FI FTH DI VI SI ON

M CFA DDEN, P. J.

, BRA NCH and BETHEL, JJ.

N O T IC E : M otions for r e c ons i de r a tion m us t be ph y sic a l ly r e ce iv ed i n our c le r k ’s offic e w ithin te n da y s of the da te of de c is ion to be de e m ed tim e ly file d.

http://w w w .ga a ppe a l s .us /r ule s

October 31, 2017



# I n th e Co u r t o f

A p p eals o f

G eo r g ia

A1 7 A0 68 3 . M ILLER v . FIBERLIGHT, LLC et al

.

M C F A D D E N , Pres id i n g J u d g e.

In t h i s act i o n , a m i n o ri t y m em b er o f a D el aware l i m it ed l i ab i l i t y co m p an y s u ed

t h e m ajo ri t y m em

bers an d t he ch ai r o f t he b o ard o f d i rect o rs fo r, am o n g ot h er t h i n g s ,

b reach o f d efau lt fi d uc i a r y d ut i es i m p o s ed b y Del aware l aw an d b reach o f t h e d u t y

o f g o o d fai t h an d fai r d eal i n g

. Th e t ri al co urt g ran t ed th e d efen d an ts ’ m o t i o n f o r

s u m m ary ju d g m en t o n al l o f t he p l ai n t i ff’ s cl ai m s , an d h e ap p eal s

. W e fi n d t h at t h e

p l ai n t i ff’ s cl ai m t h at th e d efen d an t s b reach ed d efau l t fi d uci ary d ut i es b y u n i l at eral l y

reject i n g o ffers t o p urch as e t h e co m p an y d ep en d s u p o n d i s p u t ed i ss u es o f fact

. So we

rev ers e t h e t ri al co u rt ’ s gran t o f s u m m ary j u d gm en t t o t h e d efen d an ts on t h at cl ai m

(an d t h e rel at ed cl ai m s deri v at i v e o f t hat cl ai m ). W e affi rm t h e g ran t o f s u m m ary

ju d g m en t i n al l o t h er res p ect s

.1

. Fa ct s a n d p r o ced

ur a l p o s t u r e

.

M i ch ael Mi l l er fi l ed t h i s act i o n c h a l l en g i n g cert ai n d eci s i o n s m ad e b y t h e

b o ard o f d i rect o rs o f d ef e n d a n t F i b erLi g h t

, LLC, t h e Del aware l i m i t ed l i ab i l i t y

co m p an y o f w h i ch M i ll er was a fo u n d er, was fo rm erl y an o ffi cer an d m em b er o f t h e

b o ard o f d i rect o rs , an d i n wh i ch h e cu rren tl y h o l d s a m em b ers h i p i n teres t

. Defen d an t s

NT As set s , LLC an d Th erm o Tel eco m Part n ers , LLC are i n v es t o rs in an d th e m ajo ri t y

m em b ers o f Fi b erLi g h t. 1 Defen d an t Ji m Ly n ch i s t h e ch ai r o f Fi b erLi gh t ’ s b o ard o f

d i rect o rs

.

M i l l er fi l ed t hi s act i o n aft er h e was t erm i n at ed fro m h i s po s i ti o n as p res i d en t

o f Fi b erLi g h t

. H e al l eg es t h at t h e d efen d an t s b reach ed t h ei r fi d u ci ary d u t i es t o h i m

an d t h e o t h er m i n o ri t y m em b ers o f Fi b erLi g h t an d b reach ed t h e im pl i ed co v en an t s o f

g o o d fai t h an d fai r d eal i n g

. He ap p eal s t h e g ran t o f s u m m ary ju d g m e n t t o t h e

d efen d an t s

.

To p rev ai l o n a m o t i o n fo r s u m m ary ju d g m en t

, . . . t h e m o v i n g

p art y m u s t sh o w t h at th ere i s n o g en u i n e d i sp u t e as t o a s p eci fi c m at eri al

fact an d t hat t h i s s p eci fi c fact i s en o u g h

, reg ard les s o f an y o t h er fact s i n

t h e c a s e , t o en t it l e t h e m o v i n g p art y to ju d g m en t as a m at t er o f l aw.

