Estate Of Collins v. Geist

153 P.3d 1167 (2007)

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Nature of the Case

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Facts

Michael Collins and Purcell formed a limited liability company named CBS of Idaho, L.L.C. They did so at the request of E. A. Collins, Michael's father. The articles of organization stated that management of the company would be vested in managers, and it named Michael and Purcell as the initial managers. E. A. Collins owned a business in Nevada named Collins Building Systems that built steel and Styrofoam houses. CBS of Idaho was formed to market steel and Styrofoam houses in Idaho. Michael Collins filed articles of amendment to the articles of organization of CBS of Idaho. The articles of amendment changed its name to Kanaka Rapids Ranch, L.L.C. (Kanaka Rapids), removed Purcell as a manager and added E.A. Collins as a manager. Collins Brothers Corporation, a Nevada Corporation, deeded to Kanaka Rapids various parcels of real property located in Twin Falls County, Idaho. The transfer was done in consideration for the corporation redeeming all of the stock owned by E. A. Collins. The sole purpose of Kanaka Rapids was to develop and sell that property. From November 2, 2000, through September 10, 2001, Michael Collins executed deeds on behalf of Kanaka Rapids conveying various lots. Ds purchased those lots. On January 11, 2001, E. A. Collins died. His estate had assets of $2.5 million and debts totaling almost $35 million. P commenced this action on its own behalf and on behalf of Kanaka Rapids seeking to set aside the deeds of the Ds. P contends that Michael was not a manager of Kanaka and did not have authority to act. The court ruled that Michael has apparent authority. The district court granted Ds' motions for summary judgment and entered judgments dismissing this action as to them. P appealed.