Hayes v. Lankford
1:17-cv-00091
W.D. Ky.Sep 28, 2017Background
- On August 3, 2015, a secured promissory note was executed obligating Rural Physician Partners, LLC (RPP) to pay plaintiffs Decker ($65,000) and Haynes ($150,000).
- The note was signed by Monty J. Lankford with a signature block indicating his role as President of RPP.
- Plaintiffs sued in Warren Circuit Court alleging breach of the promissory note and named Lankford in both his official and individual capacities; defendants removed to federal court.
- Lankford moved to dismiss claims against him in his individual capacity under Fed. R. Civ. P. 12(b)(6); plaintiffs did not respond to the motion.
- The court considered Kentucky precedent holding that an officer who signs a contract on behalf of a corporation/entity is not personally liable solely because of the signature, absent express agreement to incur personal liability.
- The court granted the motion and dismissed the individual-capacity claim against Lankford with prejudice; claims against RPP and against Lankford in his official capacity may proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Lankford can be held personally liable on the promissory note he signed as RPP President | Plaintiffs allege Lankford executed the promissory note (implying liability) | Lankford signed in representative capacity as President; Kentucky law precludes personal liability from such a signature absent express personal obligation | Court dismissed individual-capacity claim with prejudice — no personal liability where contract shows signature was on behalf of the LLC |
Key Cases Cited
- Pannell v. Shannon, 425 S.W.3d 58 (Ky. 2014) (officer signing for entity is not personally liable solely because of signature)
- Griffin v. Jones, 170 F. Supp. 3d 956 (W.D. Ky. 2016) (applying Pannell to bar individual recovery where documents were signed in representative capacity)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: claims must be plausible on their face)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard requiring facial plausibility)
- Gazette v. City of Pontiac, 41 F.3d 1061 (6th Cir. 1994) (complaint construed in favor of nonmoving party for Rule 12(b)(6) review)