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DISTRICT OF COLUMBIA COURT OF APPEALS
Nos. 24-CV-0503 & 24-CV-0756
MICHAEL BALL, APPELLANT,
V.
DAVID HUBBARD, APPELLEE.
Appeals from the Superior Court
of the District of Columbia
(2022-CA-004059-B)
(Carl E. Ross, Judge)
(Submitted January 6, 2026 Decided August 6, 2026)
Michael Ball, pro se. *
Before BECKWITH, MCLEESE, and DEAHL, Associate Judges.
DEAHL, Associate Judge: Michael Ball agreed to sell David Hubbard a house
in the District. Hubbard failed to close on the deal, and Ball sued him for breach of
contract. After the trial court denied Hubbard’s motion to dismiss, Ball’s attorney
withdrew from representing him, and Ball did not personally participate in the
proceedings for several months thereafter. During that time, Hubbard filed an
*
Appellee David Hubbard did not file a brief in this appeal.
2
unopposed motion for summary judgment, along with an affidavit asserting various
facts.
The trial court granted summary judgment in Hubbard’s favor, ruling on the
uncontested facts that “[t]wo conditions precedent to the contract were not met and
as such the contract is unenforceable.” The court reasoned that (1) Hubbard never
created a limited liability company, or LLC, as expected for purposes of purchasing
the property, and (2) Ball did not supply Hubbard with certain required documents
under the Tenant Opportunity to Purchase Act (TOPA). Because those two
conditions precedent were not met, in the court’s view, the contract was
unenforceable. In any event, the court reasoned, Hubbard could not be held
personally liable for any breach because he signed the sales contract as a mere agent
of the unformed LLC. After that ruling, Ball resumed participating in the case and
filed a motion to set aside that judgment, which the trial court denied.
Ball now appeals the trial court’s grant of summary judgment. We agree with
him that the trial court erred when it granted summary judgment in Hubbard’s favor.
Neither of the failings that the trial court highlighted is properly categorized as a
condition precedent under the plain terms of the contract. First, nothing in the
contract indicates that the formation of Hubbard’s anticipated LLC was a condition
precedent to the contract’s formation or its performance. While Hubbard averred that
3
this was the unwritten understanding of the parties, alleged unwritten understandings
that contravene the plain terms of an integrated contract—where Hubbard signed on
the “Buyer” line, and the contract disavowed any promises outside of the contract’s
four corners—are no basis for summary judgment. Second, the contract’s TOPA
provision specifically required Hubbard to notify Ball of any non-compliance and to
give Ball three days to cure any defect. This provision is not properly categorized as
a condition precedent. It expressly gave Hubbard only a “Right to Void,” contingent
on notice of the defect and Ball’s failure to cure it, and there is no indication that
Hubbard ever took the steps necessary to exercise this right. Finally, and contrary to
the trial court’s reasoning, we cannot say as a matter of law that Hubbard could not
be held personally liable for any breach.
We thus reverse and remand the case for further proceedings.
I. Factual Background
Michael Ball agreed to sell David Hubbard a house located at 221 35th Street
in Northeast D.C. for $665,000. When Hubbard failed to pay the agreed-upon sale
price by the settlement date, Ball sold the house to another buyer. Ball then sued
Hubbard for breach of contract, seeking $26,000 in damages—the difference
between the contracted for price and what Ball later sold the property for (after
accounting for a credit he extended to the new buyer). Ball’s complaint asserted that
4
he and Hubbard had a valid contract, that all conditions to performance had been
satisfied, and that Hubbard’s failure to perform breached the contract and was
unjustified.
Several things about Ball’s contract with Hubbard, which Ball attached to his
complaint, are relevant to this appeal. First, the “Buyer” of the property is listed as
“221 35th LLC (To Be Formed)” on the first page. Second, Hubbard initialed each
page of the contract on the “Buyer” line and signed his name on the final page’s
“Buyer” line, though “221 35th LLC (To Be Formed)” appears below his signature
as the named buyer. Third, the contract includes an integration clause, stating that
the contract “contains the final and entire agreement of the parties” unless amended
in writing, and that “the parties will not be bound by any terms, conditions, oral
statements, warranties or representations not herein contained.” Finally, the contract
contains an addendum with a “TOPA compliance” requirement. In relevant part, it
required Ball to contact the settlement agent either to furnish proof that he was “in
compliance” with TOPA—which, among other things, requires sellers to inform
their tenants of a priority right to purchase the property, see D.C. Code
§§ 42-3404.01-3404.16—or “to establish the necessary steps to be in compliance
with” TOPA. It further specifies that “TOPA Compliance requires Delivery to the
Settlement Agent of specific documentation satisfactory to the title insurance
underwriter” and that, if Ball did “not accomplish[] TOPA Compliance” within
5
thirty days of the contract ratification date, Hubbard “may . . . Deliver Notice that
this Contract will become Void” on the third day following delivery of that notice
unless the TOPA defect was remedied by then.
