The Name Game: Companies Can’t Hide Behind Technicalities to Avoid Judgments

June 18, 2013

Businesses routinely conduct their affairs under names other than their “official” business names. This means that sometimes the name the public associates with a particular business is not necessarily the same as the one registered with the State of Wisconsin or the IRS. The name the public recognizes is the “trade name” or the “doing-business-as” name (“d/b/a”).

Most of the time, this is not a big deal, but it can lead to issues if court records, specifically judgments, refer to the “d/b/a” name instead of the official legal name. In practice, the two different names refer to the same business, but only the official name has any legal significance. So, the question comes up: What if there is a judgment or decision against a company, but the records only refer to the “d/b/a” name, not the official one?

That’s exactly the issue that the Wisconsin Supreme Court addressed in Paul Davis Restoration of S.E. Wisconsin, Inc. v. Paul Davis Restoration of Northeast Wisconsin, 2013 WI 49. In that case, Paul Davis Restoration of S.E. Wisconsin (Southeast) won a judgment against Paul Davis Restoration of Northeast Wisconsin (Northeast) and sought to collect it. The circuit court entered a judgment in Southeast’s favor and named Northeast in the judgment. However, Northeast is the “d/b/a” name for EA Green Bay LLC, not the official name of the company. Northeast refused to pay the judgment on the grounds that the judgment did not identify an actual legal entity.

The Supreme Court dismissed that argument pretty strongly. The Court held that the “d/b/a” name is “simply another way to refer to a single legal entity.” Id., ¶ 5. Therefore, it makes no sense to try and distinguish the two names, and a judgment against the “d/b/a” name is just as enforceable as a judgment against the official legal name.

In this case, there was no mistaken identity or confusion as to who owed the debt. As the Court said, Northeast and EA Green Bay LLC are just two ways to refer to the same business. So, there was “no basis for holding that a judgment against [a ‘d/b/a’ name], indistinct from the legal entity to which it is attached, cannot be enforced against that entity.” Id., ¶ 24.

Based on the Court’s ruling, the lesson learned is pretty simple: If the business holds itself out to the public under a certain name, it shouldn’t be allowed to hide behind a technicality to avoid paying its debts. This ruling offers a straightforward rule that judgments against a company’s “d/b/a” name will be enforced in Wisconsin.

Special thanks to Axley Summer Law Clerk Micheal Hahn for his assistance with this article.

For more information about "The Name Game: Companies Can’t Hide Behind Technicalities to Avoid Judgments," contact Buck V. Sweeney at csweeney@axley.com or 608.283.6743.