P.I.M.L., Inc. v. Chain Link Graphix, LLC

P.I.M.L., Inc. (PIML) (plaintiff) entered into a contract with a business to be called Fashion Links before the business’s incorporation. PIML allegedly had not received payment of commissions owed to it under the contract for two separate accounts, Maurice’s and Target. Accordingly, PIML filed a lawsuit against Edwin Davidson, Christopher Hilburn, and John McKelvey (the business associates), as well as Hilburn’s company, Chain Link Graphix, LLC 1 (Chain Link) (defendants). The trial court dismissed PIML’s claims against Chain Link but proceeded with a trial regarding whether the business associates should be held personally liable under theories of preincorporation-promoter liability or joint-venture liability for the purported breach of the contract. At trial, the evidence suggested that before Fashion Links was incorporated, the business associates had business cards designed by Davidson that reflected each person’s name and title in a company called Fashion Links. The business associates apparently referred to themselves as partners of Fashion Links, and Hilburn testified that he signed a document on behalf of Fashion Links and as a “partner.” The business associates had sent emails discussing business strategies for the Maurice’s and Target accounts, both internally and to others. Additional testimony suggested that the business associates attended a meeting with PIML on behalf of Fashion Links before the business’s incorporation. Further, evidence indicated that McKelvey and Davidson received payments from Fashion Links’ dealings and that Hilburn profited when he liquidated Chain Link. The jury found that the business associates were preincorporation promoters of a business to be called Fashion Links, that the business associates engaged in a joint venture called Fashion Links, that at least one of the business associates entered into the contract on Fashion Links’ behalf, and that the contract was breached. The business associates moved for judgment as a matter of law on the grounds that the evidence did not support the jury’s findings.