Court reverses judgment

April 22, 2010
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The Michigan Court of Appeals has reversed a 2008 judgment against excavation contractor Carl Perrin, who had been ordered to pay Duray Development damages of $96,367 for breach of contract related to a development project in Caledonia Township in 2004.

The court reversed the judgment of the trial court that the de facto corporation law cannot apply to limited liability companies, and also reversed the trial court’s decision to bar defendants from calling witnesses. The case has been remanded for further proceedings.

In September 2004, Duray made a contract with Perrin, Perrin Excavating and KDM excavating for work at the so-called Copper Corners at 76th Street and Kraft Avenue. A month later, a new contract between Duray and Perrin was signed to supersede the first, with a new excavating firm formed by Perrin and a partner, Outlaw Excavating. Duray later sued, alleging excavation work was not satisfactory nor performed on time. During the discovery period prior to trial, Duray learned that the Outlaw company had not obtained legal status as an LLC at the time the parties executed the second contract.

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