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Trouble with the Curves: Ex-husband still owes for franchise’s default

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A couple’s failure to inform a landlord of their divorce doesn’t excuse the ex-husband from a default judgment on rent payments for a health club that his former wife continued to run.

Lori and Dan Cole ran a Curves for Women franchise in Angola and rented space from the Flying Cat, LLC, beginning in 2001. They separated in 2005 and filed for divorce in 2007.

The Curves franchise owed back rent of $21,641 when Lori Cole signed an option to renew the lease in 2008. By 2010 the landlord was owed $44,647. Flying Cat sued and the Steuben Circuit Court ruled that Dan was liable for amounts due and unpaid through 2010.

The Court of Appeals affirmed Tuesday in Curves for Women Angola An Indiana Partnership, Dan Cole, and Lori Cole v. Flying Cat, LLC, 76A04-1206-PL-312. The court rejected arguments that Dan Cole was no longer in partnership with his ex-wife and that he was not liable under lease extensions signed by his ex-wife in the name of the partnership through which the franchise originally leased the space.

“Even after a partnership has been dissolved, a partner may still bind the partnership by engaging in a transaction that would bind the partnership had it not been dissolved, if the other party to the transaction had known of the partnership prior to dissolution but had no knowledge or notice of the dissolution because ‘the fact of dissolution had not been advertised in a newspaper of general circulation in the place … the partnership business was regularly carried on,” Judge Paul Mathias noted, citing I.C. § 23-4-3-35(1)(b)(II).




 

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