Case study help?

Scenario:

George Flynt and Stan Hefner were the only two members of Sunshine Landscaping, LLC, a limited liability company organized for the purpose of providing lawn care and landscaping services. Stan regularly took care of all the finances for the company, and George regularly performed the work for clients, though neither had specific duties. George met with clients, quoted them fees, obtained all the tools and products necessary to perform the job, and completed the service for the client. Stan paid the bills and invoiced clients, but sometimes when Stan was on vacation, George would take over the finances while he was away. However, when George was on vacation, the business would be closed for the week because Stan did not want to perform the service work himself.

Sunshine Landscaping had regular accounts with all the local plant nurseries. Normally, George would place an order for plants, Sunshine Landscaping would be invoiced by the nursery, and then Stan would pay the invoice. One day Mary, a customer of Sunshine Landscaping, asked the company to remove from her property a large tree which was touching some power lines. George surveyed the property and could see that, indeed, the tree was dangerously close to the power lines and, because the houses were so close together, there was no place for the tree to fall if he cut it down. He knew the job would be too big for Sunshine Landscaping and would require special skill which neither he nor Stan had. He considered advising Mary to contact a tree removal company, but then decided to accept the job, hire a tree removal company as a subcontractor, and then up charge Mary 10 percent for acting as the general contractor.

He emailed Tree Down, a company specializing in tree removal, via the companys contact form online. George provided his cell phone number, his business email address, and stated I need to get a quote to have a tree removed at 203 Main Street. Please provide me with an estimated cost.

That afternoon, Tree Down sent George the following estimate:

Eager to get the project underway, George signed the estimate George Flynt above the customer signature line and immediately emailed it back to the company. George called Mary to tell her the cost would be $4,400, and Mary immediately put a check in the mail to Sunshine Landscaping for the full amount. Several days later, Tree Down cut down the tree, hauled it away, and invoiced George Flynt at the email address he provided on the contact form. George printed the email and invoice and then handed it to Stan. Stan put the invoice on a pile of other bills without looking at it.

Several weeks later, Stan proposes to George, We have so many bills for the business, and we arent making enough to pay them and pay ourselves a decent amount. Lets just file for bankruptcy for this business. We can get out of paying all these bills and then start a new landscaping company.

George disagreed with Stans proposal and disliked how Stan handled business matters generally, so George decided to withdraw as a member of the LLC. There was no operating agreement in place for the management of the LLC, so George and Stan decided to write a separation agreement as follows:

A month goes by and having not yet been paid, Tree Down initiated an action against George Flynt, personally, for $4,000. Upset, George starts researching the law and discovers the following state statute:

301 Each member of a Limited Liability Company is an agent of the company for the purpose of its business and the members acts for apparently carrying on in the ordinary course of the companys business binds the company, unless the member lacked the authority to act and the third party knew or should have known that the member lacked authority.

Who are the possible parties that can be liable for the money owed to Tree Down? (SELECT ALL THAT APPLY.)

a. George

b. Stan

c. Sunshine Landscaping, LLC.

d. Mary

If Sunshine Landscaping, LLC, had regularly contracted with Tree Down, LLC, to perform tree removal services for customers, then, from the perspective of Tree Down, George's action to contract for the tree removal at 203 Main Street would be an example of?

a. apparent authority

b. implied authority

c. express authority

d. none of these are correct.

Assume that a state does not require LLCs to publish their operating documents publicly. How might this impact a third-parties' (like Tree Down) right to recover contract damages from a LLC if the member's (such as George or Stan) authority to bind the company was rescinded in a non-published operating agreement?

a. If the member tells Tree Down that he has express authority, the LLC will be bound by his acts.

b. Even if the member is an unauthorized agent, Tree Down's reasonable belief based on the conduct of the member is sufficient to bind the LLC.

c. Tree Down should take additional steps to ensure members claiming to act on behalf of a LLC have actual authority, if they want to be able to recover contract damages from the LLC.

d. The LLC can never be held liable for the acts of an unauthorized agent.

Assume that, after George received the invoice from Tree Down, he went ahead and paid it out of company funds to which he had access, rather than handing it to Stan. This is an example of:

a. express authority

b. implied authority

c. apparent authority

d. None of these are correct.

TREE Down LLC 123 MAIN STREET ANYTOWN, OH 12345 ESTIMATE FOR WORK Uwe Extmate George Fyn 123) 456-7890 georgesando com Service Remover of a tree et 20 Main St Elmate S4000 S4000 Estimate Total USD S4000 noch Customer Serh Knoch, Owner Tree Down, LLC Separation Agreement George Flynt and Stan Hefner, the only members of Sunshine Landscaping, LLC do hereby agree to the following: 1. As of June 15, 2017 George Flynt withdraws as a member of Sunshine Landscaping, LLC; 2. Sunshine Landscaping, LLC agrees to indemnify George Flynt against any trade creditor liability Gemattant Sublogue George Flynt Stan Hefner NTHENOS LE