811 F.2d 305 (6th Cir. 1987), 85-6033, Baird Ward Printing Co., Inc. v. Great Recipes Pub. Associates

Docket Nº:85-6033.
Citation:811 F.2d 305
Party Name:BAIRD WARD PRINTING COMPANY, INC., Plaintiff-Appellant, v. GREAT RECIPES PUBLISHING ASSOCIATES, and Jerang, Inc., Defendants, Jerome Shapiro, Defendant-Appellee.
Case Date:February 10, 1987
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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Page 305

811 F.2d 305 (6th Cir. 1987)

BAIRD WARD PRINTING COMPANY, INC., Plaintiff-Appellant,

v.

GREAT RECIPES PUBLISHING ASSOCIATES, and Jerang, Inc., Defendants,

Jerome Shapiro, Defendant-Appellee.

No. 85-6033.

United States Court of Appeals, Sixth Circuit

February 10, 1987

Argued Sept. 26, 1986.

Rehearing Denied April 14, 1987.

Page 306

Steven A. Riley, argued, Delta Anne Davis, Bass, Berry & Sims, Nashville, Tenn., for plaintiff-appellant.

W. Harold Bigham, Nashville, Tenn., Barbara J. Moss, argued, for defendant-appellee.

Before: MARTIN, GUY and NORRIS, Circuit Judges.

NORRIS, Circuit Judge.

Plaintiff, Baird Ward Printing Company, Inc., appeals from the district court's holding that Jerome Shapiro is not personally obligated to pay the sums called for by the printing contracts which it seeks to enforce. Plaintiff brought a breach of contract action against Shapiro, Jerang, Inc., and a New Jersey limited partnership, Great Recipes Publishing Associates. The limited partnership and Jerang, Inc. subsequently filed for reorganization pursuant to Chapter 11 and the litigation is stayed as to them.

In order to publish a monthly recipe magazine, Shapiro, as general partner, along with twenty-five limited partners, formed the limited partnership, Great Recipes Publishing Associates. The partnership agreement provided the general partner with "exclusive power and authority" to manage the business of the partnership, and included a provision authorizing Shapiro to act as the attorney-in-fact for the limited partners in a number of areas, without their consent. The agreement also provided that Shapiro could not assign his interest unless his successor as general partner assumed his partnership obligations, maintained adequate net worth, and caused itself "to be substituted properly" for Shapiro.

Acting as general partner, Shapiro negotiated a June 28, 1982 contract with plaintiff to publish the October, 1982 edition of the magazine. Plaintiff was represented in the negotiations by Louis Berizzi, a salesman employed by Arcata Graphics, plaintiff's parent corporation. The October edition was printed and mailed at a cost of $166,652.82 to the partnership.

Page 307

Concerned about his exposure to personal liability as general partner, Shapiro, on June 29, 1982, incorporated Jerang, Inc., a New Jersey corporation. Shapiro was the president and sole shareholder of Jerang. Initially capitalized with $53,000, Jerang's capitalization eventually was increased to in excess of $250,000.

An amendment to the limited partnership agreement dated July 2, 1982, substituted Jerang, Inc. for Shapiro as general partner. Shapiro signed the amended agreement as president of Jerang, as general partner, and as attorney-in-fact for each of the limited partners. He did not obtain written consent of the limited partners to execute the amended agreement.

Shapiro again negotiated with Berizzi for the printing of the November and December editions. Although he testified that he told Berizzi that he was entering this contract on behalf of Jerang, Inc., the substituted general partner of the limited partnership, Berizzi denied that he was told this. That contract and all subsequent contracts for the remaining printed issues were signed by Shapiro as president of Jerang, Inc., general partner. Shapiro also testified that he told...

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