June 4, 2013 – Judgments that designate a business by its trade name are still enforceable, even though the underlying legal entity is not named in the judgment.
That’s what the Wisconsin Supreme Court recently ruled in Paul Davis Restoration of S.E. Wisconsin Inc. v. Paul Davis Restoration of Northeast Wisconsin, 2013 WI 49 (June 4, 2013), a franchise territory dispute to enforce a judgment by garnishment.
A near unanimous court, deciding this issue for the first time, concluded that “an otherwise valid judgment can be enforced against a legal entity when the judgment is entered against the name under which the legal entity does business.”
EA Green Bay LLC was “doing business as” Paul Davis Restoration of Northeast Wisconsin when a franchise dispute erupted. Ultimately, Paul Davis Restoration of S.E. Wisconsin won a $101,693 arbitration award against the northeast franchise.
A circuit court affirmed the arbitration award by judgment entered against Paul Davis Northeast. Paul Davis Southeast then sought to enforce the judgment through a bank account garnishment action.
Paul Davis Northeast argued the judgment was unenforceable, because the judgment was not entered against EA Green Bay LLC, the bank account holder.
However, the supreme court held:
“[I]f the name under which a person or corporation does business is ‘simply another way to refer to’ a single legal entity and constitutes no entity distinct from the person or corporation who does business, then a judgment against the ‘doing business as’ or ‘d/b/a’ name is enforceable against the legal entity from which it is distinct.”
Justice Patience Roggensack wrote a concurring opinion, agreeing with the ultimate conclusion but reasoning that Paul Davis Northeast was judicially estopped from challenging the garnishment because of prior inconsistent statements.
In arguments before the circuit court, counsel for Northeast argued that EA Green Bay LLC should not be added a defendant, despite opposing counsel’s argument that a judgment not identifying the underlying legal entity could be worthless.