Hubbard moved to dismiss the complaint, asserting that he and Ball never had
a contract because the contracting parties were Ball and “221 35th LLC (To Be
Formed).” Hubbard claimed that he never intended to purchase the property in his
personal capacity and that the parties agreed the contract would become “null and
void” if the LLC was not formed. Ball argued in opposition that Hubbard was
personally liable for breaching the contract, that nothing in the contract suggested it
was conditioned on the creation of an LLC, and that Hubbard would be personally
liable in any event because a non-existent LLC could not be a party to a contract.
The trial court—at that point Judge Todd E. Edelman—denied Hubbard’s
motion to dismiss. While the court acknowledged that “221 35th LLC (To Be
Formed)” was listed as the “Buyer,” it found the most reasonable interpretation of
the contract language was that Hubbard signed it as a “promoter” on behalf of the
to-be-formed LLC. Because a promoter can be personally liable for breach of
contract, and because Hubbard failed to identify language that suggested creating
the LLC was a condition to performance, dismissal was unwarranted. Hubbard then
filed a counterclaim to recover the $10,000 earnest money deposit he paid to Ball
6
and alleged that Ball never provided him with certain “TOPA documents as required
by law and agreement.” Ball countered that he was entitled to keep the deposit as a
result of the breach and denied the allegation that he failed to provide any required
TOPA documents.
Several months later, Ball’s counsel moved to withdraw, and Hubbard moved
for summary judgment. Hubbard asserted that two contractual conditions precedent
had not been satisfied: (1) 221 35th LLC had not been formed; and (2) Ball had not
delivered the required TOPA documents to Hubbard. On the first point, while
Hubbard admitted that he was a “corporate promoter” on behalf of the LLC, he
claimed that Ball “agreed to bind the corporation alone.” Hubbard submitted an
affidavit in which he attested that Ball “knew” at “the time of signing” that the LLC
was not yet formed and “did not deliver to [him] the [TOPA] documentation as
outlined in the sales contract.” Hubbard also argued in his summary judgment
motion that he was not personally liable in any event because he disclosed his status
as a mere agent for the principal purchaser, the to-be-formed LLC. Ball did not file
an opposition to Hubbard’s motion.
The trial court—then Judge Carl E. Ross—agreed with Hubbard on each of
his arguments and granted summary judgment on two grounds: (1) neither of the
conditions precedent that Hubbard highlighted was satisfied because “221 35th
7
Street, LLC, was not incorporated” and “[Ball] failed to deliver the TOPA
documents”; and (2) Hubbard could not be personally liable because he told Ball
that he was “not personally interested in purchasing the property” and thus
“disclosed” his status as an “agent” of a “principal” (the LLC). The trial court also
ruled in Hubbard’s favor on his breach of contract counterclaim and ordered Ball to
repay the $10,000 deposit. The court further directed Ball to pay an additional
$15,720 in attorney’s fees and costs to Hubbard, as the contract conferred those fees
on the “prevailing party” in any legal dispute.
Ball then re-engaged with his case and moved to set aside the judgment. Ball
raised a host of counterpoints to the summary judgment motion and the trial court’s
ruling, and he further explained that he failed to initially oppose that motion because
he could no longer afford counsel, he was suffering from depression, he was evicted
from his home, and he did not receive the court notices because they were sent to
the wrong address. The trial court denied that motion, and Ball now appeals.
II. Analysis
Ball challenges the trial court’s grant of summary judgment in Hubbard’s
favor and its rulings that Hubbard was entitled to the return of his $10,000 security
deposit and attorney’s fees and costs. These issues, while distinct, all reduce to
whether the trial court was correct to rule on the summary judgment record that the
8
contract was “unenforceable” because two conditions precedent to Hubbard’s
performance were not met, and that Hubbard was not personally liable as a mere
agent of the to-be-formed LLC listed as the buyer.
