Clinton v. Aspinwall

Syllabus

The plaintiff sought to recover damages from the defendants for, inter alia, breach of contract in connection with certain operational decisions the defendants made pursuant to a limited liability operating agreement with regard to the ownership and operation C Co., of which the plaintiff had been a member. The managers of C Co. created a $3 million capital reserve. Thereafter, the defendants, who controlled 61 percent of the interests of C Co., voted to amend a section of the agreement that effected how distributions are to be made. This was done over the objections of the plaintiff, who also challenged the necessity of the capital reserve. The defendants subsequently voted to remove the plain- tiff as a member of C Co. The plaintiff then commenced the present action, alleging three counts of breach of contract and two counts of breach of fiduciary duty, arising out of the amendment of the company agreement, the removal of the plaintiff as a member, and the capital reserve. The jury returned a verdict in favor of the plaintiff on his breach of contract claims and did not reach the breach of fiduciary duty claims. The defendants thereafter filed motions to set aside the verdict and for judgment notwithstanding the verdict, which the trial court denied and thereafter rendered judgment in favor of the plaintiff. Subsequently, the court granted the plaintiff's motion for attorney's fees and costs. On the separate appeals brought to this court by the defendants, held: 1. The trial court erred in denying the defendants' posttrial motions as to the breach of contract claims regarding the amendment to the agreement and the removal of the plaintiff as a member of C Co.; the court misinter- preted the company agreement because the defendants could not have breached § 3.4 of the agreement in amending that agreement and in removing the plaintiff as a member because § 3.4 applied to managers, and they were acting in their capacity as members, not managers, in undertaking those