Sue an LLC in Forfeiture? (TX)

[DBarnesTX]

What is the name of your state (only U.S. law)? Texas

Hi. I’m part of a volunteer-ran HOA in Texas that has had to sue (in Small Claims Court) an Asphalt Paving Company for failure to perform per a contract we entered into last Sept. The company is essentially a sole proprietorship managed by one man, with help from his son(s) and a few employees. The company itself is an LLC.

I know typically we have to sue the corporation, not the person individually, and we filed suit against the LLC in SCC more than a month ago. We received notice, however, that the courts were unable to “serve” the corporation at their registered address. In researching the company again, I noticed, according to the Texas Secretary of State website, that the company’s entity status is now shown as “Forfeited existence”, as of Dec. 3, 2010.

Some quick research indicates that, in Texas, a corporation in forfeiture looses it’s corporate privileges. (One quote – “The forfeiture bars the corp from using the corp name to sue or defend in court and exposes the officers and directors to personal liability.”)

Question: what should we do now?

I’m confident I can “track the individual down” and have him served, but I also want to make sure he’s held personally liable if possible, too. (Which it sounds like he now is, thanks to the forfeiture!) Again, the original suit is against the LLC.

Or should we file a new suit, this time against the individual directly?What is the name of your state (only U.S. law)?

 

[dmcc10880]

File a new suit naming the individual formerly doing business as the LLC and serving at his home address.

 

[Mass_Shyster]

File to dismiss the original suit and file a new suit naming the LLC and the owner.

 

[dmcc10880]

File to dismiss the original suit and file a new suit naming the LLC and the owner.

Why file to dismiss the original suit if the defendant hasn't been served to begin with? If not served, the suit's in limbo.

 

[DBarnesTX]

Thank you both for very timely replies!

So, it would be a good idea to file a new suit against the individual directly! Good, will do.

It's correct that the defendant hasn't been served the original suit. Is there anything I need to do, or will it just die in "limbo"?

Thanks.

 

[dmcc10880]

Thank you both for very timely replies!

So, it would be a good idea to file a new suit against the individual directly! Good, will do.

It's correct that the defendant hasn't been served the original suit. Is there anything I need to do, or will it just die in "limbo"?

Thanks.

If the defendant hasn't been served, there's really no suit and no further action to be taken.

Just make sure your suit is filed against Joe Blow AND Joe Blow formerly doing business as Joe Blow Asphalt LLC.

 

[Mass_Shyster]

It's correct that the defendant hasn't been served the original suit. Is there anything I need to do, or will it just die in "limbo"?

There is a specific timeframe after which the suit will automatically be dismissed if the defendant hasn't been served. While the suit is still active, the defendant can move to dismiss the 'new' suit as it is duplicative of the pending suit.

Dismiss the original suit first.

 

[dmcc10880]

Texas Rules of Civil Procedure... not served, no case. Just file a new complaint.

 

[Mass_Shyster]

DBarnesTX,

The above poster has spent the past few weeks spewing incorrect information, including the advice given above.

Dismiss the first suit before filing the second suit. The defendant could cause a world of hurt if you don't.

 

[John_DFW]

You should do as Steve suggests and dismiss the first suit before filing the second. Failing to do so could end up with both dismissed.

Alternatively, you could file an amended petition in the first suit to add the individual as a second defendent.

In Texas, you can use a process server, but does not sound like that will help in this case.

 

[dmcc10880]

This is really funny.

OP, please read Rule 29 of the Texas Rules of Civil Procedure. You'll find your answer there.

Maintain the original suit, re-serve the individual and add him on to the original suit as a co-defendant personally if you like. However, the work was done (or not) by the LLC. It's that entity that you really have a claim against and if you can hook the former owner in as an individual, you'll be better off.

 

[tranquility]

To:

Texas Rules of Civil Procedure... not served, no case.

and:

OP, please read Rule 29 of the Texas Rules of Civil Procedure.

it was claimed by dmcc10880 that Rule 29 means that because there was no service, there is no suit and the OP can just file another suit without dismissing the one he has now. Let's look:

RULE 29. SUIT ON CLAIM AGAINST DISSOLVED CORPORATION
When no receiver has been appointed for a corporation which has dissolved, suit may be instituted
on any claim against said corporation as though the same had not been dissolved, and service of
process may be obtained on the president, directors, general manager, trustee, assignee, or other
person in charge of the affairs of the corporation at the time it was dissolved, and judgment may be
rendered as though the corporation had not been dissolved.

I'm not seeing what dmcc10880 is claiming.

I do want to warn readers of any posts from any one, being able to look things up on google can make a person seem knowledgeable about a topic. But, in the law, it is usually the combination of multiple facts and laws which determines the result. Only through experience can those things be successfully sifted. A good way to help determine if a person has enough knowledge/experience combination to help, a reader should look at the other threads the poster wrote in and how their thoughts are considered there. Some tend to be respected, some not. There's often a good reason why.

 

[dmcc10880]

No. After looking at Rule 29 of Texas Civil Procedure, the fact that the corporation is dissolved, it doesn't disallow the corporation from being sued and any judgment granted would be as though the corporation was not dissolved.

In other words, in this case, the LLC did or did not do the work contracted for. The LLC is dissolved. That does not preclude the LLC from being sued and a judgment granted against the LLC.

My suggestion to add the individual who controlled the LLC personally in the suit would wrap things up in a neat little package covering all bases of liability.

Better suggestion for the OP. Instead of taking advice from an anonymous internet forum, consult your HOA's attorney and kindly report back with the advice. Some people may learn something.