1 At s o m e p o i n t aft er t h e ev en t s at i s s u e h e re, Th erm o Tel eco m Part n ers

t ran s ferred i t s i n teres t i n Fi b erLi g h t t o d efen d an t s Th erm o Dev el o p m en t

, In c. an d FL

In v es t m en t Ho l d i n gs , LLC.

2W h en a defen d an t m o v es fo r s u m m ary ju d g m en t as t o an el em en t o f th e

cas e fo r wh i ch t he p l ai n t i ff, an d n o t t h e d efen d an t, wi l l b ear th e b u rd en

o f p ro of at t ri al t h e defen d an t m ay s ho w t h at h e i s en t i tl ed t o s u m m ary ju d g m en t ei t h er b y affi rm at i v el y d i s p ro vi n g t h at el em en t o f t h e cas e o r

b y p o i n t i n g t o an ab s en ce o f ev i d en ce i n t h e reco rd b y wh i ch t h e

p l ai n t i ff m i g h t carry th e b u rd en to p ro v e t h at el em en t

. An d i f th e

d efen d an t d o es s o , t h e p lai n t iff can n o t res t o n h i s p l ead i n g s, b u t rat h er

m u s t p oi n t t o s p eci fi c ev i d en ce g i v in g ri s e t o a t ri ab le i s s ue.

Bea le v. O’S

h ea , 3 1 9 Ga. Ap p

. 1

, 2 (7 3 5 SE2 d 2 9) (2 01 2 ) (ci t at i o n an d pu n ct u at i o n

o m it t ed ). W e rev i ew a s u m m ary ju d g m en t ru l i n g “ d e n o v o , v i ewi n g t h e ev i d en ce in

t h e reco rd

, as w e l l as an y i n feren ces th at m i g h t reas o n ab l y b e d rawn fro m t h at

ev i d en ce, i n t h e l i g h t m o s t fav o rab l e t o t h e n o n m ov i n g p art y .” Id

. (ci tat i o n o m i t t ed ).

So v i ewed

, t h e r e c o r d s h o ws t h at M i l l er was an em p l o y ee o f

t el eco m m u n icat i o n s co m

pan y Xs p ed i u s Co rp o rat i o n w h e n h e was as ked t o ru n

Xs p ed i u s ’ s fi b er b u s i n es s as a s ep arat e, s u b s i d i ary co m p a n y. T h erm o Tel eco m

Part ners was t he p ri n ci pal o w ner o f Xs p ed i u s

. Fo r t he n ex t y ear o r two

, t h e s u b s i d i ary

co m p an y was cal l ed Xs ped i u s Fi b er Gro u p

. D efen dan t J im Ly n ch an d n o n p art y J ay

M o n ro e, wh o o wn s Th erm o Tel eco m Part n ers , were M i l l er’ s b o s ses

.

On Ap ri l 22

, 2 0 0 5

, t h e en t i t y ceas ed t o be k no wn as Xs p ed i u s Fi b er Gro u p an d

b ecam e Fi b erLi gh t

, LLC. At th at t im e, Th erm o Tel eco m Part n ers , M i l l er, Kev in

3Co y n e, Ro n Ko rm o s , an d t w o o t h er i n d iv i d u al s en tered a l i m i ted li ab il i ty co m p an y

ag reem en t g o v ern i ng t h e o perat i o n o f Fi b erLi g h t

. T h e ag reem en t was am en d ed

m u lt i p l e t i m es

. Th e cru x o f M il l er’ s co m p l ai n t i s t h a t h e was co erced b y eco n o m i c

d u res s to ag ree t o t h e am en d m en t s , wh i ch en ab l ed t h e d efen d an t s t o red eem m o s t o f

M i l ler’ s i n t eres t i n Fi b erLi g ht u p o n h i s t erm i n at i o n

.

