Property Law

Paul F. Sherman

An individual who signs a contract on behalf of a company having an unregistered fictitious name may be personally liable if he is shown to be doing business on the company’s behalf.   Stemmler v. Goffstein, No. 98893 (Mo. App. E.D., April 16, 2013), Clayton III, J.

Stemmler contracted to sell property at 7831 Lafon, University City (“the Property”) to “Belle Meade Dev. Co. LLC”, signed by “Belle Meade Dev. Co. LLC by Fred Goffstein, member” in October 2000.   The earnest money came by check signed by Goffstein bearing the name “Belle Meade Development Co.”   However, Belle Meade Dev. Co. LLC was an unregistered fictitious name.    The contract included a provision that if the Property “is torn down between November 30, 2001 and November 30, 2003, purchaser agrees to give Seller additional $5,000.00.”   Stemmler apparently transferred title to Overbrook Development LLC (“Overbrook”), who then deeded the Property to R J York Development, LLC (“York”).  York tore the building down within the time frame.  Stemmler sued Goffstein personally for the $5,000.00.  Goffstein moved for summary judgment alleging that he did not contract with Stemmler in his individual capacity, having signed the contract as a member of Belle Meade Dev. Co. LLC. Stemmer asserted he had never done business as Belle Meade Development Co. LLC. Goffstein asserted that if the property was torn down it was done so by York.  The trial court granted Goffstein summary judgment on his motion without specifying the reason and this appeal followed.

Can a contract entered into under an unregistered fictitious name be enforceable against the individual doing business on its behalf?  Yes.  Whether Goffstein conducted business as the unregistered fictitious name “Belle Meade Dev. Co. LLC” or not presents a fact issue that precludes summary judgment.  If the purchaser was Overbrook or Belle Meade Dev. Co., both registered fictitious names, then Goffstein could avoid individual liability.  Once the purchaser is identified then that person or entity owes Stemmler $5,000. 

Held: Judgment reversed and remanded for factual determination.