Moneywatch Cos. v. Wilbers

In 1992, Jeffrey Wilbers (defendant) negotiated a commercial lease with Moneywatch Companies (plaintiff). Wilbers told Moneywatch’s property manager, Rebecca Reed, that Wilbers intended to create a corporation and needed the commercial space for his eventual golfing business. At Moneywatch’s request, Wilbers submitted a personal financial statement with the lease application. Reed allegedly told Wilbers that Wilbers would remain personally liable on the lease even if he later formed a corporation. In December of 1992, the parties entered a lease agreement, signed by Wilbers, naming Moneywatch as landlord and “Jeff Wilbers, dba Golfing Adventures” as the tenant. Wilbers subsequently incorporated J&J Adventures, Inc., which used the trade name Golfing Adventures. Wilbers notified Moneywatch of the incorporation, and Moneywatch changed the name of the tenant on the lease to “J&J Adventures, Inc., dba Golfing Adventures,” but a new lease was not signed. During the lease period, rent was paid with checks that contained the corporation’s name and the address of the leased property. However, Moneywatch addressed all correspondence to Wilbers personally and mailed the correspondence to Wilbers’s home. In 1993, the corporation defaulted, and Moneywatch sued Wilbers in his personal capacity for breaching the lease agreement. The trial court ultimately entered judgment in Moneywatch’s favor, and Wilbers appealed, arguing that substituting the corporate party as the tenant on the lease effectuated a novation that relieved Wilbers of personal liability. Wilbers also argued that he was not personally liable because he had signed the lease as a promoter on behalf of the future corporation.