Summary judgment is appropriate if a movant shows there is “no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Super. Ct. Civ. R. 56(a)(1). When a nonmovant does not respond to a motion
for summary judgment, the trial court can treat as conceded the facts in the movant’s
affidavit in assessing whether there is a genuine dispute of material fact, at least if
they are not otherwise countered by record evidence. See Lynch v. Meridian Hill
Studio Apts., Inc., 491 A.2d 515, 521 (D.C. 1985) (trial court may “accept the
moving party’s verified version of the facts if it is not countered with specificity in
a timely fashion”). But the trial court cannot treat an unopposed motion as conceded
without independently determining if summary judgment is warranted as a matter of
law. See Gant v. Lynne Experience Ltd., 325 A.3d 407, 414 n.3 (D.C. 2024). Even
when unopposed, “the court must still review the pleadings and other papers to
determine whether the moving party is legally entitled to [summary] judgment.”
Milton Props., Inc. v. Newby, 456 A.2d 349, 354 (D.C. 1983). We review a grant of
summary judgment de novo, Murray v. Motorola, Inc., 339 A.3d 152, 169 (D.C.
2025), and we must “make certain that the trial judge did not simply deem the
9
summary judgment motion as conceded,” Hefazi v. Stiglitz, 862 A.2d 901, 908 (D.C.
2004) (quoting Milton Props., 456 A.2d at 354).
We now consider the trial court’s two alternative bases for granting summary
judgment to Hubbard: (1) that two conditions precedent were never satisfied; and
(2) that in any event, Hubbard is not personally liable for breach of contract because
he disclosed his status as an agent of a yet-to-be-formed LLC. Based on the plain
terms of the contract and our independent review of the record, see Steinke v. P5
Sols., Inc., 282 A.3d 1076, 1089 (D.C. 2022), we conclude that neither of the two
contingencies that the trial court identified was a condition precedent to the
performance of this contract, and that Hubbard’s theory of nonliability for disclosed
agents of nonexistent entities should have been rejected.
A. The contract did not contain the two averred conditions precedent
The trial court granted summary judgment to Hubbard based on its assessment
that two contractual conditions precedent were not satisfied, to wit, the creation of
“221 35th LLC” and Ball’s delivery of TOPA documents to Hubbard. This
assessment was seemingly drawn from Hubbard’s affidavit, which attested that the
contract was “null and void” because the LLC was “never formed” and that Ball “did
not deliver to [Hubbard] the [TOPA] documentation as outlined in the sales
contract.” While the trial court could treat the facts underlying those arguments as
10
conceded given Ball’s failure to deny or counter them, it had an independent
obligation to examine whether the alleged conditions precedent in fact existed under
the contract’s terms. And while the trial court seemed to undertake that task, it erred
in concluding that these were conditions precedent, as the plain terms of the contract
are to the contrary.
We begin by distinguishing between two types of conditions precedent. There
are (1) conditions precedent to the formation of a contract; and (2) conditions
precedent to the performance of a contract. See 13 Williston on Contracts § 38:7 (4th
ed. May 2026 update) (“A condition precedent may relate either to the formation of
contracts or to liability under them.” (citation omitted)); Edmund J. Flynn Co. v.
Schlosser, 265 A.2d 599, 600-01 (D.C. 1970) (describing “the confusion in this area
of the law” owing to the “dual usage” of the term). “The ‘condition precedent’ to the
formation or existence of a contract is [simply] the mutual assent or agreement of
the parties” to be bound by the agreement. Edmund J. Flynn Co., 265 A.2d at 601.
The more typically discussed condition precedent is to a contract’s performance, in
which the contract can be enforced, but one party’s duty to perform under it does not
arise unless and until some condition is satisfied. See id.; see also Bare v. Rainforest
All., Inc., 336 A.3d 619, 624 (D.C. 2025) (defining a condition precedent as “an
event, not certain to occur, which must occur, unless its non-occurrence is excused,
11
before performance under a contract becomes due” (quoting Psaromatis v. Eng.
Holdings I, LLC, 944 A.2d 472, 481 (D.C. 2008))).
