Water, Waste & Land, Inc. was a land development and

Water, Waste & Land, Inc. was a land development and engineering company doing business under the name “Westec.” Donald Lanham and Larry Clark were managers and also members of Preferred Income Investors, L.L.C. (P.I.I.), a limited liability company organized under the Colorado Limited Liability Company Act (the LLC Act).

In March 1995, Clark contacted Westec about the possibility of hiring Westec to perform engineering work in connection with the construction of a fast-food restaurant known as Taco Cabana. In the course of preliminary discussions, Clark gave his business card to representatives of Westec. The business card included Lanham’s address, which was also the address listed as P.I.I.’s principal office and place of business in its articles of organization filed with the secretary of state. Section 7-80-208 of the LLC Act provides that the filing of the articles of organization serves as constructive notice of a company’s status as an LLC.

Although the name Preferred Income Investors, L.L.C. was not on the business card, the letters “P.I.I.” appeared above the address on the card. There was, however, no indication as to what the acronym meant or that P.I.I. was an LLC.

Although Westec never received a signed contract from Lanham, in mid-August it did receive verbal authorization from Clark to begin work. Westec completed the engineering work and sent a bill for $9,183.40 to Lanham. No payments were made on the bill. Westec filed a claim in county court against Clark and Lanham individually as well as against P.I.I. Are Clark and Lanham personally liable to Westec? How might Clark, Lanham, and Westec have avoided this dispute? [Water, Waste & Land, Inc. v. Lantham, 955 P.2d 997 (Colo. 1998) (en banc).]


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