Al t h ou g h t h e l i m ite d lia

bility c om pa ny a g r e e m e nt w as am en d ed m u l ti p l e t i m es ,

cert ai n p ro v i s io ns were i d en t ical fro m on e vers i o n t o t h e n e x t

. Fo r ex am p l e, al l

v ers i on s p ro v i d ed t h at t h e ag reem en t s were g ov ern ed b y an d wo u l d b e co n s t ru ed

u n d er t he l aw o f Del aware. A l l v ers io n s p r o v i d e d th at t h e b o ard o f di rect o rs was

d eem ed t h e m an ag er o f Fi b erLi g h t fo r p urp o s es o f t h e Del aware Li m i t ed Li ab i l i t y

Act

.

Th e i n it ial ag reem en t s et o u t t h e m em b ers ’ o wn ers h i p i n t eres t s i n Fi b erLi g ht

as fo l l o ws : M i ll er o wn ed 21

. 1 1 1 p ercen t

, Th erm o Tel eco m Part n ers o wn ed 5 p ercen t

,

an d Co y n e, Ko rm os , an d t h e o t h er i n d i v i d u al s o wn ed th e rem ai n i n g 7 3 .8 89 p ercen t

.

Th e i n i t i al ag reem en t es t ab l i s h ed a t h ree-m em b er b o ard o f d i rect ors . Two d i rect o rs

wo u l d b e el ect ed b y t h e v o t e o f m em b ers h o l d in g a m ajo ri t y o f t h e percen t ag e

i n t eres t s , wh i l e Th erm o T el eco m Part n ers had t h e ri g h t t o d es i g n at e t h e th i rd d i rect o r.

Ly n ch was Th erm o Tel eco m Part n ers ’ s d es i g n at ed d i rect o r as wel l as t h e ch ai rm an

4o f t h e b o ard . M i l l er was a d i rect o r an d t h e p res i d en t

, an d Co y n e was a d i rect o r an d

t h e ch i ef fi n an ci al o f

f i cer. Th e i n i t i al ag reem en t p ro v i d ed t hat i t co u l d o n l y b e

a m e n d e d wi th t he u n an i m o u s co n sen t o f th e m em b ers

. It pro v i ded th at t h e o ffi ce r s

s erv ed at t h e pl eas u re o f t h e b o ard

, wh i ch co u l d rem o v e t h em fro m o ffi ce at an y t i m e

w i t h o r wi t h o u t cau s e. Defen d an t NT As s et s was n o t a p art y t o t h e fi rs t ag reem en t

.

Th e seco n d ag reem en t

, en t i t l ed “ s eco n d am en d ed an d res tat ed l i m i t ed l i ab i l i t y

c om pa ny a gr eem en t ,” refl ect ed t h e rep u rch as e an d al lo cat i on o f a n i ndividua l ow ne r ’ s

i n t eres t in t h e co m

p an y , wh i ch res u l ted i n an i n creas e i n M il l er’ s i n t eres t t o 3 2 .7 7 0 4

p ercen t an d an i n creas e i n Th erm o Tel eco m Part n ers ’ i n teres t t o 6 .4 6 78 p ercen t

. Th e

p ro v is i o n s es t ab l is h i n g a th ree-m em ber b o ard o f d i rect o rs , d es cri b i n g th e el ect i o n o f

t h o s e b o ard m em

b ers , p ro v i d in g fo r th e rem o v al o f o ffi cers , an d req u i ri n g u n an i m i t y

o f t h e m em

b ers t o am en d t h e ag reem en t were u n ch an g ed fro m t h e i n i t ial ag reem en t

.

Defen d an t NT As s et s was n o t a p art y t o t h e s eco n d am en d ed ag reem en t

.

Th e p iv o t al t hi rd am en d ed an d res t at ed l i m i t ed l i ab i l i t y co m p an y ag reem en t

,

effect i v e as o f J an u ary 1

, 2 00 6

, m ad e m an y ch an g es

. S i g n i fi can t l y , it refl ect ed t h e

co n vers io n o f t h e m o re t h an $ 1 0 m i l l i o n i n o u t s tan d i n g d eb t Fi b erLi g ht o wed t o i t s

l arg es t cred i t o rs , Th erm o Tel eco m Part n ers an d N T As s et s, in t o eq u i t y i n Fi b erl i g h t

.

