New Horizons Supply Cooperative v. Haack

590 N.W.2d 282 (App. 1999)

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Nature of the Case

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Facts

Haack (D) signed an agreement that she would be responsible for payment of all fuel purchased by a predecessor to New Horizons (P). An LLC was shown as the patron on the form agreement, and it was signed by Allison Haack with no designation as whether she signed as an individual or on behalf of the LLC. P testified at trial that two years later that the LLC account was in arrears and Robert Koch was contacted to make good, and he referred P to his sister, D. D then told them she would apply $100 per month on the account. No payment was received, and when they contracted D again, she told them the LLC had been dissolved. D told them again she would begin to make payments and they also found out that she had the assets of the business which included a truck secured by banknote and some receivables which they were trying to collect. Repeated calls over months resulted in no payments. P then sued D. D testified about the LLC but introduced no articles of organization nor any operating agreement into evidence. She did offer registration certificates and claimed that the account was in the business name and she was not liable. All the LLC assets were sold, and she was left with a lot of debt. Eventually, she testified that she had not filed articles of dissolution or notified creditors of the termination when it ceased operations in the fall. The court ruled that D was liable for the debt to P because no articles of dissolution were filed or the creditors notified, and the court had no documents before it to determine the responsibilities of the LLC. From the lack of intention to act like a corporation the court pierced the veil as they were acting like a partnership and being taxed like one. D appealed.