978-1285770178 Case Printout Case CPC-03-10 Part 2

615 S.E.2d 1

Page 7

272 Ga.App. 817, 615 S.E.2d 1, 2005 WL 357420 (Ga.App.), 5 FCDR 501, 5 FCDR 1304

(Cite as: 615 S.E.2d 1, 2005 WL 357420 (Ga.App.))

members when they usurped LLC opportunities and improperly

competed with the LLC by participating in developments of other parcels

contained in the larger tract owned or managed by members of the

articles of organization or a written operating agreement, a person who

is a member of a limited liability company in which management is

langua

ge)

rs and

also

fiduciary duties, it also makes clear that the duties and liabilities “may be

operati

ng

agreem

Westbury group. Even assuming these members participated in

competing developments, there was no basis for finding that they

breached fiduciary duties owed as members of the LLCs.

Section 14-11-305 of the Georgia Limited Liability Company Act (the LLC

ents.”

615 S.E.2d 1

Page 8

272 Ga.App. 817, 615 S.E.2d 1, 2005 WL 357420 (Ga.App.), 5 FCDR 501, 5 FCDR 1304

(Cite as: 615 S.E.2d 1, 2005 WL 357420 (Ga.App.))

any way the rights of any Member, or of any Affiliate of any Member, to

conduct any other business or activity whatsoever, and no Member

shall be accountable to the [LLC] or to any other Member with respect

to that business or activity even if the business or activity competes

with the [LLC’s] business. The organization of the [LLC] shall be

without prejudice to the Members’ respective rights (or the rights of their

respective Affiliates) to maintain, expand, or diversify such other

activities which competed with the LLC’s business. OCGA ß ß 14–11–

305; 14-11-1107(b); accord McConnell v. Hunt Sports Enterprises, 132

Ohio App.3d 657, 725 N.E.2d 1193, 1206-1207 (1999) (LLC operating

LLCs by converting LLC assets. In support of this contention, the

Stokers point to evidence that money was loaned to one of the LLCs at

issue for development expenses on a parcel of land that was ultimately

apparent damage asserted is that the LLC was prevented from

developing the parcel it never acquired. Because the Stoker member

failed to produce evidence of a conversion or damage, the trial court

court

orally

pronou

nced

that it

intende

d to

the

written

summa

“A trial

court’s

oral

writing

and

entered

615 S.E.2d 1

Page 9

272 Ga.App. 817, 615 S.E.2d 1, 2005 WL 357420 (Ga.App.), 5 FCDR 501, 5 FCDR 1304

(Cite as: 615 S.E.2d 1, 2005 WL 357420 (Ga.App.))

242 Ga.App. 659, 660, 530 S.E.2d 753 (2000). Accordingly, this claim

presents nothing for appellate review.

Case No. A04A2109

In the cross-appeal, members of the Westbury group appeal from

various rulings by the trial court denying aspects of their motion for

summary judgment, and the LLC group appeals from the grant of

summary judgment against their breach of fiduciary duty claims.

in one of the developments. Gross was a longtime friend of Stoker and

had previously purchased lots in various developments through his

contacts with Stoker. There was evidence that Stoker was engaged in

[19][20] Stoker contends this statement was slander per se because it

made the false charge that Stoker’s development business in the area

had failed or was closing down, which was calculated to injure his

456 S.E.2d 699 (1995). Under this standard, we find the statements at

issue could reasonably be interpreted as having the purpose of injuring

Stoker’s business by stating or implying that Stoker was going out of the

develo

ped

various

residen

tial

parcels

,

e of

excessi

ve

the

sale of

develo

nt, the

Stokers

asserte

615 S.E.2d 1

Page 10

272 Ga.App. 817, 615 S.E.2d 1, 2005 WL 357420 (Ga.App.), 5 FCDR 501, 5 FCDR 1304

(Cite as: 615 S.E.2d 1, 2005 WL 357420 (Ga.App.))

Westbury group (Benjh, Pleydell-Bouverie, and Westbury Properties),

who were the other members of the LLCs. These actions included claims

that the excessive costs occurred because the other LLC members

breached contractual and fiduciary duties owed under the LLC joint

venture and operating agreements. The Westbury group LLC members

claim the trial court erred by denying their motion for summary judgment

on these claims.

provided that:

A Member shall not be liable, responsible, or accountable, in damages

or otherwise, to any other Member or to the [LLC] for any act performed

Citing these contractual provisions, the Stokers claim that the LLCs

incurred excessive development costs because the Westbury group LLC

members were grossly negligent in failing to monitor the costs of

technique employed by me when preparing bids to perform such work.”

The Stokers argue that, because the actual development *12 cost

incurred by the LLCs on the three developments was about 25 percent

the

vote of

both

membe

rs to

conduc

t the

fault

the

other

which

did the

develo

membe

r for the

terms

615 S.E.2d 1

Page 11

272 Ga.App. 817, 615 S.E.2d 1, 2005 WL 357420 (Ga.App.), 5 FCDR 501, 5 FCDR 1304

(Cite as: 615 S.E.2d 1, 2005 WL 357420 (Ga.App.))

n the contractor and the LLC. The contract entered into by the LLC for

the developments at issue was not for a fixed sum, but provided for

payment of actual development costs plus a ten percent profit.

First, the cost figure in the contractor’s affidavit submitted by the Stokers,

which was twenty-five percent under the development costs actually

incurred by the LLCs, was based on a fixed cost estimate, but the

contract between the LLC and the contractor was for payment of actual

than those incurred by other developers under similar circumstances, we

find nothing in the record which could support a determination that the

higher costs occurred because a Westbury group LLC member breached

LLCs by refusing to sign contracts allowing the LLCs to sell developed

lots. The LLC group claims that the trial court erred by granting summary

judgment on these claims in favor of the Stokers.

before the [LLC],” and that the business of the LLC “shall be managed by

a majority of the members.” It follows that each member of the LLC had

equal authority and that the vote of both members was required to

were

improp

erly

brought

in

violatio

n of the

Once

again,

we find

to

corpora

tions.

271–

273,

581

615 S.E.2d 1

Page 12

272 Ga.App. 817, 615 S.E.2d 1, 2005 WL 357420 (Ga.App.), 5 FCDR 501, 5 FCDR 1304

(Cite as: 615 S.E.2d 1, 2005 WL 357420 (Ga.App.))

where a corporation is comprised of two stockholders, each with an equal

fifty percent share of the stock and each with an equal degree of control

over corporate affairs, one stockholder cannot authorize an *13 action in

the name of the corporation against the other stockholder. As set forth in

Glisson, the proper course under these circumstances is to assert a

derivative action in the name of the complaining stockholder on behalf of

the corporation, or where the special circumstances in Thomas v.

Dickson, 250 Ga. 772, 301 S.E.2d 49, permit, bring a direct action in the

name of the complaining stockholder seeking individual recovery.

[FN3] Accordingly, we vacate the trial court’s grant of summary judgment

on these counterclaims and remand the case with directions that the

counterclaims be dismissed without prejudice.

FN3. See OCGA ß 14-11-801 et seq. (derivative actions under the LLC

Act).

Judgment affirmed in Case No. A04A2108.