GEORGE BARRIE, APPELLANT,
v.
JEROME BUCHSBAUM, INDIVIDUALLY, AND AS TRUSTEE FOR CARVED GLASS, INC., AN INVOLUNTARILY DISSOLVED FLORIDA CORPORATION, APPELLEES
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George Barrie sued Jerome Buchsbaum and his dissolved corporation Carved Glass, Inc. for breach of contract after Buchsbaum allegedly made oral agreements on behalf of the corporation after it had been involuntarily dissolved. The trial court dismissed Buchsbaum individually, but the appellate court reversed, holding that corporate officers may be personally liable for actions taken on behalf of a dissolved corporation if they knew or should have known of the dissolution.
A corporate officer who assumes to act on behalf of a dissolved corporation is personally liable for the corporation's debts and liabilities if the officer knew or, because of their position, should have known of the dissolution. Buchsbaum, as president and sole director, should have known of the involuntary dissolution, making him subject to personal liability despite his claimed lack of actual knowledge.
[1] A corporate officer who knows or should know of a corporate dissolution and continues to act on behalf of the corporation during the dissolution period may be held person…
[2] A corporate officer's personal liability for debts incurred during a period of involuntary dissolution is not extinguished by the subsequent reinstatement of the corporat…
Previewing 2 of 5 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“All persons who assume to act as a corporation without authority to do so shall be jointly and severally liable for all debts and liabilities incurred or arising as a result thereof.”
Establishes the statutory basis for personal liability of officers acting on behalf of a dissolved corporation.
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Join FLexlaw to unlock all legal intelligenceJerome Buchsbaum was president and sole director of Carved Glass, Inc. The corporation was involuntarily dissolved by the Secretary of State on Novemb…
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PER CURIAM.
George Barrie appeals the trial court’s entry of an order dismissing Jerome Buchsbaum from Barrie’s lawsuit to recover damages for an alleged breach of contract by Carved Glass, Inc. We reverse.
Jerome Buchsbaum is the president and sole director of Carved Glass, Inc. On November 16,1987, Carved Glass, Inc., was involuntarily dissolved by the Secretary of State. While the corporation was dissolved, Buchsbaum, on behalf of the corporation, allegedly entered into two oral agreements with George Barrie for installation of glass block furnishings in Barrie’s home. Barrie paid a substantial deposit for the work, but it was never performed. Barrie sued Carved Glass, Inc., and Buchsbaum individually for damages predicated on' breach of contract. Buchsbaum sought dismissal on the ground that the alleged agreements were between Barrie and Carved Glass, Inc. He maintained that he was unaware that Carved Glass had been involuntarily dissolved. The trial court granted Buchsbaum’s motion.
For purposes of a motion to dismiss for failure to state a cause of action, “allegations of the complaint are assumed to be true and all reasonable inferences are allowed in favor of the plaintiffs’ case.” Orlando Sports Stadium, Inc. v. State ex rel. Powell, 262 So. 2d 881, 883 (Fla.1972). Barrie’s complaint alleges that Buchsbaum transacted business as Carved Glass, Inc., after the corporation had been involuntarily dissolved; thus, he maintains, Buchsb-aum was personally liable for the corporation’s alleged breach of contract. In his motion to dismiss, Buchsbaum states that he did not know that the corporation had been involuntarily dissolved when he allegedly contracted with Barrie, and therefore, he incurs no personal liability.
The mere statement that he lacked actual knowledge of the involuntary dissolution is insufficient to relieve Buchsbaum of personal liability. Section 607.397, Florida Statutes (1987), provides: “[a]ll persons who assume to act as a corporation without authority to do so shall be jointly and severally liable for all debts and liabilities incurred or arising as a result thereof.” Section 607.271(5), Florida Statutes (1987), states that reinstatement of a corporation after involuntary dissolution “shall have no effect upon any personal liability of the directors, officers, or agents of the corporation on account of actions taken during the period between dissolution and reinstatement.” Courts have interpreted these statutes to mean that individuals may be liable for actions taken on behalf of a dissolved corporation if they “knew or, because of their position, should have known of the dissolution.” Mobil Oil Corp. v. Thoss, 385 So. 2d 726, 727 (Fla. 5th DCA 1980); accord Walsh v. Promenade at Inverrary, 528 So. 2d 1379 (Fla. 4th DCA 1988); Anderson v. Hillsborough Sheet Metal, Inc., 513 So. 2d 1359 (Fla. 2d DCA 1987); see also Harry Rich Corp. v. Feinberg, 518 So. 2d 377 (Fla. 3d DCA 1987); but see Futch v. Southern Stores, Inc., 380 So. 2d 444 (Fla. 1st DCA 1979). Buchsbaum was president and sole officer of Carved Glass, Inc.; in that position, he should have known of his corporation’s dissolution.1 Thus, Buchsbaum is subject to personal liability for the corporation’s breach of contract. We reverse the trial court’s order dismissing Buchsbaum from the case.
Reversed and remanded.
. Buchsbaum, as president and sole director of Carved Glass, Inc., should have received the ninety day pre-dissolution notice, § 607.271(3), Fla.Stat. (1987), as well as the certificate of involuntary dissolution, § 607.271(4), Fla.Stat. (1987), required to be sent to the corporation by the Secretary of State.
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R.W. Smith & Co. OF Fla., Inc. v. R. Wilbur Smith & Co., Inc., 833 So. 2d 806 (Fla. 3d DCA 2002)…Inc. appeals an order denying its motion to tax costs against Antonio Elortegui, the president and sole shareholder of R.W. Smith & Co. of Florida. We reverse on authority of subsection 607.1421(4), Florida Statutes (2001), and Barrie v. Buchsbaum, 547 So. 2d 1009 (Fla. 3d DCA 1989). Affirmed in part, reversed in part, and remanded for further proceedings consistent herewith.…
Authorities Cited
- Orlando Sports Stadium, Inc. v. The State of Fla. ex rel. Rom W. Powell, 262 So. 2d 881 (Fla. 1972)
- Mobil OIL Corp. v. Thoss, 385 So. 2d 726 (Fla. 5th DCA 1980)
- Anderson v. Hillsborough Sheet Metal, Inc., 513 So. 2d 1359 (Fla. 2d DCA 1987)
- Harry Rich Corp. v. Ira Feinberg, 518 So. 2d 377 (Fla. 3d DCA 1987)
- Silas Gibson v. Ratcliff, 380 So. 2d 444 (Fla. 1st DCA 1979)
- Zeph Futch v. S. Stores, Inc., 380 So. 2d 444 (Fla. 1st DCA 1979)
- Walsh v. The Promenade AT Inverrary, 528 So. 2d 1379 (Fla. 4th DCA 1988)