Will a judgment against an LLC affect corp officer’s credit? Available legal options?
Briefly, I’m suing my homebuilder for breach of contract on a new construction home. He refused to honor my state’s minimum warranty for workmanship and I had to pay 3rd party contractors to complete warranty items. He & his wife are sole employees/officers; I consider them dishonest. He is the Registered Agent and is named in the lawsuit. Let’s assume for my questions below that I get a judgment against the LLC, reimbursing me for my out of pocket repair & court costs.
- I understand a person’s credit gets hit hard if they get a judgment against them. If I am successful in getting a small claims court judgment against an LLC, will any of the officers get their CREDIT dinged for it?
- What negative affects (if any) does an officer of an LLC experience if they are named in a suit and lose? (Again, wife & husband only employees/officers.)
- Does the corporate credit/name get impacted (via their tax ID)?
- What are some of the legal tools available to me assuming I win? For instance, I think I can get a writ that would allow me to pull $$ out of his business account if he refuses to pay. I know I could garnish his wages (if he pulled a salary which I doubt he’s doing in today’s economy). I think I can force the sale of some corporate assets, but I’m not sure. That’s what I’m looking for. Advice?
- Isn’t there some sort of court ordered discovery process that’s available to me to check his financials?
One last thing. What if one of the officers retaliates and slanders me to my employer in retaliation for the lawsuit? Basically, he was served last week and since left me a voicemail saying if I don’t drop the case, he’ll tell my employer that I illegally obtained some personal documents of his from the mortgage transaction. (I work in the mortgage industry but the allegation is 100% untrue.)
Would the courts look at the timing of his allegation and inclusion of my employer as an act of intimidation? Or slander? Or is that too hard to prove these because you can’t get in his mind of whether he thought it was true or not (despite that he’s spreading false claims to my employer).
Do I save this for civil court after small claims? Do I ignore the intimidation and only respond if he actually contacts my employer? If I end up suing him for slander, can I sue the individual instead of the LLC since I assume he’d be acting outside the capacity of a corporate officer? I know he has assets and I’d love to slap a lien on his home.
Thanks in advance…
Tarrant County, TX
Went through TRCC SIRP – many confirmed warranty defects that he refused to repair. Even ombudsman said he was difficult and uncooperative
For clarification on who I sued, it was:
Acme Builder, LLC by serving Jane Doe, Registered Agent
Is this considered naming him in the lawsuit? I want the judgment against him mostly.
- Chuckie OLv 71 decade agoFavorite Answer
LLCs are wild animals, with not a lot of case law built up.
1. If the LLC is found liable, In most cases, the LLC is separate from the officers(members). So, no, the members are not directly impacted..
2. If the officers get named and found liable, they are liable.
3. An LLC is not a corporation, but its credit can be affected.
4. Possibilities, depending on state law. A levy on (LLC or individual, depending which is found liable) bank account, lien on properties or other assets.
5. Yes, if you win and he doesn't pay, you can go back to the court and ask for discovery.
6. This message (I hope you saved it) could be used at trial, or in a future civil or even criminal case against him. It was a bad move.
7. The threat itself is illegal whether he though it was true or not.
8. Regular court or small claims should be decided on the amount. BTW, I would tell the employer about this intimidation yourself. That way you can explain.
- HeideLv 44 years ago
More than likely yes.