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sample buslaw 2 case - spring 2017

Page history last edited by abogado 3 years, 8 months ago

Disregarding the Corporate Entity.

Steven and Janis Gimbert leased a warehouse to a manufacturing business owned by Manzar Zuberi. Zuberi signed the lease as the purported representative of “ATM MANUFACTURING, INC. BY: s/ Manzar Zuberi Its: Pres/CEO.” This was a nonexistent corporation.  Zuberi was actually the president of two existing corporations, ATM Enterprises, Inc., and Ameri-Pak International. Under the Ameri-Pak name, Zuberi manufactured a household cleaning product in the Gimberts’ warehouse. The hydrochloric acid used in the operations severely damaged the premises, and the Gimberts filed a suit in a Georgia state court against Zuberi personally to collect for the damage. 

Carefully read the judgment of Zuberi v. Gimbert (Links to an external site.),230 Ga.App. 471, 496 S.E.2d 741 (1998).

The following assignment is a Key Case Statement analysis. Please copy and paste statements along with your explanations. In essence you are expected to paraphrase the statements and explain what they mean. There are four Key Case Statements to explain and one question to answer at the end ("Question #5"). Each of the five items is worth 20 points.


Assignment #6 - Chapter 39

Statement #1
"When reviewing an appeal from the trial court's denial of a motion for involuntary dismissal in a bench trial, this Court will uphold the trial court's findings if there is any evidence to support them, Hamil v. Stanford. In his two enumerations of error, Zuberi claims that 1) no evidence allowed the court to find him personally liable; and 2) no evidence allowed the court to determine that his business operations caused the damage at issue.


Statement #2
"The evidence established that on November 1, 1990, Zuberi and the Gimberts entered a one-year lease on the warehouse. Zuberi signed the lease "ATM MANUFACTURING, INC. BY: s/ Manzar Zuberi Its: Pres/CEO." However, "ATM Manufacturing Inc." never existed as a corporation. Under OCGA § 14-2-204, "[a]ll persons purporting to act as or on behalf of a corporation, knowing there was no incorporation ..., are jointly and severally liable for all liabilities created while so acting." This statute imposes personal liability on one who, with "culpable knowledge," incurs liabilities on behalf of a non-existent corporation. See Weir v. Kirby Constr. Co."


Statement #3
"Zuberi also suggests that because the Gimberts believed they were dealing with a corporation, they are estopped from holding Zuberi personally liable. This contention has no merit. See Don Swann Sales Corp. v. Echols (a defendant may not assert the defense of corporation by estoppel where he has acted on behalf of a nonexistent corporation). Because Zuberi entered the lease on behalf of a company that did not exist, the trial court could find he was personally bound by the lease, and by any extensions of that lease beyond the original one-year period, so long as a business he operated occupied the premises. Therefore, the fact that Zuberi later occupied the premises under the corporate form, "Ameri-Pak International," did not relieve Zuberi of personal liability. See Korey v. BellSouth."


Statement #4
"At the time of trial, Mr. Gimbert testified the other two warehouses remained in good shape but the area which Zuberi rented had severely deteriorated and corroded. The trial court had the opportunity to view the other warehouses and compare them with Zuberi's area. The Gimberts' experts gave specific solutions for each of the problems they described. By producing this evidence, the Gimberts adequately "showed specific acts of waste or damage the results of which at the end of the term had not been repaired. Abernathy v. Gates."


Question #5
The Court held in favour of which party (who won) and why?

(Note: You must state the actual name of the party who won (not appellant, defendant, etc.), explain their argument, what legal principal(s) was used by the Court to favor them, and what facts in the case support that decision)



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