Can someone sue a DBA for breach of contract by the parent corporation?
My restaurant is a subsidiary of my corporation, and it's official name is ABC Investment Inc. dba DEF Restaurant.
A contractor is suing us for not paying him money upon completion of a project. We refused to pay because he did not complete all parts of the contract. The original signed contract was negotiated between ABC Investment Inc. and the contractor (as opposed to DEF Restaurant and the contractor).
The contractor first sued me (as a person), and the case was dismissed in small claims by a judge for wrong defendant. Now the contractor has filed again, suing "ABC Investment Inc. dba DEF Restaurant".
Does the contractor have a valid claim against the corporation, or an invalid one against the restaurant?
3 attorney answers
The restaurant business is not a separate legal entity, merely a fictitious business name for the corporation.
Accordingly, the corporation is the correct defendant.
This is a good example of why different businesses - even if they have the same ultimate owner - should be owned by separate legal entities. You should talk to an experienced business lawyer ASAP.
This information does not constitute legal advice and does not establish an attorney-client relationship.
If I were the contractor and there was some confusion as to who to sue, I would start by suing the company that signed the contract, and then add all those others that might have some liability, including the dba and the individuals. The dba is not technically a subsidiary, but just another name the corporation is operating under. It is essentially the same as the corporate entity.
The contractor probably has a valid claim against the corporation and equally against the restaurant.
A dba does not change the legal status of the filer. An individual with a dba remains a legal individual and a corporation with a dba remains the same legal entity. Since ABC signed the contract (whether it signed dba DEF, or dba XYZ is of no legal significance.
The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.
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