Duray Development LLC v. Perrin

792 N.W.2d 749 (2010)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

Duray (P) entered into a contract with D and others. P and D later entered into a new contract, intended to supersede the original contract. The new contract was between P and Outlaw only. Outlaw was an excavation company that D had recently formed. D signed the new contract on behalf of Outlaw and held himself out to P as the owners and persons in charge of the company. Once signed, all parties proceeded under the contract as if Outlaw were the contractor. The parties entered into the first contract and then entered into the second contract once the parties thought Outlaw was a valid limited liability company. P eventually sued D for breach of contract. P later learned through discovery that Outlaw did not obtain a 'filed' status as a limited liability company at the time the parties executed the second contract. According to the Limited Liability Company Act, MCL 450.4101 et seq., a limited liability company does not exist until the state administrator endorses the articles of organization with the word 'filed.' The trial court ruled against D for $96,367.68 in damages. D appealed; Outlaw was liable to P under the de facto corporation doctrine.