Neither the parties nor the trial court disentangled these two theories, but as
best we can tell, the trial court ruled that both the creation of the LLC and the delivery
of the TOPA documents were conditions to the performance of the contract. 1 That
is best evidenced by the fact that Hubbard brought his own breach of contract claim
against Ball, the trial court ruled in his favor on that claim, and the trial court further
awarded Hubbard attorney’s fees and costs “[i]n accordance with the contract,”
which shifted those to the “prevailing party” in any legal dispute. Both of those
rulings presuppose that an enforceable contract was formed, but that Hubbard’s duty
to perform under it never arose.
At least as to conditions precedent to performance, we have recognized a
“presumption in favor of construing doubtful language in a contract as language of
1
Hubbard did make some arguments before the trial court that sound more pertinent to the formation of the contract—for instance, he argued that he and Ball “did not have any meeting of the minds to enter a contract together” because their mutual assent was to bind the to-be-formed LLC as purchaser. But the only view consistent with the trial court’s rulings that Ball breached the contract and owed attorney’s fees pursuant to it is that a contract existed and Hubbard’s duty to perform under it never arose because two supposed conditions to his performance were not fulfilled. So we do not further examine the arguments under a theory that the LLC’s creation was a condition to formation, as that was not the theory the trial court ruled upon, and Hubbard has not urged us to consider that alternative theory given his nonparticipation in this appeal.
12
promise rather than as language of condition.” Washington Props., Inc. v. Chin, Inc.,
760 A.2d 546, 549 (D.C. 2000); see also BSA 77 P St. LLC v. Hawkins, 983 A.2d
988, 993-94 (D.C. 2009) (defining a promise as “an express or implied declaration
that raises a duty to perform and subjects the promisor to liability for breach for
failure to do so”). This presumption “protects both parties” by “avoiding the harsh
effect of forfeiture which may result from a failure of a condition precedent” and the
“consequence that a slight failure to perform wholly destroys all rights under the
contract.” Chin, 760 A.2d at 549. No magic words are needed to create a condition,
but words like “if” or “provided that” indicate a promise is “expressly conditional
on a specified event.” BSA 77 P St., 983 A.2d at 994 (emphasizing the word “if” in
finding a promise was conditional). Whether a contractual provision sets forth a
condition precedent is a question of law that is to be discerned “from the words [the
contracting parties] have employed and, in case of ambiguity, after resort to other
permissible aids to interpretation.” Chin, 760 A.2d at 549; see BSA 77 P St., 983
A.2d at 993 (“The proper interpretation of a contract term is a question of law.”).
Based on the language of this contract, the creation of an LLC was not a
condition precedent to Hubbard’s performance. The only language that references
the LLC is the phrase “221 35th LLC (To Be Formed),” which is listed as the
“Buyer” of the property on the first page of the contract and below Hubbard’s
signature on the final page. But merely stating that an entity is “to be formed,” and
13
listing it as the buyer, does not relieve the signatory and guarantor of the contract—
in this case, Hubbard—of their contractual obligations under it. Nor does anything
else in the contract itself suggest that Hubbard’s promise to purchase Ball’s house
was conditional on creating an LLC: the parenthetical uses no conditional language,
and no other provision so much as references the LLC.
To make up for the absence of any contractual language supporting his view,
Hubbard pointed the trial court to the uncontested facts in his affidavit. In that
affidavit, Hubbard attested: “It was agreed that I personally was not the buyer for
this property, which is why my name is not listed as the Buyer,” and that the contract
became “null and void” when Hubbard failed to form the LLC. The trial court relied
on those assertions when concluding that the creation of 221 35th LLC was a
condition precedent of the contract. There are three critical flaws with it doing so.
First, crediting a one-sided account of an oral agreement not referenced in the
contract conflicts with the contract’s integration clause, which states that it contains
the “final and entire agreement of the parties and the parties will not be bound by
any terms, conditions, oral statements, warranties or representations not herein
contained.”
Second, even if Hubbard could clear that first hurdle, cf. Howard Univ. v.
