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Harms v. City of Sibley11/24/2004
strict court held Sandbulte liable for nuisance in conjunction with Joe's "as one party defendant," without making a particular finding as to the reason for holding Sandbulte personally liable. On appeal to this court Sandbulte contends he should not be held personally liable and plaintiffs contend that he should be held personally liable, yet neither party has provided authority to support their legal conclusions.
There appear to be four possible theories for holding Sandbulte personally liable for nuisance: (1) the ready-mix plant that Sandbulte owns is a nuisance per se, (2) Sandbulte himself engaged in conduct that was a nuisance, (3) Sandbulte is vicariously liable for Joe's activities-through a piercing of the corporate veil theory, or (4) Sandbulte is vicariously liable for Joe's activities as landowner-lessor.
Nuisance per se. Our courts have recognized a nuisance per se to be "a structure or activity that is a nuisance at all times and under any circumstances, regardless of location or surroundings." Bader v. Iowa Metro. Sewer Co., 178 N.W.2d 305, 306-07 (Iowa 1970). The mere of existence of a ready-mix plant is not a nuisance per se. When such a plant is not in operation it would not constitute a nuisance.
Individual conduct. Sandbulte's individual conduct does not appear to have caused a nuisance. As an individual, Sandbulte purchased the land, plant and silo and obtained building permits. This conduct, as a matter of law, does not rise to the level of a nuisance since it cannot be said to have unreasonably interfered with plaintiffs' comfortable enjoyment of their property.
Piercing the corporate veil. In general, "a shareholder of a corporation is not personally liable for the acts or debts of the corporation." Iowa Code § 490.622(2). However, in some instances the corporate entity may be disregarded and the shareholders may be held personally liable. The burden is on the party seeking to pierce the corporate veil to show the exceptional circumstances required. In re Marriage of Ballstaedt, 606 N.W.2d 345, 349 (Iowa 2000). Factors that would support such a finding include (1) the corporation is undercapitalized, (2) it lacks separate books, (3) its finances are not kept separate from individual finances, or individual obligations are paid by the corporation, (4) the corporation is used to promote fraud or illegality, (5) corporate formalities are not followed, and (6) the corporation is a mere sham. Id. There is no evidence before us to support piercing the corporate veil to find Sandbulte, as a shareholder in Joe's, personally liable for the actions of Joe's.
Landowner/lessor liability. Finally, we must examine whether Sandbulte can be held personally liable as a lessor of land for the activities carried out by his tenant. The Restatement (Second) of Torts provides for imposing liability on landlords for damages caused by a tenant-created nuisance in certain situations:
(1) A lessor of land is subject to liability for a nuisance caused by an activity carried on upon the land while the lease continues and the lessor continues as owner, if the lessor would be liable if he had carried on the activity himself, and
(a) at the time of the lease the lessor consents to the activity or knows or has reason to know that it will be carried on, and
(b) he then knows or should know that it will necessarily involve or is already causing the nuisance.
Restatement (Second) of Torts § 837, at 152 (1990); see also 58 Am.Jur.2d, Nuisances §§ 113-124, at 643-50 (1989) (landlord can be liable for a nuisance created by tenant if he has knowledge of the condition or authorizes its creation).
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