See Kribbs v. Jackson, 129 A.2d 490, 496 (Pa. 1957) Similarly, an individual who makes material misrepresentations to induce a contract may face tort liability for fraudulent inducement, even if the contract itself binds only the entity. See Felix v. Fraternal Order of Police, Philadelphia Lodge No. 5, 759 A.2d 34, 39 (Pa. Commw. Ct. 2000).
These theories should be explored early. Discovery into the signatory’s knowledge, the entity’s financial condition at the time of contracting, and the parties’ communications can reveal evidence of individual intent and responsibility. In the right case, contractual individual liability is not ancillary; it is central.
Alter Ego and Piercing the Corporate Veil
The most demanding—and most powerful—path to individual liability is veil piercing. Pennsylvania law requires a showing that the corporation was a mere alter ego or business conduit of the individual and that respecting the corporate form would sanction fraud, illegality, or fundamental unfairness. Put simply, veil-piercing is most viable when someone uses a corporate form to perpetrate fraud.
Unlike participation theory, veil piercing attacks the corporate structure itself. It can also extend beyond individuals to affiliated entities under enterprise liability theories. In Mortimer v. McCool, 255 A.3d 261 (Pa. 2021), the Pennsylvania Supreme Court recognized the viability of enterprise liability while declining to apply it on the facts. More recently, in Dewberry Group v. Dewberry Engineers, 604 U.S. 321 (2025), the U.S. Supreme Court reaffirmed the presumption of corporate separateness but left room for traditional veil piercing and equitable adjustments where corporate forms obscure economic reality. See our latest article on this topic, here.
These decisions offer both caution and opportunity. Courts will not disregard corporate form lightly, but they remain receptive to well-supported claims involving commingling, asset shifting, undercapitalization, and artificial inter-company transactions. Discovery into inter-company transfers, pricing practices, and the use of shell entities can provide the factual foundation necessary to overcome the presumption of separateness.
As a practical matter, veil piercing should rarely be pled in an initial complaint. The necessary facts are almost never available pre-discovery, and premature allegations risk early dismissal under Pennsylvania’s fact-pleading standards, and potentially, a loss of credibility with the court. A more effective strategy is to plead viable individual claims under participation theory and statutory liability, then develop the evidentiary record to support alter ego claims as the case progresses.
Choosing the Right Theory
Each individual liability doctrine serves a distinct function, and understanding their interplay is critical to effective case management.
- Partnership liability is mandatory, not discretionary. Name the partners.
- Participation theory is the primary tool for holding officers and managers accountable for their own tortious conduct.
- Contractual liability theories apply where ambiguity, misrepresentation, or extra-contractual conduct creates individual exposure.
- Veil piercing and enterprise liability are reserved for cases involving manipulation of corporate form to evade responsibility or to perpetuate fraud.
Used together, these doctrines transform litigation strategy. They expand the defendant pool, increase settlement leverage, and protect plaintiffs from the all-too-common scenario of winning on liability but losing on collectability.
Conclusion
The shift from entity liability to individual accountability is not merely tactical; it reflects the economic realities of modern commerce. Corporate entities can be created, dissolved, and restructured with ease. Individuals endure. They hold assets, carry insurance and bear responsibility for their conduct. On many occasions, individuals are the wrongdoers.
Plaintiffs who treat the corporate defendant as the endpoint of litigation will continue to obtain judgments against shell companies and wonder why their clients remain uncompensated. Plaintiffs who integrate individual liability into their strategy from the outset—by naming partners, pleading participation, scrutinizing contractual authority, and preserving alter ego theories—are likely to recover more. They will fulfill the fundamental promise of civil law: that wrongdoing leads to meaningful accountability, not empty judgments.
Edward T. Kang is the managing member of Kang Haggerty. He devotes the majority of his practice to business litigation and other litigation involving business entities. Contact him at ekang@kanghaggerty.com.
Kandis L. Kovalsky, a member with the firm, focuses her practice on a broad range of high stakes business-related civil litigation in Pennsylvania, New Jersey, and New York state and federal courts and arbitral tribunals, and representing relators in high stakes qui tam actions filed under the federal and state False Claims Acts. Contact her at kkovalsky@kanghaggerty.com.
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