Friday, November 22, 2013

Taghipour v. Jerez case brief

Taghipour v. Jerez case brief summary
52 P.3d 1252 (2002)


CASE SYNOPSIS
Appellants, members and limited liability company, filed suit against appellees, manager and financial corporation, for declaratory judgment, negligence, and partition of the various interests in real property at issue. The Utah Court of Appeals affirmed the trial court's grant of the finance corporation's motion to dismiss. The members and the LLC filed a writ of certiorari and sought review of the court of appeal's decision.

CASE FACTS
The members formed the LLC with the manager. The manager entered into an agreement on behalf of the LLC with the finance corporation. Pursuant to the agreement, the finance corporation lent the LLC $ 25,000, and as security for the loan, the manager executed and delivered a trust deed that conveyed the LLCs real estate property to a trustee with the power to sell the property in the event of default. After receiving the money, the manager misappropriated the funds, and absconded with the money. The manager never made a payment and the members were unaware of the loan, and the finance corporation foreclosed on the property. Only the manager was notified of the default or pending foreclosure sale.

DISCUSSION

  • The state supreme court affirmed the decision of both the district court and the court of appeals and held that the action was governed by Utah Code Ann. § 48-2b-127(2) (1998) as opposed to Utah Code Ann. § 48-2b-125(2)(b), that provided that a manager's authority to bind a limited liability company could be limited by the operating agreement. 
  • Utah Code Ann. § 48-2b-127(2) (1998) dealt specifically with the types of documents a manager could execute on behalf of the members and the LLC.
CONCLUSION
The decision of the court of appeals was affirmed.

Recommended Supplements for Corporations and Business Associations Law

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