Westec v. Lanham And Preferred Income Investors, LLC

955 P.2d 997 (Colo. 1998)

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Nature of the Case

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Facts

Clark (D1), a manager at P.I.I. (D), contacted Westec (P) about the possibility of hiring P to perform engineering work. D1 gave his business card to P. The card included the address of Lanham (D2) and the letters 'P.I.I.' above the address. D2 was a manager and member of D. There was no indication as to what P.I.I. stood for or that P.I.I. was a limited liability company. An oral agreement was reached concerning P's involvement in the restaurant development project. A formal contract was sent to D2 to execute and return to P. P never received the signed contract but did get a verbal authorization from D2 to begin work. P did the work and sent a bill for $9,183.40 to D. No payments were ever made on the bill. P sued D and Clark (D1) and Lanham (D2) individually. D admitted liability and the trial court also found that P was not placed on notice that P.I.I. was a limited liability company and that D1 was an agent for D and D2. From this ruling, the court determined that P understood D1 to be an agent for D2 and therefore D1 was not personally liable. D1 was dismissed from the suit. Judgment was entered against Lanham (D2), and D. D2 appealed. The district court reversed; P was placed on notice that it was dealing with a LLC because of the initials P.I.I. on the card and the imputing of notice based on the filing of the articles of organization. The court reasoned that the notice provision as well as P's failure to investigate or request a personal guarantee relieved D2 of personal liability for claims against D.