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Contracts 101

We handle a variety of cases for a variety of people. Some of our clients are officers of large corporations, and despite what types of contracts they thought they were getting into, those officers became clients when they were being personally sued for their corporate decision and deal making. First, before an action for breach of contract can be sustained, there must be an enforceable contract. “[A] meeting of the minds of the parties on all essential elements is a prerequisite to the existence of an enforceable contract....” Bus. Specialists, Inc. v. Land & Sea Petroleum, Inc., 25 So. 3d 693, 695 (Fla. 4th DCA 2010) (quoting Acosta v. Dist. Bd. of Trs. of Miami-Dade Cmty. Coll., 905 So.2d 226, 228 (Fla. 3d DCA 2005) (quoting Greater N.Y. Corp. v. Cenvill Miami Beach Corp., 620 So.2d 1068, 1070 (Fla. 3d DCA 1993)). Further, it is well established that “in construing a contract the leading object is to ascertain and effectuate the intent of the parties.” See also Morton v. Morton, 307 So. 2d 835, 839 (Fla. 3d DCA 1975) (quoting second Ace Elec. Supply Co. v. Terra Nova Elec., Inc., 288 So. 2d 544 (Fla. 1st DCA 1973) (holding that the Court examination of extrinsic evidence in ascertaining the intent of the parties consists in part of declarations of intent from the parties, the purpose and object to be obtained in the agreement, and evidence as to the interpretation which the parties may appear to have placed thereon by their actions and the manner of their dealings thereunder). Therefore, when a Lender or other party engages a contract based on the particular conduct of the parties and declarations leading up to that conduct a valid contract may be deemed to exist.[1]

Additionally, when a Plaintiff refuses to pursue the right party, which may be your corporation rather than you personally, the Plaintiff has then failed to join the proper and indispensable party to this action. As such, the Plaintiff’s action may be fatally flawed. An indispensable party is “one whose interest in the controversy makes it impossible to completely adjudicate the matter without affecting either that party's interest or the interests of another party in the action.” (Emphasis added). Florida Dep't of Revenue v. Cummings, 930 So. 2d 604, 607 (Fla. 2006)(quoting Hertz Corp. v. Piccolo, 453 So.2d 12, 14 n. 3 (Fla.1984) (describing indispensable parties as ones so essential to a suit that no final decision can be rendered without their joinder); Bastida v. Batchelor, 418 So.2d 297, 299 (Fla. 3d DCA 1982) (“An indispensable party [is] one without whom the rights of others cannot be determined.”).

Further, except under limited circumstances, “[a]n officer of a corporation cannot be held liable in his individual capacity.” Ryan v. Wren, 413 So. 2d 1223, 1224 (Fla. 2d DCA 1982). The mere fact that you may share ownership of a corporate entity, does not lead to the inevitable conclusion that the corporate entity is a “fraud” or that it is necessarily your alter ego to the extent that the debts of the corporation should be imposed upon you personally. See Russell v. Gans, 275 So. 2d 270, 271 (Fla. 3d DCA 1973) (quoting Advertects, Inc. v. Sawyer Industries, Inc., 84 So. 2d 21 (Fla.1955)). That is called piercing the corporate veil. The rule is that the corporate veil will not be pierced, either at law or in equity; unless it is shown that the corporation was organized or used to mislead creditors or to perpetrate a fraud upon them. (Emphasis added) See South Florida Citrus Land Co. v. Waldin, 61 Fla. 766, 55 So. 862; Biscayne Realty & Ins. Co. v. Ostend Realty Co., 109 Fla. 1, 148 So. 560; 14 C.J. 61, Corporations, § 22; 18 C.J.S., Corporations, §§ 6, 7, page 376, et seq. Where for example the parties continued to exchange payments there does not appear to be a suggestion that the corporation was organized as either a “subterfuge or for the purpose of enabling its members to escape, avoid or evade personal responsibility other than in a proper and legal manner.” Compare Bellaire Securities Corporation v. Brown, 124 Fla. 47, 168 So. 625.

Lastly, Rule 1.210(a) of the Fla. R. Civ. P. provides, in pertinent part:

Every action may be prosecuted in the name of the real party in interest, but a personal representative, administrator, guardian, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another, or a party expressly authorized by statute may sue in that person’s own name without joining the party for whose benefit the action is brought...

The plaintiff in this action meets none of these criteria. The party prosecuting the action must have a sufficient stake in the outcome and that the party bringing the claim is recognized in the law as being a real party in interest entitled to bring the claim. This entitlement to prosecute a claim in Florida courts rests exclusively in those persons granted by substantive law, the power to enforce the claim. Kumar Corp. v Nopal Lines, Ltd, et al, 462 So. 2d 1178, (Fla. 3d DCA 1985). If any of the above sounds like your case, please make an appointment to come see me about what options you might have to fight for your rights against debt.