Case 7: Treadwell v. J.D. Construction Co., 938 A.2d 794 (Me. Sup. Jud. Ct. 2007) (Mallor,
16th Ed., p. 976)
In the early 1990s, Jesse Derr created a corporation, JCDER, Inc., to operate his construction
business. At some point, Derr began referring to the corporation as J.D. Construction Co., Inc.,
but no corporation by that name was ever created. JCDER, Inc., remained the official name for
purposes of organization and filing with Maine’s Secretary of State. Derr never filed with the
Secretary of State a statement of intention to do business under the assumed name J.D.
Construction Co., Inc.
In 2003, when Leah and William Treadwell decided to build a home, they were referred to Derr.
The Treadwells brought their home plans to Derr’s office to get a quote and left the plans with an
employee, Jane Veinot. They did not meet with Derr, but received a quote from him in the mail.
Soon after, the Treadwells signed a contract with J.D. Construction, with work to start in May
2003. Derr signed the contract, and his signature appeared on the contract as follows:

J.D. Construction Co., Inc.
By: Jesse Derr
The name JCDER, Inc., was nowhere in the contract, and the Treadwells were unaware of the
existence of JCDER, Inc., when they signed the agreement. None of the documents the
Treadwells received from J.D. Construction indicated that the company’s real name was JCDER,
Inc.
Mr. Treadwell testified that he spoke with Derr twice at the worksite, just as they were breaking
ground. The Treadwells, who visited the site almost daily, never saw Derr again, even though
they tried many times to contact him. They spoke to Veinot often, but she would tell them that
Derr was at another construction site. Derr had hired subcontractors to do the work on the
Treadwells’ property. Around Thanksgiving 2003, the Treadwells visited the site and found that
Derr had abandoned the job with the house unfinished because the company was not making any
money on the job. The Treadwells had paid Derr approximately $91,000 before construction
halted.
The Treadwells found many problems with the structure, including twisted studs and other
lumber that had to be replaced. The Treadwells hired new contractors to fix and finish the
project, for which they paid a significant sum.
To recover the additional costs, the Treadwells sued J.D. Construction Co., JCDER, Inc., and
Derr for breach of contract and other grounds. The trial court awarded the Treadwells damages
against J.D. Construction Co., Inc., and JCDER, Inc., but found that Derr was not personally
liable for the damages. The Treadwells appealed to the Supreme Judicial Court of Maine, asking
that Derr also be held liable.
1. The trial court was correct in finding Derr was not personally liable for the
damages suffered by the Treadwells, because the Treadwells hired J.D.
Construction Co., Inc. to construct the home.
2. Treadwells’ judgment against J.D. Construction Co., Inc. can be used to initiate a
collection action against Derr.
3. Derr is personally liable for the failure of the subcontractors to complete the
construction work properly.
4. If Treadwells had hired JCDER, Inc. to construct the home, Derr can nonetheless
be held personally liable for the failure of the subcontractors to complete the
construction work properly, if there are insufficient assets in JCDER, Inc. to pay
the judgment entered in favor of the Treadwells.
5. If the Treadwells contracted with JCDER, Inc. to construct the house, JCDER,
Inc. is a totally disclosed principal.

Answer Questions 1-5 with true or false answers and an explanation to support your answer.