34.4 Successor Liability. In 1996, Robert McClellan, a licensed contractor doing business as McClellan Design and Construction,

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34.4 Successor Liability. In 1996, Robert McClellan, a licensed contractor doing business as McClellan Design and Construction, entered into a contract with Peppertree North Condominium Association, Inc., to do earthquake repair work on Peppertree’s seventy-six-unit condominium complex in Northridge, California. McClellan completed the work, but Peppertree failed to pay. In an arbitration proceeding against Peppertree to collect the amount due, McClellan was awarded $141,000, plus 10 percent interest, attorneys’ fees, and costs. McClellan filed a suit in a California state court against Peppertree to confirm the award. Meanwhile, the Peppertree board of directors filed articles of incorporation for Northridge Park Townhome Owners Association, Inc., and immediately transferred Peppertree’s authority, responsibilities, and assets to the new association. Two weeks later, the court issued a judgment against Peppertree. When McClellan learned about the new association, he filed a motion asking the court to add Northridge as a debtor to the judgment. Should the court grant the motion? Why or why not? [McClellan v. Northridge Park Townhome Owners Association, Inc., 89 Cal.App.4th 746, 107 Cal.Rptr.2d 702 (2 Dist. 2001)]

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Business Law Today Comprehensive

ISBN: 9780324595741

8th Edition

Authors: Roger LeRoy Miller, Gaylord A Jentz

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