Non-Existent Corporation Cannot Sue on Contract

In 2005, Dibon Solutions acquired 100% of RTS’s common stock. In 2006, the Texas Secretary of State ordered the forfeiture of RTS’s charter or certificate of authority for failure to comply with the tax code. In 2007, Martinair contracted with RTS for use of RTS’s profit optimization products and related services. Martinair later terminated its agreement with RTS, and RTS sued Martinair for breach of contract, identifying the plaintiff as RTS, “a corporation organized under the laws of the State of Texas.”

Martinair filed a motion for summary judgment against RTS, arguing RTS’s forfeiture of its corporate existence in 2006 deprived it of legal authority and capacity under Texas law to enter into the Agreement upon which it sued Martinair, which the trial court granted in part. The trial court also struck RTS’s amended petition, which had purported to substitute RTS’s parent corporation, Dibon, as the plaintiff. On appeal, Dibon argued the trial court erred in striking its amended petition. The Court of Appeals disagreed, and affirmed the trial court’s ruling. Rule 28 permits a partnership doing business under an assumed name to file suit in that name. However, Dibon failed to make a showing that it actually conducted business under the name RTS, thus its amended petition was improper.

Dibon Solutions, Inc. v. Martinair Holland N.V., No. 05-11-01586-CV