Scenario II - Organizations and Liability
Vance Armstrong was the sole incorporator of Triathlon Training Inc., a corporation designed to operate a training center for triathletes of all ages. The business was incorporated according to Florida law in January 2015, with Armstrong as the sole director and shareholder. Armstrong contributed $20,000 of starting capital, which was just enough to make minor repairs to the property he purchased for $400,000 with a loan from the bank. The corporation had no liability insurance. On June 15, 2015, the center opened for business. Over the next few months, the corporation operated with a profit.
In July, Armstrong took a two-week vacation in France and used a check written on the company bank account to purchase his airline ticket. In September, Armstrong decided to have the pool resurfaced. Because business had slowed and the corporation's bank account did not have sufficient funds, Armstrong wrote a personal check to cover the work. Armstrong feared he would not make enough money through the winter to turn a profit, so he decided to work a part-time job selling fitness equipment as an independent contractor for Bowflex. Armstrong used the training center's office phone to make calls, the copy machine for copies, and the computer for searches. He made a substantial profit, which was maintained in a third bank account not associated with Triathlon Training or his personal account.
On April 1, 2016, a child with a mild learning disability drowned in the pool while training for the local children’s triathlon. The parents brought a suit for wrongful death against Triathlon Training Inc. and against Armstrong in his individual capacity as owner. At the time of the suit, the corporation had less than $2,500 in its bank account. Because of these limited funds, the child's parents hoped to recover most of their damages directly from Armstrong, who lived in a mansion on the beach.
Will the parents be successful in holding Triathlon Training Inc. liable for the child's death?
What should the parents argue in order to hold Vance Armstrong liable in his individual capacity? Will the parents prevail? Why or why not?
How could Armstrong have protected himself against this type of potential liability?