Weinstein v. Colborne Foodbotics, LLC: A Difference Between a Corporation and an LLC

Now that it is July, I am circling back to the topic of company start-up and entity structure issues.  In January and February, I highlighted several of the types of business entities:

Business Legal Entities and Structures: Sole Proprietorship
Business Structure and Entities: General Partnerships
Business Structures and Entities: Limited Partnerships
Business Structures and Entities: Limited Liability Companies (LLCs)
Business Structures and Entities: S Corporation
Business Structures and Entities: C Corporation

Today, I will highlight a significant difference between LLCs and Corporations in the context of a […]

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General Overview Regarding Sources of Business Risk of Liability to Third Parties

This month of May, we will be addressing various issues related to operational issues for businesses.  This post will give an overview of the primary sources of risk an average business is subject to as it relates to third parties.

Taking a page from one of my favorite authors, C.S. Lewis, there are too equal and opposite errors for businesses.  The first extreme is the business which ignores potential liabilities to third parties as either extremely remote, or non-existent.  The other […]

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Employer Can Terminate Employee for Medical Marijuana Use and Application of the Lawful Activity Statute, C.R.S. 24-34-402.5

The Lawful Activities Statute, C.R.S. 24-34-402.5

One of the exceptions to the general rule that an employer can terminate an at-will employee at any time for any reason as mentioned in an earlier post, Employees and Independent Contractors: The Basic Framework, is the statutory protection of an employee’s legal off-duty activities.  Under the Lawful Activities Statute, C.R.S. 24-34-402.5, with certain specific exception to the exception, an employee who is terminated due to the employee engaging in any lawful activity off the […]

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Have You Been Served? Don’t Bury Your Head in the Sand!

You’re at home making dinner and the doorbell rings.  You answer the door and someone you don’t recognize is there.  When you open the door, they ask you a simple question: “Are you Jane Smith?”  You say yes, and they hand you some papers and turn to leave.  After you close the door, you look at the documents and they seem formal and foreign.  At the top is often a set boxes with a court address, names of parties, and […]

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The Waters are a Bit Muddier with the Ferguson Decision on Mechanic’s Liens Relating Back to First Work

In the recent case of Ferguson Enterprises, Inc. v. Keybuild Solutions, Inc., Case No. 10CA2234, December 22, 2011, the Colorado Court of Appeals addressed a situation regarding the priority of mechanic’s liens.
 
Backround Summary

To understand the situation, one must understand that mechanic’s liens for certain improvements to a property such as new construction have priority over other earlier liens or mortgages on the land.  CRS 38-22-103(2).  However, a lien for a construction loan which is taken out to do the improvements […]

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Update on LLC Operating Agreement Case Condo v. Conners

On July 7, 2010, I wrote a post entitled LLC Operating Agreement Controls Assignment of Membership Interest.  In the post I discussed the Condo v. Conners, No. 09CA1130 opinion in which the Colorado Court of Appeals agreed with the trial court that an assignment by a member to his ex-spouse of member distribution rights contrary to the Operating Agreement was void.

As I described before, in the case, one of the members of an LLC assigned his membership interest (in the […]

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Enforceability of Web-based Terms of Sale

An article by Business Law Today from September talks about the enforceability and use of terms of sale which are based on a website entitled “Do Web-based Terms of Sale Work? Only through Incorporation by Reference”.  When a business engages in a sale they engage in a contract.  Sometimes the buyer signs a written contract, sometimes they affirmatively click through an option which states they agree to the purchase.  However, a contract can be as simple as an agreement that […]

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New Legislation Passed into Law Regarding Mechanic’s Liens

In Weize Co., LLC v. Colorado Regional Construction, Inc., No. 09CA1369, the Colorado Court of Appeals held that a plumber’s claim to foreclose on a mechanic’s lien had to be dismissed because of the plumber’s failure to file a lis pendens or notice of commencement of action on the title of the property.  The defendant did provide a lien release bond, and the liens were released.  However, while the supplier to the vendor was apparently successful in establishing violation of […]

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Clarification of Liability Under the Excessive Lien Statute, Contrast to Trust Fund Statute

The Colorado Court of Appeals released its opinion in the matter of JW Construction Co., Inc. v. Elliot, No. 10CA0244 (Colo. Ct. App. March 17, 2011) regarding the construction of a custom home.  Specifically, the homeowners asserted that they found discrepancies in the invoices and pay applications provided by the General Contractor.  When the Contractor refused to provide complete records to support the draw requests, the homeowners terminated the contract and proceeding with the work on their own, paying the […]

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Colorado’s Trust Fund Statute

Colorado Revised Statute 38-22-127 provides that all funds disbursed to any contractor or subcontractor under any building, construction, or remodeling contract shall be held in trust to pay subcontractors, laborers, or material suppliers.  Failure to do so is a violation of the civil theft statute at CRS 18-4-401.  Accordingly, the consequences of violating the statute can be an award of treble damages and attorney fees.

A claim can arise even if the subcontractor, supplier, or labor does not have a proper, […]

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