1. Did Mr. Steen have an obligation to disclose to ICG that he was acting in a representative capacity as an agent for TN Sports, LLC, his principal?

2. Would Mr. Steen be correct in asserting that, in this day and age, listing himself as executive of Nashville Sports Leagues with an appropriate e-mail address and a thriving Web site, that state law should not allow businesses like ICG Link Inc. to feign ignorance of his limited liability business structure?

In 2003, Philip Steen formed Nashville Sports Leagues, LLC, for the purpose of providing a recreational sports league for a growing demographic of active adults in Middle Tennessee.

Mr. Steen served as the managing member of Nashville Sports until the LLC was administratively dissolved in 2004. Three years later, in January 2007, Mr. Steen registered TN Sports, LLC, with the Tennessee Secretary of State. TN Sports performed the same functions as Nashville Sports, and Mr. Steen continued to serve as the managing member. Mr. Steen also continued to do business under the name “Nashville Sports Leagues.” In correspondence, he identified himself as an executive of Nashville Sports Leagues and used an “@nashvillesports.com” e-mail address. By spring 2007, the popularity of TN Sports had grown considerably with 11,000 members on more than 175 teams. Players had their choice of six different sports with options year-round. The success of TN Sports was due at least in part to the ease of finding willing players and forming teams on the TN Sports Web site. In addition to its essential networking function, the Web site provided users with game schedules and venue information, among other details about leagues and events. In the spring of 2007, Mr. Steen moved his TN Sports Web site to ICG Link, Inc., and it recommended that Mr. Steen build a new Web site to improve functionality. However, problems existed with the new Web site. Mr. Steen had not paid invoices from March to October, and ICG employees were instructed to “slow walk” the TN Sports Web site. The parties were unable to resolve their differences, and ICG Link filed a lawsuit against the LLC, and Mr. Steen personally, for breach of contract. The trial court found there was quasi-contract liability, less the cost to repair defects, in the new Web site. It found Mr. Steen personally liable for the judgment.

JUDICIAL OPINION

CLEMENT, J.… ICG contends that Mr. Steen should be held personally liable for the obligations of TN Sports; Mr. Steen insists he is not liable. We have determined that Philip Steen is personally liable for the obligations of TN Sports because he failed to disclose the identity of his principal. It is a well-settled principle of law that, in order for an agent to avoid personal liability on a contract negotiated on behalf of the agent’s principal, “the agent must disclose not only the fact of the agency, but also the identity of the principal.” (citations omitted)

Although it is clear from the proof that Mr. Steen intended to bind TN Sports, LLC, when he was doing business with ICG in 2007 and 2008, Mr. Steen conducted business under the name of “Nashville Sports Leagues,” not TN Sports. Although Nashville Sports Leagues, LLC, was properly organized, it was administratively dissolved in 2004, long before ICG came into the picture and it was never reinstated. As the trial court found, Mr. Steen ………………….