Good Food Servs., Inc., 608 A.2d 116, 127 & n.9 (D.C. 1992) (discussing when an
14
oral agreement may be binding despite an integration clause), Hubbard did not
provide enough details for the trial court to have reasonably concluded that the
parties had an enforceable agreement to bind only the LLC and exempt Hubbard
from performance and liability. The contract terms were to the contrary, and
Hubbard did not explain when the parties reached this parol agreement—e.g., before
or after the contract disavowing all parol agreements was executed—what words
were exchanged to manifest the agreement, or any other particulars that would have
informed whether the alleged oral agreement was binding. His attestations were
conclusory and predominantly legal in nature, rather than factual.
Third, even if Hubbard could clear both hurdles so that the creation of the
LLC could be read as a condition precedent to this contract’s performance,
Hubbard’s failure to create the LLC still would not render the contract nonbinding
as to him. That is because the formation of the LLC was entirely within Hubbard’s
control—he has never contended that it was frustrated by some external event—and
a contracting party cannot take any shelter in their intentional decisions not to satisfy
conditions to performance. Two well-established and interlocking doctrines make
that clear. The first one is the implied covenant of good faith and fair dealing, which
inheres in every contract and requires parties to act in good faith to fulfill any
conditions therein. See Wright v. Howard Univ., 60 A.3d 749, 754 (D.C. 2013)
(listing “purposeful failure to perform” as an example of “[b]ad faith” that violates
15
this covenant). It is this implied duty of good faith that renders contracts with
conditions within one party’s control enforceable in the first place—without that
implied duty, the party with control over the condition’s fulfillment could simply
walk away from the sale without consequence. See Beavers Serv., Inc. v. Norris, 470
A.2d 312, 315 (D.C. 1983) (explaining that contracts with conditions within one
party’s control are enforceable only because “the condition might require the
exercise of good faith”).
Next there is the related “prevention doctrine,” which excuses the nonoccurrence of a condition precedent when the non-occurrence is fairly attributable
to the promisor’s own conduct and allows the other party to enforce the contract as
if the condition had been satisfied. In re Est. of Drake, 4 A.3d 450, 454-55 (D.C.
2010). As we have previously put it: “It is a principle of fundamental justice that if
a promisor is himself the cause of the failure of performance, either of an obligation
due him or of a condition upon which his own liability depends, he cannot take
advantage of the failure.” Id. at 454 (citation omitted); see also Urb. Masonry Corp.
v. N & N Contractors, Inc., 676 A.2d 26, 36 n.21 (D.C. 1996) (“[A] contractor whose
promissory duty is subject to a condition precedent eliminates that condition if he
unjustly prevents its fulfillment. This is true even though he has made no express
promise that he will not prevent such fulfillment.” (quoting 3 Corbin on Contracts
§ 770 (1960 & 1994 Supp.))).
16
As for the second purported condition precedent—Ball’s delivery of TOPA
documents to Hubbard—the contractual language demonstrates that this was not a
condition precedent to performance either. Consider two points. First, the relevant
clause of the contract required Ball to deliver certain TOPA documents only “to the
Settlement Agent,” a neutral third party, not to Hubbard himself. Hubbard’s
attestation that Ball did not deliver those TOPA documents to him, thus, does not
establish any failure to fulfill so much as a promise, much less a condition precedent.
But we will set this first point aside and charitably read Hubbard’s affidavit before
the trial court to effectively assert that Ball had not delivered the TOPA documents
to him via the settlement agent. 2
The second and fatal problem with this argument is that the requirement that
Ball deliver certain TOPA documents is quite expressly not couched as a condition
precedent at all. The contract’s TOPA requirement contains a provision titled
“Buyer’s Right to Void,” and it sets forth Hubbard’s exclusive remedy for Ball’s
2
That charitable reading seems merited here given that Ball did not file any opposition to summary judgment or affidavit of his own, and on appeal he contends that he did in fact deliver the TOPA documents to Hubbard, rather than zeroing in on the point we have just made. Indeed, Ball did not home in on most of the points driving this opinion’s analysis, so that we might ordinarily direct supplemental briefing from Hubbard on the principles of contract interpretation that we are applying to the contract’s terms here. We do not take that step, however, given that Hubbard has never participated in this appeal and has ignored multiple previous briefing orders directing him to file a brief in this appeal.
17
failure to deliver TOPA documents as follows: “In the event that [Ball] has not
accomplished TOPA Compliance, within 30 days following the Date of Ratification
. . . [Hubbard] may, at any time thereafter, but prior to [Ball] accomplishing TOPA
Compliance, Deliver Notice that this Contract will become Void at 6:00 p.m. on the
3rd day following Delivery of [Hubbard’s] Notice,” unless Ball accomplishes TOPA
compliance before that date and time.
