Sunday, November 24, 2013

New Horizons Supply Cooperative v. Haack case brief

New Horizons Supply Cooperative v. Haack case brief summary
590 N.W.2d 282 (Wis. App. 1999)


CASE SYNOPSIS
Defendant businesswoman appealed from the small claims judgment of the Grant County Circuit Court (Wisconsin) that was entered in favor of plaintiff creditor in an action to recover past-due amounts on a gasoline credit card issued to defendant's limited liability company, which was subsequently dissolved, rejecting her defense that she could not be held personally liable under Wis. Stat. § 183.0304.

CASE FACTS
Defendant businesswoman and her brother properly formed a limited liability company. Subsequently, she signed an application for a gasoline credit card issued to the company by plaintiff creditor. Plaintiff contacted the company when its account was past due, and defendant said she would start making payments. When plaintiff inquired again when no payment was received, defendant informed it that the company had been dissolved. Plaintiff sued on the debt, and judgment was entered against defendant personally, with the trial court treating her company as a partnership. The court rejected her defense that she could not be held personally liable, pursuant to Wis. Stat. § 183.0304. Defendant appealed.

DISCUSSION

  • In affirming, the court ruled that judgment for plaintiff was proper, even though treating the company as a partnership was error. 
  • When the company dissolved, defendant failed to take the appropriate steps that were required by Wis. Stat. § 183.0905 et seq. to shield herself from any personal liability for the company's debts. 
  • Also, plaintiff's claim did not appear to exceed the value of any liquidation distribution defendant might have received from dissolution of the company.

CONCLUSION
The judgment for plaintiff was affirmed because defendant failed to establish she took appropriate steps to shield herself from any personal liability for the company's debts after its dissolution and distribution of assets and she did not establish that the amount of plaintiff's claim exceeded the value of any liquidation distribution she might have received from the dissolved company.


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