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Contract – Damages – Car Restoration – Cost to Repair Defendants’ Work – Individual Liability

Contract – Damages – Car Restoration – Cost to Repair Defendants’ Work – Individual Liability

Maitra v. Quarter Mile Muscle, Inc. (Lawyers Weekly No. 012-099-17, 15 pp.) (Lucy Inman, J.) Appealed from Iredell County Superior Court (Mark Klass, J.) N.C. App. Unpub.

Holding: While plaintiff only paid defendants $66,038.49 for their attempts to restore the 1951 Pontiac Chieftain she had inherited, the jury’s $156,038.49 award was supported by the evidence: Trial testimony established that as much as 90 percent of the work done by defendants would have to be redone and that the vehicle would require substantial repairs simply to return it to the condition it was in prior to defendants’ poor quality work; additionally, defendant Klitz himself testified that a “full frame-off restoration” of the vehicle could have cost up to $200,000. Based on this evidence, it would have been reasonable for the jury to infer that plaintiff was entitled to up to $200,000 in consequential damages. Therefore, when viewed in the light most favorable to plaintiff, the evidence is more than sufficient to support an award for direct and consequential damages totaling $156,038.49.

We affirm judgment for plaintiff against the corporate defendant and defendant Klitz, personally.

If a corporate officer enters into a contract with a third party for the officer’s own benefit, the corporate officer may not use the corporation name as a shield to personal liability. Although defendant Klitz signed the contract with plaintiff on behalf of the corporation, when he bought a car – a Corvette – to use its engine to replace the Chieftain’s engine, he titled the Corvette in his own name.

Evidence at trial established that (1) Klitz had a personal interest in Corvettes; (2) Klitz suggested a Corvette engine be used for a replacement, even though such an engine was inappropriate and would render the Chieftain unsafe; (3) Klitz titled the donor Corvette in his own name; and (4) parts were removed from the donor Corvette without plaintiff’s permission. This evidence would allow a reasonable trier of fact to find that Klitz entered into the contract for his own personal benefit, thus precluding him from using the corporation as a shield against personal liability.



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