So even assuming Ball failed to provide the necessary TOPA documents, that
failure only granted Hubbard a right to void the contract, which he could have
exercised only if he waited thirty days following the contract ratification date,
notified Ball at that point that he intended to void the contract, and gave Ball another
three days to cure. This elective, unilateral right to void is quite different from the
automatic excusal from performance that the failure to satisfy a condition precedent
would have conferred. See CorpCar Servs. Hou., Ltd. v. Carey Licensing, Inc., 325
A.3d 1235, 1249-50 (D.C. 2024) (contrasting an “automatic termination” provision
with a “right to cancel” provision that was “contingent on the breaching party’s
opportunity” to cure); Psaromatis, 944 A.2d at 482 (contract is “discharged” when
a party fails to perform a condition). Nor does any other language suggest we should
treat this right to void as a condition precedent to Hubbard’s performance. Given the
lack of express conditional language in the TOPA provisions and the presumption
against construing promissory language as conditional, Chin, 760 A.2d at 549, we
18
conclude that Ball’s delivery of TOPA documents to the settlement agent was not a
condition precedent to Hubbard’s performance under the contract, but a mere
promise to perform.
We thus hold that the trial judge’s first basis for granting summary judgment
to Hubbard—that the contract was not enforceable because neither of the two
purported conditions precedent was fulfilled—was erroneous. The contract between
Ball and Hubbard did not render the creation of an LLC or the delivery of TOPA
documents conditions precedent, and the vague assertions in Hubbard’s affidavit
were insufficient to establish that the parties intended to be bound by any oral
agreements outside the terms of the contract.
B. The trial court erred in holding that Hubbard was not personally liable as an
agent of a disclosed principal
We now consider the trial court’s alternative basis for granting summary
judgment to Hubbard—that even if Ball and Hubbard had an enforceable contract
with all conditions satisfied, Hubbard could not be held personally liable for
breaching it because he disclosed his status as an “agent” to a “principal” (the yetto-be-formed LLC). As the trial court correctly noted, “when his principal is fully
disclosed, the agent ordinarily does not incur personal liability.” Resnick v. Abner B.
Cohen Advert., Inc., 104 A.2d 254, 255 (D.C. 1954); see also Restatement (Third)
19
of Agency § 6.01 cmt. b (Oct. 2024 update) (“An agent who enters into a contract
on behalf of a disclosed principal does not become a party to the contract and is not
subject to liability . . . unless the agent and the third party so agree.”). But this
general rule applies only when the principal has legal capacity to contract, and a
company that does not exist has no such capacity. See Restatement (Third) of
Agency § 3.04 cmt. d (defining “existence” as an element of legal capacity for
corporation principals); see also Resnick, 104 A.2d at 255 (noting that an individual
“does not escape liability by purporting to act for a fictitious or nonexistent
principal”). The trial court thus erred in accepting that Hubbard “does not incur
personal liability under the contract” because he told Ball he was “not personally
interested in purchasing the property.”
Because 221 35th LLC had no legal capacity to contract when Hubbard signed
the sales contract on its behalf, Hubbard was necessarily acting as a “promoter” for
the yet-to-be-formed LLC. See 12 Williston on Contracts § 35:71 (4th ed. May 2026
update) (“[S]ince it is impossible for the corporation to contract before it comes into
existence, the contract is treated as that of the promoter even though the language
. . . is appropriate for a contract by the corporation.”). The general rule is that
promoters are personally liable for contracts they sign on behalf of yet-to-be-formed
entities. See Corto v. Nat’l Scenery Studios, Inc., 705 A.2d 615, 624 (D.C. 1997)
(“Because it is undisputed that no limited partnership was formed, if [defendant]
20
signed the contract for a non-existent partnership, she was personally liable.”); Jones
v. Health Res. Corp. of Am., 509 A.2d 1140, 1146 n.15 (D.C. 1986) (“A promoter,
although assuming to act on behalf of a projected corporation and not individually,
will be held personally liable on contracts made for the benefit of a corporation
which the promoter intends to organize.”); Geier v. Conway, Homer & Chin-Caplan,
P.C., 983 F. Supp. 2d 22, 38 (D.D.C. 2013) (“[W]hen an individual purports to act
on behalf of a corporation and the corporation has not yet been formed, the individual
is liable for the debts he incurred.” (citing Robertson v. Levy, 197 A.2d 443, 447
(D.C. 1964))); see also 18 C.J.S. Corporations § 110 (2026) (“Generally, when a
promoter signs a contract on behalf of a nonexistent principal, the promoter renders
him- or herself liable on the contract.”).
