Opinion ID: 2395909
Heading Depth: 1
Heading Rank: 2

Heading: assignment of corporate contract

Text: [¶ 8] Sturtevant argues that the corporation assigned its assets including the snowplowing contract to him, and because of that assignment he has standing as an individual to claim breach of contract by the Town, even though the snowplowing contract was between the Town and M.E.S. Environmental Services, Inc. He submitted to the trial court an affidavit signed by him dated September 15, 1997, which states that all corporate assets and liabilities were distributed to him personally. He further states in the affidavit that as the sole shareholder, president, liquidating trustee and sole distributee of the assets, he authorizes and ratifies his actions in seeking damages for the Town's breach of contract. [¶ 9] The trial court found that Sturtevant's evidence of assignment was insufficient and that as a factual matter the purported assignment never occurred. We review the factual finding by the clearly erroneous standard: [T]he trial judge's findings stand unless they clearly cannot be correct because there is no competent evidence to support them. Harmon v. Emerson, 425 A.2d 978, 982 (Me.1981). [T]he function of an appellate court is not to review a cold transcript and draw its own factual inferences; rather, appellate review of factual findings is limited to investigation of the record before it to determine whether competent evidence exists to support the lower tribunal's factual conclusions. Lewisohn v. State, 433 A.2d 351, 354 (Me.1981). [¶ 10] Sturtevant, as the plaintiff, had the burden of proof on the issue of assignment. See Britton v. Co-op Banking Group, 4 F.3d 742, 746 (9th Cir.1993); Alpine Assocs., Inc. v. KP & R, Inc., 802 P.2d 1119, 1121 (Colo.Ct.App.1991). He had to demonstrate to the trial court, to whom he and the Town entrusted the task of fact finding, by a preponderance of the evidence, that M.E.S. Environmental Services, Inc., assigned the snowplow contract to himself as an individual. [¶ 11] For an assignment to be enforceable there must be an act or manifestation by the assignor indicating the intent to transfer the right to the assignee. See Doughty v. Sullivan, 661 A.2d 1112, 1124 (Me.1995); see also RESTATEMENT (SECOND) OF CONTRACTS § 324 (1981). In this case there was no evidence of a manifestation of the corporate intent to transfer the contract rights at the time the corporation was in existence, and the trial court was not compelled to find that an assignment had occurred. [4] No corporate records were presented to show that an assignment had taken place while the corporation was in existence. [¶ 12] The dissenting opinion concludes that the trial court was compelled to find the existence of an assignment because of the dissolution of the corporation and because of Sturtevant's conduct in continuing to plow for the Town after the dissolution. Simply because a corporation is dissolved and the shareholder represents, in the boilerplate language of the articles of dissolution form, that the corporate assets have been distributed to the shareholder does not necessarily mean that a contract to which the corporation was a party has been assigned to the shareholder. As the trial court noted, Maine's dissolution statutes treat contracts differently from assets. The corporation is required to fulfill or discharge its contracts, while assets are distributed to the shareholders once provision has been made for all obligations. 13-A M.R.S.A. § 1106(3), (4). Because contracts are not necessarily the same as assets, the form language in the articles of dissolution, that all assets have been distributed, does not mean that all contracts have been assigned. Furthermore, the trial court could have concluded that the representation by Sturtevant in the articles of dissolution was for the mere purpose of completing the form or that it was not credible. [5] At no time did Sturtevant testify that, in his capacity as president and sole shareholder of the corporation, he had assigned the snow removal contract to himself, nor did he testify that, in his individual capacity, he had accepted an assignment of the snow removal contract from the corporation. The court could have found that the notion of assignment first occurred to Sturtevant after the litigation began and his status as a party became an issue, which was long after the corporation ceased to exist. [¶ 13] The fact that Sturtevant continued to plow for the Town for two years after the corporation was dissolved did not compel a finding of an assignment. That fact says nothing about the intent of the corporation to assign the contract. The court could have believed that Sturtevant simply continued to plow for the Town after dissolution in the same manner that he had plowed for the Town before incorporation. Sturtevant, either through one of his corporations or individually, had been plowing for the Town for a number of years. The court could have considered that Sturtevant did not seem to be concerned whether he was acting in a corporate capacity or as an individual. [6] [¶ 14] In short, there was no evidence presented by Sturtevant from which the fact-finder was compelled to find that the corporation assigned the contract to its sole shareholder. The evidence taken as a whole supports a finding that the contract was not assigned. The trial court did not clearly err in finding no assignment.