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Boyden v. HLS II, LLC

United States District Court, E.D. Pennsylvania

July 2, 2019

GREGG BOYDEN
v.
HLS II, LLC and ALICE CUMMINGS

          MEMORANDUM OPINION

          Savage, J.

         In this non-jury case, the issue is whether the signatory to a promissory note signed it in her individual capacity or as a representative of the limited liability company of which she was a member and an officer. After considering the evidence and the findings of fact, we conclude that she signed in her representative capacity.

         Facts

         Plaintiff Gregg Boyden, a New Jersey resident, invests in large multi-family properties in need of repairs.[1] His personal and business acquaintance, defendant Alice Cummings, a Virginia resident, is a vice president, limited partner, and twelve percent owner of defendant HLS II, LLC (HLS).[2] HLS, a Virginia limited liability company, is a single purpose entity formed to purchase and develop a 254-unit property in Philadelphia.[3]

         On December 11, 2017, Cummings telephoned Boyden and requested a loan of $100, 000.00 as an earnest money deposit for HLS's purchase of the property.[4] Boyden agreed to loan the money and requested a document evidencing the loan.[5] Three days later, Cummings forwarded Boyden a “Promissory Note” (Note).[6] The Note listed the Borrower as “HLS II, LLC - Alice Cummings” with the Borrower's mailing address as 31 N. Providence Road, Richmond, VA 23235, the address of HLS.[7] It provided that “the undersigned jointly and severally promise to pay” the loan.[8] On the second page, Cummings signed her name in one place:

_HLSII, LLC __ (entity)
Alice Cummings
Alice Cummings
By: __Alice Cummings __
Its: __Vice President, HLSII, LLC__ [9]

         Upon receipt of the Note, Boyden wired $100, 000.00 to FirstTrust Bank for deposit into the account of Cross Prop, LLC, the seller of the property HLS was purchasing.[10]

         The loan was payable on December 28, 2017.[11] On June 8, 2018, with the loan still unpaid, Boyden mailed a letter addressed to HLS, to the attention of its president, Orlandus Branch, and a copy to Cummings, “demanding payment in full of the loan I made to HLS II, LLC . . . .”[12] No. payments pursuant to the Note have been made.[13]

         Analysis

         Where a promissory note contains an unconditional promise to pay a fixed amount of money to order at a definite time and does not require the promisor to perform any act in addition to the payment of money, it is a negotiable instrument. See 13 Pa. C.S.A. § 3104(a). A note is payable “to order” where it is payable to an identified person rather than the bearer. Id. § 3109(b). Here, the Note required only that the borrower, “HLS II LLC - Alice Cummings, ” pay $100, 000 ...


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