Indiana Court Holds Contractor Liable for Fraud
An appeals court ruled that a contractor cannot hide behind his LLC to avoid personal liability for fraudulent conduct.
Updated on Oct. 28, 2026 in Financial Crime
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The Indiana Court of Appeals reversed a lower court decision, ruling that a contractor is personally liable for an $82,020 judgment involving fraudulent practices. The court found that corporate protections do not shield individuals who directly participate in wrongful conduct against their clients.
Why it matters
This ruling clarifies that LLC members remain personally accountable for fraud they commit while performing work, preventing them from using corporate entities as a shield for illicit business practices. It underscores that homeowners can seek personal redress when contractors intentionally misrepresent their services.
The Indiana Court of Appeals issued a memorandum decision in Robert Burgner, et al. v. Jeremy Swenson, et al. on October 26, 2026. The court reversed a prior trial court ruling, finding the contractor personally liable for the $82,020.08 judgment.
The players
Indiana Court of Appeals
This is an intermediate appellate court that reviews decisions from trial courts throughout the state of Indiana.
SwenCrest, LLC
This is a construction company where the contractor involved in the case was the sole member.
The details
The contractor for SwenCrest, LLC failed to supply manufactured roof trusses as promised, instead attempting to build them in his backyard without necessary building permits from the Town of Veedersburg. The court determined personal liability was warranted because the contractor directly accepted payments, failed to buy materials, and misled the clients.
Timeline
April 2022: Contract signed and initial $9,000 payment made.
July 2022: Additional $6,000 payment made and order cancellation discovered.
September 2022: Contractor took possession of a 2005 Ford F-350 as payment.
July 2025: Trial court awarded initial damages against the company.
October 26, 2026: Appeals court ruled contractor personally liable.
Legal Context
The court's decision applies the piercing the corporate veil legal doctrine to hold the owner accountable for his personal misconduct. The ruling follows the legal pattern of piercing the corporate veil by rejecting the notion that corporate status provides absolute immunity for individual fraud.
Homeowners in the area should ensure all construction work is permitted through local authorities like the Town of Veedersburg to verify contractor legitimacy. This decision serves as a reminder to confirm that materials are being ordered through verified suppliers as specified in signed contracts.
The takeaway
When entering into construction agreements, ensure all terms are clearly defined and that permits are filed with local town offices. Clients should remain vigilant for signs of fraudulent misrepresentation, such as a failure to supply materials that were explicitly promised in a contract.
Further reading
For more information on legal standards regarding corporate liability, visit the Financial Crime section.
Source note: This article includes information reported by The Times of India.
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