Used Scuba Diving Equipment – Flipper Underwater Tours Filed Suit Against Seahunt Equipment Company?

Used Scuba Diving Equipment – And Lloyd Bridges alleging breach of contract, breach of warranty and fraud in connection with the sale of a modified air compressor.

Seahunt is a corporation organized under the laws of Florida and engaged in various aspect of the scuba diving business. Part of its trade includes the sale of air compressors used to fill scuba diving tanks. Flipper is a corporation organized under the laws of Virginia. It operates a dive shop in Cancun, Mexico.

Flipper learned about Seahunt from a nationally distributed magazine, Scuba Times. They telephoned Seahunt to see if they could provide a compressor that could fill 75-100 tanks an hour. Seahunt said that they could and sold Flipper a modified, super fast compressor. It didn’t work as well as advertised, it was much slower. It leaked and overheated. Seahunt could not fix the problem and would not pay Flipper back their money.

At trial it was learned that Lloyd commingled Seahunt’s operating funds with his personal bank accounts. Seahunt operates out of a building owned by Lloyd and his wife and the business pays the mortgage as well as paying rent to the Bridges. Lloyd testified that some years the property is carried on Seahunt’s books as a corporate asset and in other years it is not. A similar arrangement exists with respect to an automobile owned by Lloyd. The corporation does not own the automobile, but it has been carried on Seahunt’s books as a fixed asset. Seahunt makes the car payments.

Can Lloyd and his wife escape personal liability by asserting that the corporation is solely liable? State the reasons for your opinion.

Seahunt is a corporation organized under the laws of Florida and engaged in various aspect of the scuba diving business. Part of its trade includes the sale of air compressors used to fill scuba diving tanks. Flipper is a corporation organized under the laws of Virginia. It operates a dive shop in Cancun, Mexico.

Flipper learned about Seahunt from a nationally distributed magazine, Scuba Times. They telephoned Seahunt to see if they could provide a compressor that could fill 75-100 tanks an hour. Seahunt said that they could and sold Flipper a modified, super fast compressor. It didn’t work as well as advertised, it was much slower. It leaked and overheated. Seahunt could not fix the problem and would not pay Flipper back their money.

At trial it was learned that Lloyd commingled Seahunt’s operating funds with his personal bank accounts. Seahunt operates out of a building owned by Lloyd and his wife and the business pays the mortgage as well as paying rent to the Bridges. Lloyd testified that some years the property is carried on Seahunt’s books as a corporate asset and in other years it is not. A similar arrangement exists with respect to an automobile owned by Lloyd. The corporation does not own the automobile, but it has been carried on Seahunt’s books as a fixed asset. Seahunt makes the car payments.

Can Lloyd and his wife escape personal liability by asserting that the corporation is solely liable? State the reasons for your opinion.