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Brock Farms, Inc. v. Marrazzo

A-2887-08T1 (N.J. Super. App. Div. 2010) (Unpublished)

CORPORATIONS; SHAREHOLDERS; PERSONAL LIABILITY — When a contract states that one party is an individual trading as a company, but there is no sign that the company is a corporation, and no subsequent documents delivered to the other party indicate that the company is a corporation, the individual trading as such a company may be personally liable for the debts incurred in connection with the contract.

Trees and landscaping material were sold to an individual “t/a *** Landscaping Co.” When payment was not made, the seller sued the individual and the so-called corporation.

On a motion for summary judgment, the lower court held that the individual was personally liable for the amount owed to the seller. It noted that the purchaser admitted that the corporation purchased the materials from the seller but contended that the purchaser was merely an employee of the corporation acting on its behalf. The Court found that the purchaser failed to allege or present any evidence that the company was a corporation or show the individual’s relationship to the business and his dealings with the seller other than a self-serving certification by his counsel that the company was a corporation. The individual appealed.

On appeal, the Appellate Division affirmed, holding that the lower court did not err when it found, on summary judgment, the seller was entitled to summary judgment against the individual “t/a **** Landscaping Co.” and that it was not improper to find that the individual was synonymous with the landscaping company. It declared that the individual never stated that the business was a corporate entity and he provided no evidence to that effect, such as a certificate of incorporation or a copy of the cancelled check made on account of the purchase which was presumably drawn on the corporate account. It noted that the individual presented no certification that the company was a corporation or about his relationship to the business even though the burden was on the individual to respond by affidavits setting forth specific facts showing there was a genuine issue for trial. It believed the individual’s submission to be “woefully inadequate.” The Court also noted that the seller’s principal certified about an ongoing relationship in which the individual purchased the trees and other landscaping material on credit. Thus, it held, as a matter of law, the seller presented a sufficient basis for judgment in its collection action against the individual named defendant.

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