On May 10, 2023, the Second Department issued a decision in Y.B. Assoc. Group, LLC v. Rubin, 2023 NY Slip Op. 02558, holding that an LLC member was not liable for an LLC’s obligations under an agreement the member had signed on behalf of the LLC, explaining:
A member of a limited liability company cannot be held liable for the company’s obligations by virtue of his or her status as a member thereof. An agent executing a contract on behalf of a disclosed principal is not liable for a breach of the contract unless it clearly appears that he or she intended to bind himself or herself personally. There must be clear and explicit evidence of the agent’s intention to substitute or superadd his [or her] personal liability for, or to, that of his or her principal. The obligation of a guarantor is, admittedly, a heavy one, and the courts should refrain from foisting such an obligation upon a party, be he or she individual or corporation, who simply signs as agent, absent the requisite clear and unequivocal evidence, to be gathered from the writing itself, that he or she intended to assume such a liability. There is great danger in allowing a single sentence in a long contract to bind individually a person who signs only as a corporate officer.
Here, paragraph 68 of the 70-paragraph lease refers to an obligation incurred by the undersigned. Nowhere in the lease is Rubin, individually, or anyone else, identified as the undersigned. Instead, Rubin’s name appears only on the signature page of the lease, where he has signed as a managing member, on a line clearly designated to bind the tenant to the terms of the lease. There is no second signature by Rubin clearly pertaining to the purported personal guaranty clause, as distinguished from Rubin’s execution of the lease on behalf of the tenant. The tenant is unambiguously defined, in both the body of the lease and on the signature page, as Mount Vernon Social Adult Day Care Center, LLC. Accordingly, this is not a case of an individual merely adding his or her corporate title while signing a document that contains language in the body of the agreement identifying such person as an individual guarantor.
(Internal quotations and citations omitted).