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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.))
© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
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
operati
ng
agreem
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.))
© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
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.))
© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
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.))
© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
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.))
© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
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.))
© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
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.
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.))
© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
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.))
© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
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.))
© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
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.))
© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
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.))
© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
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.