Fo rm e r l y cred i to rs (wi t h Th erm o Tel eco m Part n ers o wn in g a 6 .4 6 7 8 p ercen t

5m em

b ers h i p in t eres t ), T h erm o Tel eco m Part n ers an d N T As set s were n ow m em b ers

h o l d i n g t h e larg es t m em

b ers h i p i n t eres t i n t he co m pan y

. Th erm o Tel eco m Part n ers ’

ex p an s i o n o f i t s m em

b ers h i p i n t e r e s t an d NT As s et s’ acq u i s i t i o n o f a m em b ers h ip

i n t eres t red u ced t h e i nd i v i d u al m em b ers ’ m em

bers h i p i n t eres t s acco rd in g l y

.

Fu rt her, t h e t h i rd ag reem en t d i v i ded t h e m em b ers ’ i nt eres t s i n t o t w o cl as s es :

i n v es t o r i n t eres t s, wh i ch were b as ed o n t h e am o u nt o f m o n ey t h e part i cu l ar m em b er

h ad i n v es t ed i n t h e co m p an y , an d i n cen t i v e in t eres ts

, wh i ch we r e i nt en d ed to

co m p en s at e t h e in d i v i d u al m em b ers , wh o were al so em

p l o y ees of Fi b erLi gh t

, u p o n

t h e s al e o f t h e b u s i n es s

. Un d er t h e t h ird ag reem en t

, T h e r m o Tel eco m o wn ed a

2 5 .9 8 6 9 p ercen t i nv es t o r in t eres t an d NT As s et s o wn ed a 7 2 .3 5 36 p ercen t i n v e s t o r

i n t e res t

, fo r a to t al o wn ers hi p i n t eres t o f 9 8

. 3 4 0 5 percen t of t h e co m p an y

. M i l l er

o wn ed a .5 80 4 p ercen t i nv es t o r i n t eres t an d a .0 0 1 0 p ercen t i ncen t i v e i n t eres t

, fo r a

t o t al o wn ers h i p o f .5 8 1 4 p ercen t ; K e v i n Co y n e o wn ed a .5 5 62 percen t i n v es t o r

i n t eres t an d a .0 0 1 0 p ercen t i n cen t i v e in t eres t

, fo r a t o t al o wn ers h i p in t eres t o f .5 5 7 2

p ercen t ; an d Ro n Ko rm o s , t h e fi n al i n d i v i du al m e m b e r , o w n ed a .5 19 9 p ercen t

i n v es t o r i n t eres t an d a .0 0 10 percen t i n cen t i ve in t eres t, fo r a to t al o wn ers hi p i n t eres t

o f .5 2 0 9 p ercen t.

6T h e t h i rd ag reem en t req u i red t h e red em p ti o n o f t h e i n d i v i d ual m em b er’ s

i n t eres t s s h o u l d t h at m em b er’ s em p l o y m en t b e t erm i n at ed

, di rect i n g t h at t h e

“ Co m p an y s hal l p u rch as e al l o f t h e In v es t o r In t eres t t hen o w n ed b y th e Term i n at ed

M em ber” an d th a t “ t h e C o m

p an y s h al l red eem t h e en t i re u n v es ted po rt i o n o f s u ch

t erm i n at ed em

p lo y ee’ s In cen ti v e In t eres t ,” al t h ou g h th e b o ard co u l d wai v e t h e ri g ht

t o au t o m at i c red em

pt i o n o f t h e i n cen ti v e i n t eres t s

.

Th e t h i rd am en d ed ag reem en t al s o c han g ed th e s tru ct u re o f th e b o ard o f

d i rect o rs , g i v i n g Th erm o Tel eco m P a rt n ers an d NT As s et s t he ri g ht t o jo in t l y

d es i g n at e up t o t h ree di rect o r s , s o l o n g as t h ey h el d a m ajo ri t y o f t he percen t ag e

i n t eres t s ; t h ey d es i gn at ed L y n ch as a d i rect o r b u t h ad t h e ri g h t t o ad d t wo m o re

d i rect o rs at an y

t i m e. M il l er an d Co y n e rem ai n ed d i rect o rs

.

