Pannell v. Shannon

425 S.W.3d 58 (2014)

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Pannell v. Shannon

Kentucky Supreme Court
425 S.W.3d 58 (2014)

  • Written by Rose VanHofwegen, JD

Facts

Ann Shannon (defendant) organized limited-liability company (LLC) Elegant Interiors, LLC, as its sole member in 2000. In 2004, Elegant Interiors leased space from Rick Pannell (defendant). The next year, the Kentucky secretary of state administratively dissolved Elegant Interiors. In 2006, Shannon and Pannell negotiated a new lease for a smaller space using a copy of the old lease and writing in new terms. The lease still named Elegant Interiors as tenant, and Shannon signed after “by” without filling in her title. Pannell sued Shannon for breach on July 21, 2006, after not receiving rent payments for two months. Shortly afterward, Shannon reinstated the LLC. On August 11, 2006, the secretary of state issued a certificate of existence for Elegant Interiors that canceled the certificate of dissolution effective the date it had issued. Shannon requested summary judgment, arguing she could not be personally liable for the lease because Elegant Interiors was the tenant and Kentucky law shielded LLC members from personal liability. Pannell countered Shannon could not act for the LLC when it did not exist.

Rule of Law

Issue

Holding and Reasoning (Noble, J.)

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