Bank of America, N.A. v. Barr
2010 ME 124
| Me. | 2010Background
- Barr was the sole owner of The Stone Scone, a sole proprietorship, in 2004.
- Fleet Bank approved a $100,000 unsecured small business line of credit for The Stone Scone on January 7, 2004, with Barr personally signing a guaranty.
- Fleet Bank sent a welcome/approval letter to Barr and The Stone Scone on January 12, 2004; BoA later merged Fleet Bank in 2004.
- From 2004 to 2008, BoA sent monthly statements to Barr and The Stone Scone showing advances, payments, interest, and fees.
- Two years after approval, The Stone Scone registered as an LLC, Barr as manager, and BoA was not notified of this corporate status change.
- The last payment on the line of credit was October 28, 2008 (reversed that day); a November 4, 2008 past-due notice was sent; no further payments were made.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of business records | Barr challenges Exhibits 2–4 as not properly authenticated. | Barr argues witness was not a custodian/qualified witness and records lack foundation. | Exhibits admitted; witness qualified; proper foundation shown under Rule 803(6). |
| Sufficiency of evidence of a contract and terms | BoA proved a contract existed with definite terms via letters and records. | Barr contends evidence does not establish contract existence or terms. | Record supports existence of a binding contract and definable terms. |
| Barr's personal liability for the line of credit | Barr personally liable as sole proprietor who procured the line of credit. | Barr argues liability should not extend personally due to corporate conversion. | Barr personally liable; sole proprietorship liability transfers to the individual, notwithstanding later LLC conversion. |
| Effect of LLC conversion on liability | Liability remains with Barr for pre-conversion debts. | Conversion to LLC could limit personal liability. | Personal liability preserved for pre-conversion debts; conversion does not negate individual liability. |
Key Cases Cited
- Nelson v. State, 2010 ME 40 (Me. 2010) (admissibility standard for business records)
- Capul v. Fleet Bank of Me., 1997 ME 140 (Me. 1997) (foundation elements for admissibility of business records)
- United Air Lines, Inc. v. Hewins Travel Consultants, Inc., 622 A.2d 1163 (Me. 1993) (trustworthiness and method for computer-stored records)
- N-Star Capital Acquisition, LLC v. Victor, 2009 ME 129 (Me. 2009) (sufficiency of evidence when not decided on summary judgment)
- Ladd v. Scudder Kemper Invs., Inc., 433 Mass. 240 (Mass. 2001) (personal liability of sole proprietor)
- Recalde v. ITT Hartford, 492 S.E.2d 435 (Va. 1997) (personal liability of sole proprietor in form of business)
- C & J Builders & Remodelers, LLC v. Geisenheimer, 249 Conn. 415 (Conn. 1999) (pre-conversion debts and personal liability)
- Sullivan v. Porter, 2004 ME 134 (Me. 2004) (contract formation and mutual assent clarity)