Th e t h i r d ag reem en t ad d ed a p ro v i s i o n t h at was ab s en t fro m t h e i n i t i al

ag reem en t an d th e s eco n d a m en d ed an d res tat ed ag reem en t ab o u t t h e v o t i n g o f

d i rect o rs . Th e n ew v ot i n g p ro v i s i o n s t at ed t h at

[e] ach Di rect o r s h al l hav e o n e (1 ) v o te at al l b oard m eet i n g s , ex cep t t hat

s o l o n g as T h erm o an d NT As s e t s c o l l ect i v el y h ol d a m ajo ri t y o f th e

Percen t ag e In t eres t s, t h e fo ll o w i n g ru les s h al l ap p l y t o an y v o t es t ak en

b y t he Bo ard at an y d ul y cal led Bo ard m eet i n g : (a) if t h ere i s o n e (1 )

T he r m o/ NT As s et s Des i gn ee o n t h e Bo ard

, t h en s u ch Th erm o/N T A s se ts

Des i g n ee sh al l h av e t h ree (3 ) v ot es ; (b ) i f t h ere are t wo (2 ) th erm o/ NT

7As s et s D es i g n ees o n th e b o ard

, t h en each s uch Th er m o / NT As s et s

Des i g n ee s h a ll h av e t wo (2 ) v o t es ; an d (c) i f t h ere are t hree (3 )

Th erm o /NT A s s et s Des i gn ees o n t he Bo ard

, t h en each s u ch T herm o/ NT

As s et s Des ig nee s h al l hav e o n e (1 ) v o t e. Fo r an y act i o n t o b e ad o p t ed b y

t h e Bo ard

, su ch act io n m u s t b e ei th er (1 ) ap p ro v ed b y t h e affi rm at iv e

v o t e o f Di rect o rs hav i n g a t o t al o f at l eas t th ree (3 ) v ot es at d u l y cal led

Bo ard m eet i n g , o r (i i ) ap p ro v ed by wri t t en co n s en t o f al l Di rect o rs t h en

s erv in g o n t h e Bo ard

.

So M i l l er an d Co y n e each h ad o n e vo t e, an d as l o n g as T h erm o Tel eco m Part n ers an d

NT As s et s h ad o n e des i g n at ed d i rect o r, t h ey had t h ree v ot es , w h i ch al l o wed t h em to

ad o pt an y act i o n un i l at eral ly

. Prev i o u s l y , as n o t ed

, t h e l i m i t ed l i a b i l i t y ag reem en t

co u ld o n l y

b e am en d ed w it h t he u n an i m ou s co n s en t o f t h e m em b ers

.

Th e fo u rt h am en d ed a nd r e sta t e d lim ite d l ia

bility c om pa n y ag reem en t

, effect i v e

as o f Oct o b er 2 7

, 2 0 0 8

, m ad e n o ch an ges ab ou t wh i ch M i l l er co m p l ai ns

. (Al t h o u g h

t h e t ri al co u rt fo u n d t h at t h e fo urt h am en d ed ag reem en t red u ced M i l l er’ s i n t eres t an d

i n creas ed Th erm o Tel eco m Part n ers ’ an d NT As s et s’ i n t eres t s , t h e ag reem en t i n t h e

ap p el l at e reco rd l i s t i n g t h e p art i es ’ i n teres t s d oes n ot refl ect s u ch a ch an g e.)

Th e fi ft h am en ded an d res t at ed l i m i t ed l i ab i l i t y co m pan y ag reem en t, effect i v e

as o f M arch 1 7

, 2 0 1 1

, ch an g ed t erm s u s e d t o c a l cu l at e p ay ou t s to in v es to rs s h o u ld

8Fi b erLi g h t b e s o ld u n d er cert a i n c o n d i t i on s

. It red u ced t h e in di v id u al m em b ers ’

i n t eres t s an d i n creas ed Th erm o Tel eco m Part n ers ’ an d NT As s et s ’ i n teres ts

.

