This blog, written by Thomas E. Rutledge, focuses primarily on business entity law in Kentucky. Postings on contract law, contractual and statutory construction, and the entity law of other jurisdictions appear as well. There may as well be some random discussions of classical, medieval and renaissance history.
Tuesday, October 28, 2014
A Company Cannot Be Sued Under Its Real and Assumed Names
Company Cannot Be Sued Under Its Real and Assumed Names
recent decision of the North Carolina business law court, it considered a
complaint in which a party to an agreement was sued under both its real name
and it's assumed name. The defendant alleged this to be improper, asserting
that the entity was subject to suit under only its real name, and that the
additional claims under the assumed name were duplicative. The North Carolina
business law court granted that relief. LA Familia Cosmovision, Inc. v. The Inspiration
Networks, 2014 NCBC 51, 2014 WL 5342583 (Sup. Ct. N.C. Oct. 20, 2014).
case, “The Inspiration Networks” was named as a defendant in the action.Inspirational, Inc., had filed a certificate
of assumed name for “The Inspiration Networks.” The suit named both Inspirational, Inc. and
The Inspiration Networks as defendants; Inspirational, Inc. sought to have the
reference to The Inspiration Networks removed as a defendant.
argue that the use of an assumed name does not create a separate legal entity,
and therefore there remains only one entity that may be sued. Defendants essentially asked this Court to
hold that although one may sue a corporation under it's assumed name, one
cannot maintain an action against both
a corporation and it's assumed name. Slip
op at ¶ 28 (emphasis in original).
Accepting this argument, the North
Carolina business law court held:
to be an issue of first impression in North Carolina. The rule posited by
Defendants is logically sound. For the same reason that it would be nonsensical
to name the same entity or individual twice as a party to an action, a
plaintiff cannot maintain an action against both a legal entity and it's
assumed name. Slip op at ¶ 29.