## Facts

- New Horizons Supply Cooperative (New Horizons) supplied fuel through a Cardtrol program.
- On May 30, 1995, Allison Haack signed a “Cardtrol Agreement” to obtain a fuel card for “Kickapoo Valley Freight, LLC” (KVF), identifying KVF as the “patron” responsible for paying for fuel purchased with the card.
- KVF incurred charges on the account and left an unpaid balance of $1,009.99.
- In September 1997, after the account was past due, a New Horizons employee contacted Robert Koch (Haack’s brother), who referred the employee to Haack because she handled KVF’s bill paying.
- The New Horizons employee testified Haack said she would make $100 monthly payments, but no payment was received in October.
- When contacted again in October, Haack told New Horizons that KVF had dissolved; she also said she was a “partner,” that Koch had moved out of state, and that she planned to assume responsibility and begin paying $100 per month.
- During the same conversation, Haack stated she had KVF’s remaining assets, including a truck subject to a bank security interest and accounts receivable that were being collected.
- Haack later told New Horizons not to call her at work anymore.
- KVF stopped doing business, but there was no evidence that KVF filed articles of dissolution or gave statutory notice of dissolution to creditors.
- New Horizons brought a small-claims action in Grant County Circuit Court and obtained judgment against Haack for $1,009.99 plus costs.
- Haack appealed, arguing the debt was KVF’s obligation and that she was protected from personal liability as an LLC member.

## Issues

1. Can Haack avoid personal liability by asserting the fuel debt belonged solely to KVF, LLC, when KVF ceased operations without completing dissolution and creditor-notice steps?
2. Under Wis. Stat. § 183.0909(2), did Haack prove that New Horizons’ claim exceeded the value of any liquidation distribution she received from KVF?
3. May the court of appeals affirm the judgment on a statutory dissolution/distribution basis even if the circuit court relied on a different theory?

## Decision

- The Wisconsin Court of Appeals affirmed the judgment for New Horizons.
- The court assumed, without deciding, that KVF was an LLC and that the debt was incurred in the LLC’s name.
- Even on that assumption, the court held Wis. Stat. § 183.0909(2) permits creditor recovery from a member to the extent the member received liquidation distributions while the creditor remained unpaid.
- Haack did not establish at trial that New Horizons’ $1,009.99 claim exceeded the value of any liquidation distribution or liquidation assets she received or controlled after KVF stopped doing business.
- Because Haack failed to make that showing, the court affirmed her personal liability for the amount awarded.

## Legal Principles

- Limited liability for LLC members does not prevent creditor recovery where, during liquidation, members receive or retain value from the LLC while creditor claims remain unsatisfied, to the extent provided by statute.
- Under Wis. Stat. § 183.0909(2), a member who receives a liquidation distribution may be liable to the LLC’s creditors up to the value of the improper or unsatisfied distribution.
- When a member relies on limited liability to defeat a creditor’s claim after the business has ended, the member bears the burden to show facts establishing that the creditor’s judgment exceeds any liquidation distribution received (or that no distribution was received).
- An appellate court may affirm a correct judgment on a different legal ground supported by the record.

## Conclusion

The court affirmed judgment against Allison Haack for KVF’s unpaid fuel account because, even assuming KVF was a valid LLC, Haack did not show that the creditor’s claim exceeded the value of any liquidation distribution or assets she received or held after KVF ceased operations, leaving her liable under Wis. Stat. § 183.0909(2) at least up to that value.


New Horizons Supply Cooperative v. Haack, 224 Wis.2d 644, 590 N.W.2d 282 (1999) (Unpublished Disposition)