Opinion ID: 1590950
Heading Depth: 1
Heading Rank: 6

Heading: livingston's personal liability on contract

Text: Most of the issues involved in this appeal arise from the question of whether Livingston can be held personally liable for breach of the April 30, 1996, contract. Accordingly, we will address this issue first. The appellants argue that Livingston's actions fall under Neb.Rev.Stat. § 21-2020 (Reissue 1997), which states that [a]ll persons purporting to act as or on behalf of a corporation, knowing there was no incorporation under the Business Corporation Act, shall be jointly and severally liable for all liabilities created while so acting. Their argument is based upon the fact that the contract at issue was signed by Livingston as the president of Castle Brook. However, Livingston testified at trial that Castle Brook was never incorporated in Nebraska. Livingston argues that he intended to enter into the contract as the president of Castle Development, not Castle Brook. At trial, he testified that at the time he signed the contract, he was unaware that the name of the entity was incorrect on the document. The district court found that Livingston did not intend to enter into the contract in a personal capacity. In support of its finding, the court noted that there was a place for each person signing the contract to list their title within the corporation they were representing. In the court's opinion, this indicated that each of the signors was acting as an officer of their respective corporations and not personally. Also, the court noted that Livingston testified that he signed the contract as president of Castle Development. Further, Dean Jenson, the president of both Par 3 and Cornhusker, testified that he believed he was dealing with a corporation when he entered into the contract. We conclude the district court's finding that Livingston did not sign the contract in his personal capacity is not clearly wrong. The issue then becomes whether Livingston signed the contract on behalf of Castle Brook or Castle Development. Jenson's testimony on this subject is somewhat contradictory. He admitted he believed that the contract was entered into by a corporation, but he also stated he was unaware that Livingston was working for a corporation which was in existence at the time the contract was executed. On the other hand, Livingston presented evidence which demonstrates that the appellants were aware they were entering into a contract with Castle Development, an existing corporation. The initial meetings giving rise to the contract at issue involved Jenson, Livingston, and the other shareholder of Castle Development. In addition, shortly after the contract was signed, Cornhusker issued a $25,000 check made payable to Livingston. The check was part of the overall deal associated with the contract. Before accepting the check, Livingston had Jenson add the words Castle Dev. to his name on the check. This check was deposited into a bank account held by Castle Development. Also, months before the contract was signed, Jenson requested a letter of recommendation from Livingston. In response, Livingston wrote a letter, dated December 13, 1995, which was prepared on Castle Development letterhead. The opening line of the letter stated: We at Castle Development.... The letter was signed Dan Livingston, President. A suit for damages arising from breach of a contract presents an action at law. Anderson Excavating v. SID No. 177, 265 Neb. 61, 654 N.W.2d 376 (2002). In a bench trial of a law action, the trial court's factual findings have the effect of a jury verdict and will not be disturbed on appeal unless clearly wrong. Id. The district court concluded that Livingston intended to and did sign the contract as president of Castle Development, and not in his personal capacity. Further, it found that there was no evidence presented which would show that the parties who entered into the contract did so with the intention of incurring personal liability. Based upon the evidence adduced at trial, we cannot state that these findings were clearly wrong. Since the court was not clearly wrong in finding that Livingston was contracting as an agent for a corporation that was in existence when the contract was executed, § 21-2020 is not applicable to the case at bar. For these reasons, we find the appellants' first assignment of error to lack merit.