Water, Waste & Land, Inc. d/b/a Westec v. Lanham
Colorado Supreme Court
955 P.2d 997 (Colo. 1998)
Donald Lanham and Larry Clark (defendants) were managers and members of Preferred Income Investors, LLC (PII). Clark entered into a contract with Westec (plaintiff) on Lanham’s behalf, under which Westec was to complete certain engineering work for PII. The defendants, however, never gave Westec any indication that PII was the principal in the contract, nor that PII was an LLC. When the work was complete, Westec billed Lanham, but Lanham never paid. Westec brought suit against the defendants individually as well as PII. The county court found in favor of Westec, holding that Clark was an agent of Lanham and thus dismissing Clark from the suit, but entering judgment against Lanham and PII in the amount of the outstanding bill. Lanham appealed to the Larimer County District Court, which reversed on the grounds of a statute that stated that a company’s filing of its articles of organization as an LLC is constructive notice of its status as an LLC. Westec appealed.
Rule of Law
Holding and Reasoning (Scott, J.)