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Taghipour v. Jerez7/30/2002
d the LLC where the agreement provides: "No loans may be contracted on behalf of the . . . unless authorized by a resolution of the embers." Taghipour reasons that this operating agreement provision precludes Jerez from executing a loan without a resolution of the members since under section 48-2b-125(2)(b) of the Act a manager cannot bind a limited liability company if the articles of organization or operating agreement does not afford the manager the authority to do so.
I. COMPETING STATUTORY PROVISIONS
To determine whether the loan agreement in this case is valid and binding on the LLC, it must first be determined whether this case is governed by section 48-2b-127(2), which makes certain kinds of documents binding on a limited liability company when executed by a manager, or section 48-2b-125(2)(b), which provides that a manager's authority to bind a limited liability company can be limited or eliminated by an operating agreement.
When two statutory provisions purport to cover the same subject, the legislature's intent must be considered in determining which provision applies. Jensen v. IHC Hosps., Inc., 944 P.2d 327, 331 (Utah 1997). To determine that intent, our rules of statutory construction provide that "when two statutory provisions conflict in their operation, the provision more specific in application governs over the more general provision." Hall v. State Dep't of Corr., 2001 UT 34, 15, 24 P.3d 958; see alsoBiddle v. Washington Terrace City, 1999 UT 110, 14, 993 P.2d 875.
In this case, the Utah Court of Appeals, affirming the trial court, concluded that section 48-2b-127(2) was more specific than section 48-2b-125(2)(b), and therefore took precedence over it. Taghipour, 2001 UT App 139 at 13. However, Taghipour contends that in determining which of the two provisions is more specific, the more restrictive clause is more specific because it is more limiting and "would require authority in all situations." Accordingly, Taghipour contends that section 48-2b-125(2)(b) is the more restrictive, and consequently, the more specific, provision.
The question of which statute the legislature intended to apply in this case is determined by looking to the plain language of the statutes that purport to cover the same subject. Biddle, 1999 UT 110 at 14; Jensen, 944 P.2d at 331. Section 48-2b-125(2)(b) provides in relevant part:
If the management of the limited liability company is vested in a manager or managers, any manager has authority to bind the limited liability company, unless otherwise provided in the articles of organization or operating agreement. Utah Code Ann. § 48-2b-125(2)(b) (1998).
In contrast, section 48-2b-127(2) provides:
Instruments and documents providing for the acquisition, mortgage, or disposition of property of the limited liability company shall be valid and binding upon the limited liability company if they are executed by one or more managers of a limited liability company having a manager or managers or if they are executed by one or more members of a limited liability company in which management has been retained by the members. Id. § 48-2b-127(2).
Section 48-2b-127(2) is the more specific statute because it applies only to documents explicitly enumerated in the statute, i.e., the section expressly addresses " nstruments and documents" that provide "for the acquisition, mortgage, or disposition of property of the limited liability company." Id.; see alsoJensen, 944 P.2d at 332 (stating that statute was more specific because statute applied "only to wrongful death actions arising out of medical malpractice"); De Baritault v. Salt Lake City Corp., 913 P
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