280 P.3d 360
Okla. Civ. App.2012Background
- Winningham signed advertising contracts with AT&T Advertising when AVA allegedly was not a legal entity.
- AVA was cancelled by the Secretary of State on July 1, 2007; later AVA, P.C. claimed conversion from AVA to a professional corporation in 2009.
- AVA/LLC had no existence at the time contracts were signed, so liability shield may not apply.
- AT&T sought summary judgment asserting personal liability of Winningham under Oklahoma LLC Act § 2055.2(I).
- Trial court granted summary judgment for AT&T; Winningham appealed, arguing reinstatement could shield liability.
- Court held that once cancelled, an LLC ceases to exist and cannot shield liability; AVA’s later conversion did not retroactively shield Winningham.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether cancellation of AVA shields members from liability | Winningham's shield remains post-cancellation | AV A cancellation ends liability shield; no shield | The shield does not apply; Winningham liable |
| Whether AVA’s later reincorporation/conversion affects liability | Reinstatement/conversion may create shield dating back | No retroactive effect; liability back to when entity ceased to exist | No retroactive shield; liability remains with Winningham |
Key Cases Cited
- In re Midpoint Development, 466 F.3d 1201 (10th Cir. 2006) (LLC ceases to exist when cancelled)
- Chadwick Farms Owners Ass'n v. FHC LLC, Pro. 207 P.3d 1251 (Wash. 2009) (no existence after cancellation; liability shield issue)
- Bethlehem Steel Corp. v. Giese, 681 P.2d 769 (Okla. 1984) (officers liable for debts incurred during suspension)
- Brown v. Alliance Real Estate Group, 976 P.2d 1043 (Okla. 1999) (summary judgment standard; favorable to movant when no genuine issues)
- Vance v. Fed. Natl. Mortg. Assn., 988 P.2d 1275 (Okla. 1999) (scope of summary judgment review; light most favorable to non-movant)