Sunday, November 24, 2013

Water, Waste & Land, Inc. d/b/a Westec v. Lanham case brief

Water, Waste & Land, Inc. d/b/a Westec v. Lanham case brief summary
955 P.2d 997 (Colo. 1998)

Petitioner was a land development and engineering company doing business under another name. The engineering company was not paid for its work for the respondent, a limited liability company (LLC) and brought a cause of action in the county court against respondent individually and against the LLC. The county court entered judgment in favor of the engineering company and the district court reversed.


  • The court decided that the members or managers of a limited liability company (LLC) were excused from personal liability on a contract where the other party to the contract did not have notice that the members or managers were negotiating on behalf of a limited liability company at the time the contract was made. 
  • The county court had found that the party dealing with the members or managers was unaware that they were acting as agents of a limited liability company when they negotiated the contract, and the evidence in the record supported the county court's findings, hence there was no legal basis to excuse the agents of the LLC from liability. 
  • The court held that the statutory notice provision applied only where a third party sought to impose liability on an LLC's members or managers simply due to their status as members or managers of the LLC. 
  • When a third party sued a manager or member of an LLC under an agency theory, the principles of agency law applied notwithstanding the Limited Liability Company Act's statutory notice rules. 
  • The district court erred in substituting its own factual determinations for the findings of the county court.

The judgment of the district court was reversed and the case was remanded to that court with instructions that it reinstate the judgment of the county court.

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