Cheesecake Factory, Inc. v. Baines
New Mexico Court of Appeals
964 P.2d 183 (1998)
- Written by Robert Cane, JD
Facts
Cheesecake Factory (plaintiff) sold goods to Triples American Grill (Triples), a restaurant owned by Triple Threat, Inc., on a line of credit. Steve Mager, president of Cheesecake Factory, believed that Triples was owned by a partnership based on statements made by Frank Kolk claiming Triples was owned by Kolk, Bob Baines (defendant), and a third partner. Baines acted in a manner that indicated he was a partner in a partnership that owned Triples. Baines opened a bank account signing his name as an owner of Triples. Baines represented himself as a partner in the business, claiming he “had a sports bar” and “was a partner.” Mager testified that he relied on the belief that Triples was owned by a partnership and would not have extended credit to a corporation due to limited liability rules. Cheesecake Factory filed a lawsuit seeking to hold Baines personally liable for the debts of Triples. The district court found Baines to be a partner by estoppel based on Cheesecake Factory’s reasonable belief that Triples was owned by a partnership, not a corporation, and the district court entered judgment for Cheesecake Factory. Baines appealed to the New Mexico Court of Appeals.
Rule of Law
Issue
Holding and Reasoning (Hartz, C.J.)
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