Taghipour v. Jerez
Supreme Court of Utah
52 P.3d 1252 (2002)
Despite an LLC operating agreement requiring all members' authorization for loans, manager Jerez (defendant) obtained a mortgage loan from Mt. Olympus (defendant) without the other members' knowledge; when the LLC defaulted and Mt. Olympus foreclosed, other members Taghipour and Rahemi (plaintiffs) sued arguing the loan and foreclosure were invalid under the operating agreement, and the lower courts upheld the loan under the more specific mortgage-validation statute.
Whether, where a statute states that mortgage documents executed by a limited liability company's manager are valid and binding on the company, but the operating agreement states that no loans can be made without authorization by all the members, mortgage documents executed by a manager without the other members' consent will be valid and binding on the company.