Don Mason and Beth Daley were managers and members of Pacific Beach Developers, LLC (PBD), a start-up real estate development company focusing on rehabilitating older properties for increased rental values and possible resale.

Daley made a contract with San Diego Architects Associates (SDAA) to provide plans for the rehabilitation of a 60-unit building on Ingraham Street for

$97,000, signing the contract “Beth Daley, manager P.B.D. LLC.” Financing for the Ingraham Street property fell through, and PBD’s option on the property expired. Although Daley notified SDAA that the “Ingraham Street deal was off,” SDAA had nearly completed its work, and SDAA brought suit for the contract price against both the LLC and Beth Daley. At the point the lawsuit was initiated, PBD had no working capital remaining, and Don and Beth had “moved on,” having taken jobs as mutual fund salespersons. Advise Beth of her legal obligations to SDAA.

1028 Part 7 Business Organizations AppendixLO1