Duray Development, LLC v. Perrin
Michigan Court of Appeals
792 N.W.2d 749 (Mich. Ct. App. 2010)
On September 30, 2004, Duray Development, LLC (Duray) (plaintiff) entered into a contract with Perrin (defendant), under which Perrin would excavate certain property that Duray owned. Subsequently, on October 27, 2004, Duray entered into a second contract that contained the same language and provisions as the Perrin contract and was meant to supersede that first contract. The second contract, however, was with Outlaw Excavating, LLC (Outlaw), and Perrin was not a party to the contract. Perrin, who had recently formed Outlaw and was Outlaw’s owner, signed the second contract on Outlaw’s behalf. Outlaw did not perform under the contract satisfactorily or timely, so Duray brought suit. During discovery, Duray learned for the first time that Outlaw did not officially become a “filed” limited liability company (LLC) until November 29, 2004, after the parties signed the second contract. The trial court ruled in favor of Duray on the merits and ruled that Perrin personally owed damages to Duray, because Outlaw was not an LLC at the time the parties executed the contract. Perrin appealed, arguing that he was not personally liable because of the de facto corporation and corporation by estoppel doctrines.
Rule of Law
Holding and Reasoning (Per Curiam)
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