Where a plaintiff has alleged breach of a limited liability company’s operating agreement, summary disposition should be denied because there are material issues of fact as to whether the Operating Agreement was terminated at the time the plaintiff allegedly breached the agreement’s non-compete provision.
“This matter is before the Court on Defendants/Counter-Plaintiffs’ Motion for Partial Summary Disposition.
“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.
“Consequently, Eadie argues that everything that occurred between the parties after their agreement to dissolve Boulevard in January 2020 was in furtherance of winding up the company. During the period of winding up the company, they were no longer bound by the non-compete provision in the Operating Agreement, and they were free to seek other employment opportunities.
“Gerlach, however, disagrees with this interpretation, and argues that although the parties expressed an interest in dissolving the company, they did not formally vote to do so and were still bound by the provisions in the Operating Agreement. Thus, according to Gerlach, Eadie’s decision to seek other employment was a breach of the non-complete provision of the Operating Agreement.
“In the case at bar, Gerlach argues that Eadie cannot maintain a breach of contract claim because Eadie breached the Operating Agreement first by, among other things, accepting employment with O’Keefe without voting to dissolve the company and releasing himself from the non-complete provisions in the Operating Agreement.
“The parties disagree as to whether the January 2020 emails constitute ‘ a written agreement to dissolve the Company signed by all Members ’ under Article 2 of the Operating Agreement. Eadie argues that the electronic block signatures in the January 2020 emails were the basis of a valid and binding agreement to terminate Boulevard.
“Because the Court finds that the method of written agreement and the signatures required by Article 2 in the Operating Agreement is ambiguous, the Court looks to the conduct of the parties to determine whether they acted as though the January 2020 emails, in and of themselves , constituted a termination of Boulevard. The parties’ course of conduct after January 2020 seems to demonstrate that both parties anticipated that a dissolution would eventually occur. However, there is conflicting evidence as to whether a dissolution had already taken place as of January 2020 and the company was simply ‘winding up’ its affairs, or whether the parties were continuing with business as usual.
“Consequently, there appear to be material issues of fact as to whether the Operating Agreement was terminated and Boulevard legally dissolved as of January 2020. Thus, Eadie’s obligations under the Operating Agreement are also subject to dispute. Because there are material issues of fact underlying Count I Breach of Contract, Defendants’ request for summary disposition pursuant to MCR 2.116(C)(10) is DENIED.”
Eadie v. Boulevard & Co. LLC; MiLW 10-108001, 10 pages; Oakland Circuit Court; Valentine, J.
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