right to sue: Surviving Liability of Dissolved LLCs: Part 4
- 09/04/08 10:22 AM
Regardless of the method or date of dissolution and cancellation of an LLC, individual members remain personally liable for actions that constitute grounds to pierce the corporate veil. In other words, termination of the LLC generally does not affect – either positively or negatively – the personal liability of its members.
However, Washington Law does limit somewhat the personal liability of members conducting a proper winding-up. RCW 25.15.300 provides that, where an LLC has been properly wound-up and cancelled pursuant to that statute, including providing for all of the LLC’s known liabilities, the members of the LLC cannot … (1 comments)
right to sue: Surviving Liability of Dissolved LLCs: Part 3
- 08/11/08 11:10 AM
A member-dissolved LLC is different, as the court in Emily Laneobserved. There, the the members dissolved the LLC, wound it up, and ten days after dissolution the members cancelled the LLC. It was not until eight months after the dissolution that the HOA filed suit. The court of appeals held that the rule in Chadwick and Maplecourtcontrolled, and the LLC could be sued for three years but it could not assert claims against subcontractors.The lack of standing to sue in Emily Lane arises out of similar statues as the liability in the Chadwick and Maplecourt decisions with only minor variations. Where an LLC is dissolved by its members, the members then … (0 comments)
right to sue: Surviving Liability of Dissolved LLCs: Part 2
- 08/01/08 05:58 AM
In Washington, where an LLC is administratively dissolved by the Secretary of State, the LLC is provided with a period of two years in which it may apply to be reinstated. RCW 25.15.290. If no application for reinstatement is filed within those two years, the Secretary of State “shall” cancel the certificate of formation. Id. Once the certificate of formation is cancelled, an LLC is no longer a separate legal entity. RCW 25.15.070. Thus, according to the recent Division I decisions, an LLC does not have standing to bring claims after it has been cancelled, two years after dissolution. Nevertheless, it can … (0 comments)
right to sue: Surviving Liability of Dissolved LLCs
- 07/25/08 11:51 AM
In 2007, Division 1 of the Washington Court of Appeals decided three cases that may have significant ramifications regarding the continuing liability of single-project LLCs. These cases are: (1) Chadwick Farms Owners Ass’n v. FHC, LLC, 139 Wn. App. 300, 160 P.3d 1061 (2007); (2) Maple Court Seattle Condo. Ass’n v. Roosevelt, LLC, 139 Wn. App. 257, 160 P.3d 1068 (2007); (3) Emily Lane Homeowners Ass’n v. Colonial Dev., L.L.C., 139 Wn. App. 315, 160 P.3d 1073 (2007). These cases hold that a dissolved and cancelled developer-LLC has no standing to sue its contractors, but that due to recent revisions in … (0 comments)
right to sue: Agents: Many Washington State Builders Miss Out On New Protections From Construction Defect Claims
- 07/09/07 05:11 AM
Many Washington State builders, particularly in the single-family home market, are failing to take advantage of recent changes to Washington law regarding construction defect claims. Specifically, these builders are failing to include in their purchase and sale agreements a notice to homebuyers that may prevent that homebuyer from commencing a construction defect lawsuit until after the homebuyer has complied with several statutory notice requirements that aim to provide the builder with an opportunity to cure the alleged defects. RCW 64.50, the Construction Defect Claims Act, became effective in 2002 at the instance of the construction industry. The law aims … (4 comments)
right to sue: Supreme Court Rules That Condominium Homeowner’s Association Cannot Sue Developer More Than Two Years After Developer’s Dissolution
- 12/08/06 09:30 AM
The Supreme Court recently ruled in Ballard Square Condominium Owners Association v. Dynasty Construction Company that a 2006 amendment to Washington’s laws regarding lawsuits against dissolved businesses applies retroactively to bar lawsuits initiated prior to the law’s effective date. Ballard Square arose when a condominium homeowner’s association filed suit against the developer alleging water intrusion damage caused by, among other things, defective building siding. The developer corporation had dissolved in October of 1995, shortly after sale of the last Ballard Square unit, but the association did not discover the damage until 1996 and 1997, and did not file suit until October … (3 comments)
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