Question

Lawrence incorporated Lawrence Concrete, Inc., in Oregon, but did not file its first annual report, so the state involuntarily dissolved the firm in 1995. Unaware of the dissolution, Lawrence continued to do business as Lawrence Concrete, In 2001, he signed a written contract with Carl Carson to form and pour a certain amount of concrete on Carson's property for $19,810. Carson was in a rush to compete the entire project and he and Lawrence orally agreed to additional work on a time-and materials basis.  When scheduling conflicts arose, Carson had his own employees set some of the forms, which proved deficient. Carson also directed Lawrence to pour concrete in the rain, which undercut its quality. Mid-project, Lawrence submitted an invoice for $15,500, which Carson paid. After the work was complete, Lawrence billed Carson for $25,200, but he refused to pay, claiming the $15,500 was for the entire project.  To recover the unpaid amount, Lawrence filed a mechanic's lien as "Harry Lawrence d/b/a Lawrence Concrete, Inc." against Carson's property. Carson filed a suit to strike the lien, and Lawrence field a counterclaim.  Before the trial, Carson asked for a change of venue on the ground that a sign on the courthouse lawn advertised "Lawrence Concrete." How might the sign affect a trial on the parties' dispute? Should the court grant this request?  Carson asked the court to dismiss the counterclaim on the ground that the state had dissolved Lawrence Concrete in 1995. Lawrence immediately filed new articles of incorporation for "Lawrence Concrete, Inc." Under what doctrine might the court rule that Carson could not deny the existence of Lawrence Concrete? What ethical values underlie this doctrine? Should the court make this ruling? At the trial, Carson argues, in part, that there was no "fixed price" contract between the parties and that even if there was, the poor quality of the work, which required repairs, amounted to a breach, excusing Carson's further performance. Should the court rule in Carson's favor on this basis? Please, explain your answer.

Answer 1

The court might not grant a change of venue based on a courthouse lawn sign advertising 'Lawrence Concrete.' Under the de facto corporation doctrine, Lawrence can argue that his business activities justify recognition of the corporation despite its dissolution. Carson's claim of no fixed-price contract and breach due to poor work quality would require the court to scrutinize the agreements and workmanship to decide.

Step-by-step explanation:

The presence of a sign advertising "Lawrence Concrete" on the courthouse lawn may lead to concerns about potential bias or the appearance of partiality in the legal proceedings. However, whether the court should grant a change of venue depends on the perceived influence on the jury or the proceedings, and a simple advertisement may not necessarily justify such a move.

Concerning the dissolution of Lawrence Concrete, the de facto corporation doctrine may allow Lawrence to argue that the company should be treated as if it were properly incorporated due to its operations and dealings with third parties. This doctrine promotes ethical values such as fairness and estoppel, preventing parties from denying an entity's existence after having acknowledged it by their actions.

Regarding Carson's claim that the contract's terms were not fixed and the poor quality of work constituted a breach, the court will likely evaluate the specifics of the oral agreements, the initial written contract, and the evidence of the actual work quality. If Carson can demonstrate that the quality of work was indeed poor due to Lawrence's actions, it could justify not paying the remaining balance.