322 Ga. App. 51
Ga. Ct. App.2013Background
- The Association sued Bowen and McGinn on open account to collect unpaid arbitration fees in connection with eCential Group, LLC's arbitration with the Association.
- The trial court dismissed, ruling there was no evidence the Members were personally liable for the fees; the Association sought a new trial, which was denied.
- eCential, a franchisee of iSold It, had arbitration claims against iSold It that proceeded to binding arbitration with the Association; a deposit was requested before work and a hardship claim was filed to delay payment.
- Arbitrator testified that the Members were parties to the arbitration in their personal capacities and that no live hearing occurred; the Members provided no evidence at trial to rebut the burden.
- The Members argued they were not personally liable, claimed no bill was received, and challenged the amount despite a hardship deferment, but did not testify.
- The court held the Members are not automatically liable for LLC debts, but admitted evidence showed they incurred personal liability in the arbitration; the case was reversed and remanded to allocate the portion attributable to the Members.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court erred in dismissing on lack of evidence of personal liability | Association contends evidence showed personal liability. | Members contend no personal liability, no bill received, and disputed amounts. | Reversed; trial court erred and remand for determination of portion attributable. |
Key Cases Cited
- Five Star Steel Constr. v. Klockner Namasco Corp., 240 Ga. App. 736 (1999) (open account prima facie case; authenticated invoice and unpaid balance)
- Imex Intl. v. Wires Engineering, 261 Ga. App. 329 (2003) (prima facie case for complaint on account; burden shifts to defendant)
- Traditional Properties v. Performance Food Group of Ga., 291 Ga. App. 442 (2008) (defendant must offer specific factual evidence to refute proof)
- Winzer v. EHCA Dunwoody, 277 Ga. App. 710 (2006) (LLC members not personally liable for LLC debts absent guarantee)
- Milk v. Total Pay and HR Solutions, 280 Ga. App. 449 (2006) (member not personally liable solely by being a member; need written guarantee)
- Mitsubishi Motors Corp. v. Colemon, 290 Ga. App. 86 (2008) (admissions in judicio binding; arbitrator testimony supporting personal liability)
- Aycock v. Calk, 228 Ga. App. 172 (1997) (pleadings admissions may be binding in later proceedings)
- Holmes v. Clear Channel Outdoor, 298 Ga. App. 178 (2009) (pleadings and motions can effect admissions binding on issues)