Fraud — Non-compete provision – LLC

Where the defendant owner of a 50% interest in a limited liability company has filed a silent fraud counterclaim against the plaintiff owner of the other 50% interest, the plaintiff is entitled to summary disposition because the record does not support the defendant’s allegation that the plaintiff misled him about working for another LLC.

“Plaintiff Marco Eadie (‘Eadie’) and Defendant Alois Gerlach (‘Gerlach’) formed Boulevard and Co, LLC (‘Boulevard’) in 2015 to provide investment banking services. Eadie and Gerlach each own 50% of the company and serve as managers of Boulevard. The parties operated Boulevard together until approximately 2020 when each expressed an interest in moving on. The parties disagree as to the facts and legal consequences of that decision, however.

“In Gerlach’s claim for silent fraud, he argues that Eadie had a duty under the Operating Agreement to disclose that he was working for O’Keefe [& Associates Consulting, LLC] while receiving a salary from Boulevard. In his Response, Gerlach further argues that it was not a secret that Eadie had accepted a position at O’Keefe, but he created ‘a false impression that he was beginning work on January 1, 2021.’ Thus, Gerlach claims he was misled during the fall of 2020 about Eadie’s employment with O’Keefe.

“As noted above, Gerlach argues that he believed Eadie was beginning his employment with O’Keefe in January 2021. That is not supported by the documentary evidence, however.

“Thus, Gerlach knew as of September that Eadie had received an offer of employment from O’Keefe, and he knew in October that Eadie was already working for O’Keefe. Because the record does not support Gerlach’s claim that Eadie misled him with the impression that he was beginning work for O’Keefe in January 2021, the Court grants Eadie’s Motion for Summary Disposition of Count IV Silent Fraud.”

Eadie v. Boulevard & Co LLC; MiLW 10-108000, 18 pages; Oakland Circuit Court; Valentine, J.

Click here to read the full text of the opinion

Copyright © 2024 BridgeTower Media. All Rights Reserved.