There is an exception to promoter liability, however, if the other party agrees
to bind only the unformed principal to the contract. See 18 C.J.S. Corporations § 110
(“[W]here the person with whom the contract is made agrees to look to the
corporation alone for performance, the promoter incurs no personal liability with
respect to the contract.”); see also Frazier v. Ash, 234 F.2d 320, 326-27 (5th Cir.
1956) (same). Thus, the key question for determining whether Hubbard can be
personally liable is whether Ball agreed that only Hubbard’s anticipated LLC, and
not Hubbard himself, would be bound by the contract. That is very much a disputed
factual question that precludes summary judgment in Hubbard’s favor—nothing in
21
Hubbard’s affidavit established or even suggested that Ball agreed not to hold
Hubbard personally liable if the LLC was not formed. The closest thing to that is
when Hubbard attested that Ball knew he was “not personally interested in
purchasing the property,” and only “interested in purchasing under” an LLC. That is
all well and good, but a seller can obviously be aware that a buyer wants to purchase
a property through an LLC, while at the same time having no intention or agreement
to absolve them personally if they never in fact form the LLC.
An appellate case from Florida is instructive. In Blue Paper, Inc. v. Provost,
914 So. 2d 1048 (Fla. Dist. Ct. App. 2005), William Provost contracted with Blue
Paper to purchase property, and the contract identified the buyer as “William
Provost, on behalf of a Limited Liability Company to be formed under the laws of
the State of Florida, and/or assigns.” Id. at 1049. After Provost sued for specific
performance of the contract, Blue Paper argued that Provost could not enforce the
contract because he had signed on behalf of a principal and thus was not personally
liable under the contract. Id. at 1051. The court rejected this argument, noting the
“general rule” that “the promoter of a corporation is personally liable on the contracts
entered into on behalf of the corporation he is organizing.” Id. Although the court
noted the aforementioned exception for when “the other party knows of the
nonexistence of the contemplated corporation and the parties agreed to bind the
corporation alone,” it found the exception did not apply because Provost “signed the
22
contract in his personal capacity” and “[n]othing in the contract exempt[ed] Provost
from personal liability.” Id. at 1051-52.
Just as in Blue Paper, Hubbard signed the present sales contract in his personal
capacity, and nothing in the contract exempted him from personal liability. The only
evidence before the trial court that Ball agreed to bind the unformed LLC alone was
Hubbard’s affidavit and the transcript of a deposition in which Hubbard said he told
his agent that he did not want to personally sign the contract. We have already
explained why Hubbard’s affidavit contained no suggestion that Ball agreed not to
hold him personally liable. As for his deposition, Hubbard’s comment that he did
not want to personally sign the contract is of no moment as it does not speak to Ball’s
intent not to bind him. And in Ball’s deposition, he testified that he believed Hubbard
was the buyer after speaking to his agent about the contract. To be sure, Ball admitted
he was aware that the LLC had not yet been formed, as the “to-be-formed” qualifier
in the contract itself made clear. But this admission in no way suggests that Ball
agreed to bind only the LLC if Hubbard unilaterally decided not to form the LLC,
as occurred here. See Vodopich v. Collier Cnty. Devs., 319 So. 2d 43, 45 (Fla. Dist.
Ct. App. 1975) (promoter is not relieved of personal liability if the other contracting
party “merely has knowledge of the nonexistence of the corporate entity for whom
the promoter purports to act”).
23
We are thus left with open and material factual questions about whether Ball
agreed when he signed his contract with Hubbard that Hubbard would not be
personally liable under that contract. The trial court therefore erred by finding that
Hubbard was not liable as the agent of a disclosed principal as a matter of law.
III. Conclusion
For the foregoing reasons, we reverse the trial court’s grant of summary
judgment and remand for further proceedings consistent with this opinion.
So ordered.