978-1285770178 Case Printout Case CPC-03-06 Part 2

FN2. Corporate Mgmt., Inc. v. Greene County, 23 So.3d 454, 459 (Miss.2009).

FN3. Limbert v. Miss. Univ. for Women Alumnae Ass’n, Inc., 998 So.2d 993, 998 (Miss.2008) (citing Ham–

(giving the chancellor broad equitable power to enforce the LLC operating agreement).

¶ 39. Viewed as a whole, we cannot say the chancellor was in error by finding that the complaint was sufficient

to put Bluewater on notice that Williford was seeking monetary relief. Accordingly, Defendants‘ argument that the

chancellor granted Williford relief that was beyond the scope of the pleadings is without merit.

III. The chancellor had authority to award the plaintiff the value of his interest in the two LLCs.

[7] ¶ 40. On several occasions, the chancellor expressed concern about Defendants’ conduct toward Williford,

including their decision to lock him out of the company offices and prevent his involvement in company business.

Also, he voiced concern over the large sum of money ($1.2 million) that was unaccounted for during the time Willi-

ford was “fired” and locked out.

¶ 41. For example, at the conclusion of trial, just before awarding Williford the fair-market value of his interest

¶ 42. Defendants zero in on the chancellor‘s use of the equitable term “unfair,” characterizing it as proof he ex–

ceeded his legal authority by awarding Williford the fair-market value of his interest. There is no law, they argue,

that allows a chancellor to award a money judgment on a “finding of inequity” or “not being fair.” They also claim

Mississippi’s Limited Liability Company Act does not allow such a remedy. On this point, they are incorrect.

[8][9] ¶ 43. While it is true that equitable principles ordinarily are not applied under contract law, this is not un-

Mississippi Limited Liability Act

¶ 44. In 1994, the Legislature authorized the formation of limited liability companies in Mississippi.FN22 Persons

who form one of these legal entities—commonly known as an LLC—are allowed to enter into a contract called a

limited liability company agreement FN23 “to regulate or establish the affairs of the limited liability company, the

chancellor to “enforce a limited liability company agreement by injunction or by such other relief that the court in its

discretion determines to be fair and appropriate in the circumstances.” FN25 This language clearly established the

chancellor’s authority to award Williford the fair-market value of his interest in the LLCs. We therefore find that this

for the obligations of the LLC.FN26 But because the members may modify this rule in the operating agreement,FN27

they may agree among themselves to be individually liable.

FN26. Miss.Code Ann. § 79–29–305(1) (Rev. 2009) (“A person who is a member of a limited liability

company is not liable, by reason of being a member, under a judgment, decree or order of a court, or in any

other manner, for a debt, obligation or liability of the limited liability company, whether arising in contract,

may address the liability of the individual members for “any action taken, or any failure to take any action, as a

manager or member….” FN28 So we must look to the operating agreements to see whether—and to what extent—they

limit the individual defendants’ liability.

FN28. Miss.Code Ann. § 79–29–403 (Rev. 2009).

¶ 48. Both LLCs’ operating agreements included the following provision:

failure of the individual defendants to pay Williford his one-quarter interest despite agreement to do so constitutes

a willful and intentional breach of contract and is grossly negligent…. The intentional breach of contract and gross

negligence by the individual defendants, the court so finds, is sufficient to render the individuals liable in addition

to the liability of the limited liability companies. The court had the opportunity to consider all of the evidence in-

cluding the testimony of all of the defendant witnesses who testified on the witness stand, and the court had the