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Company owner personally liable for unpaid phone book ads

December 10, 2015

A Hamilton County court erred in holding that the person who signed a contract as “owner” of a company, which later did not pay for advertising in the Yellow Book phonebook, was not personally liable for the amount owed under the contract.

Robin J. Brooks signed the contract with Yellow Book Sales as “owner” of JB McCoy Masonry Inc., the customer identified in the contract. The contract said in several places that the signer personally and individually assumes the full performance of the agreement, including payments of amounts due.

JB McCoy ended up not paying for the advertising, resulting in Yellow Book suing the company and Brooks for the $28,974 owed, plus interest. She testified at trial that while she is the owner of the company, she believed the word “owner” in the contract conveyed that she was acting as a representative. She also testified she did not read the reverse side of the contract.

The trial court concluded Brooks was not liable as a guarantor because the contract contained no language creating a conditional promise to pay, and that she was not liable because the contract was ambiguous concerning whether she signed only on behalf of the company or also agreed to be personally liable.

“Examining the language in the Contract, we conclude that the Contract is not ambiguous in its intent to make Brooks, as the signer, ‘personally and individually’ as well as ‘jointly and severally’ responsible to pay Yellow Book the amounts due under the Contract,” Judge James Kirsch wrote in reversing the lower court.

“Here, the Contract set forth, in three separate places, that the signer, Brooks, was assuming personal liability under the Contract. Brooks’s failure to read the Terms of the Contract on the reverse side does not make the Contract ambiguous.”

The judges remanded for the trial court to make a determination of damages, including interest, and attorney fees. The case is Yellow Book Sales and Distribution Company, Inc. v. JB McCoy Masonry Inc. and Robin J. Brooks, 29A04-1504-CC-151.

 

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