Duray Development, LLC v. Perrin
Michigan Court of Appeals
792 N.W.2d 749 (Mich. Ct. App. 2010)
Duray Development (plaintiff) contracted with Perrin (defendant) for excavation work, then replaced that contract with an identical one naming Perrin's newly formed company, Outlaw Excavating, LLC, as the contracting party instead, with Perrin signing on Outlaw's behalf. Outlaw performed unsatisfactorily and late, and Duray sued; during discovery, Duray learned Outlaw had not officially become a filed LLC until after the second contract was signed. The trial court held Perrin personally liable for damages, reasoning Outlaw wasn't yet a valid LLC when the contract was executed, and Perrin appealed, invoking the de facto corporation and corporation-by-estoppel doctrines to shield him from personal liability.
Whether the de facto corporation and corporation-by-estoppel doctrines, developed under corporate law, are applicable to limited liability companies.