November 5, 2013
Authored by: Luke Lantta
In Georgia and in many states, when someone puts on his or her “trustee hat,” he or she becomes a different person. Courts and litigants often conflate the two, but, in STC Two, LLC v. Shuman-Weiner, the Georgia Court of Appeals reminded us that in Georgia a person’s representative capacity and individual capacity are separate.
In this case, a trust and an LLC jointly owned real property. One of the co-trustees of the trust and the sole member and registered agent for the LLC, in their individual capacities, entered into certain agreements regarding that property. One of these disputed agreements was non-binding on the trust for a number of reasons, including because the agreement was entered into by the co-trustee in her individual capacity and because the trust’s other co-trustee received no consideration for the agreement. The appellate court quoted another Georgia case for the proposition that “a person’s individual and representative capacities may not be substantially identical.”
One of the practical applications of this maxim is, of course, to make sure that you clearly denote the capacity of a signatory acting in a representative capacity.