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The plaintiff, Smith, is a United States Marine Corps veteran. He suffers from schizophrenia,
posttraumatic stress disorder, and depression, and he is functionally illiterate. Smith was living
out of his car and working as a trash collector when he was the victim of a fraud scheme. Smith
was approached by a participant in the scheme about a special investment program that would
not require him to invest any money. He agreed and two real estate purchases were orchestrated
in Smiths name using a false financial profile of his income, assets, and work and renting history.
Smith began receiving phone calls about missed mortgage payments and the properties
subsequently went into foreclosure. Smiths mental health deteriorated further and his ruined
credit history prevented him from renting an apartment. Smith brought suit against the associate
who handled the real estate closing and the firm he worked for, RKelley Law, PC, and Robert
Kelley, personally. Judgment entered against the PC, but the court dismissed the case against
Kelley for personal liability. At all times, Kelley was the sole shareholder of the PC. The day
after the judgment was entered against the PC, Kelley voted to wind up the corpo-ration. He
immediately opened a sole proprietorship called Law Office of R. Emmett Kelly. He used the
same office and had the same clients as under the PC. Smith brought suit to hold the sole
proprietor-ship liable as a successor corporation to the PC. In deposition testimony, Kelley was
asked whether he dissolved the PC because of the judgment. Kelley testified, That is exactly why
I dissolved it.
Is the sole proprietorship liable for the judgment against the PC? [Smith v. Kelley, 139 N.E.3d
314 (Mass.)

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The plaintiff, Smith, is a United States Marine Corps veteran. He su.pdf

  • 1. The plaintiff, Smith, is a United States Marine Corps veteran. He suffers from schizophrenia, posttraumatic stress disorder, and depression, and he is functionally illiterate. Smith was living out of his car and working as a trash collector when he was the victim of a fraud scheme. Smith was approached by a participant in the scheme about a special investment program that would not require him to invest any money. He agreed and two real estate purchases were orchestrated in Smiths name using a false financial profile of his income, assets, and work and renting history. Smith began receiving phone calls about missed mortgage payments and the properties subsequently went into foreclosure. Smiths mental health deteriorated further and his ruined credit history prevented him from renting an apartment. Smith brought suit against the associate who handled the real estate closing and the firm he worked for, RKelley Law, PC, and Robert Kelley, personally. Judgment entered against the PC, but the court dismissed the case against Kelley for personal liability. At all times, Kelley was the sole shareholder of the PC. The day after the judgment was entered against the PC, Kelley voted to wind up the corpo-ration. He immediately opened a sole proprietorship called Law Office of R. Emmett Kelly. He used the same office and had the same clients as under the PC. Smith brought suit to hold the sole proprietor-ship liable as a successor corporation to the PC. In deposition testimony, Kelley was asked whether he dissolved the PC because of the judgment. Kelley testified, That is exactly why I dissolved it. Is the sole proprietorship liable for the judgment against the PC? [Smith v. Kelley, 139 N.E.3d 314 (Mass.)