Water, Waste & Land, Inc., D/B/A Westec, v. Lanham

955 P.2d 997 (1998)

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Nature of the Case

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Facts

P is a land development and engineering company doing business under the name 'Westec.' D and Larry Clark (D1) were managers and also members of Preferred Income Investors, L.L.C. (LLC). LLC is a limited liability company organized under the Colorado Limited Liability Company Act. D1 contacted Westec about the possibility of hiring it to perform engineering work in connection with a development project which involved the construction of a fast-food restaurant known as Taco Cabana. D gave his business card to representatives of Westec. The LLC's name was not on the business card; the letters 'P.I.I.' appeared above the address on the card. There was no indication as to what the acronym meant or that P.I.I. was a limited liability company. Westec eventually sent D a form of contract, which D was to execute and return to Westec. Although Westec never received a signed contract, in mid-August it did receive verbal authorization from D1 to begin work. Westec completed the engineering work and sent a bill for $9,183.40 to D. No payments were made on the bill. Westec filed a claim in county court against D and D1 individually as well as LLC. LLC admitted liability for the amount claimed by Westec. The county court entered judgment in favor of Westec. The county court found that it was 'unknown' to Westec that D had organized the Company as a limited liability company and the letters 'P.I.I.' on D1's business card were insufficient to place Westec on notice that the Company was a limited liability company. The court found that D1 an agent of both D and LLC with 'authority to obligate both. Westec 'did not have knowledge of any business entity' and only dealt with D and D1 'on a personal basis.' It also found that Westec understood D1 to be D's agent and therefore 'D1 is not personally liable.' The dismissed D1 from the suit, concluding he could not be held personally liable, and entered judgment in the amount of $9,183 against D and the LCC. D appealed. The district court reversed. If found that Westec was placed on notice that it was dealing with a limited liability company based on two factors: (1) the business card containing the letters 'P.I.I.'; and (2) the notice provision of section 7-80-208 of the LLC Act. Section 7-80-208 provides that the filing of the articles of organization serve as constructive notice of a company's status as a limited liability company.