M i l l er, Co y n e, an d Ko rm o s each i n v es t ed b et w een $ 5 6,0 0 0 an d $ 6 0 ,0 0 0 in

Fi b erLi g h t

. Th erm o Tel eco m Part n ers an d NT As s et s i nv es t ed m o re t h an $ 1 4 m i l l i o n.

M i l ler u n d ers t oo d t h at wh en a co m p an y bo rro wed m o n ey , th e l en d er g ai ned m o re

co n tro l

. He co n ced ed t hat Th erm o Tel eco m Part n ers ’ an d NT As set s ’ co n v ert i n g t h ei r

d eb t t o eq u i t y

was n o t i m

p ro p er b u t i n s t ead was a fi n an ci al s t rat eg y . Bu t h e d i d n ot

b el i ev e t h e co n v ers io n o f t h e d eb t i n t o eq u i t y s h o u l d h av e i m

p act ed h is o wn eq u i t y

p o s i t i on

. (He t es ti fi ed t hat h e b el i ev ed t h e fi rs t an d seco n d o p erat in g ag reem en t s were

en t ered af t er Th erm o Tel eco m Part n ers ’ an d NT As set s ’ co n v ers i o n of Fi b erLi g h t ’ s

d eb t t o eq u i t y , al t h o u g h t h e t h i rd ag reem en t, by i t s t erm s , was en t ered to refl ect t h at

ch an ge.)

M i l l er p ercei v ed t h e th i rd am en d ed ag reem en t as “ b as i cal l y s t ri p p[i n g h i m ] o f

[h i s ] 2 5 percen t p o s i t i o n i n t h e co m p an y t o ab ou t .0 0 5 8 s o m et h i n g o r a h al f a p ercen t

,

wh i ch was si g n i fi can t .” M il ler d i d n o t t h i n k t h e i n cen t i v e i n t e res t s t ru ct u re

es t ab l i s h ed i n t h e t h ird am en d ed ag reem en t b en efi t t ed h i m b ecau s e p rev i o u s l y h e h ad

h ad a m uch l arg er p i ece o f t h e co m p an y

. He w o u l d h av e p referred n o t t o h av e h i s

i n t eres t d i l u ted b y ad d i t i o nal cap i t al co n t ri b u t i o n s , g iv en t he sweat eq u i ty h e h ad in

9t h e co m

p an y

. H e t h o u g ht t h e in cen t i v e i n t eres t s were t oo l o w. Ad d i t i o n al l y , al t h o u g h

h e u nd ers t o o d t h at t h e co m p an y n o lo n ger h ad an op t i o n b u t was req u i red t o red eem

t h e i n v es t o r i nt eres ts , h e d i d n o t ag ree wi t h t h at ch an g e.

M i l l er s um m ed u p ag reem en t s t h ree, fo u r, an d fi v e as fo l l o w s :

E a c h o n e o f t h o s e ag reem en t s d i d n o t al lo w an d d i d n o t p ro v i d e an y

s u b s t an t i al ri g h ts fo r t h e m i n o ri t y s hareh o l d ers at al l

, i n cl u d i ng m e.

Th ere was no t h i n g i n t ho s e ag reem en ts t h at al l o w ed u s to ret ai n o u r

eq u i ty

. Th ere w as n o t h i n g i n t ho s e ag reem en t s t h at wo ul d g i v e u s an y

p ro t ect i o n as i t ap p l i es t o t h o s e eq u i t y an d i n cen t iv e i n t eres t s

. . . . [t h ey ]

were co n t i n u e d e f

f o rt s t o s tri p m e o f an y o f m y eq u i t y o r i n cen t iv e

i n t eres t

.

Aft er M i l ler was t erm ina t e d f r om F ibe r L ight a nd his inte r e s t s l arg el y red eem ed

,

h e fi l ed t h i s act i o n.

2

. Br ea ch o

f f i d u ci a r y d u t i es

.

M i l l er arg u e s t h at t h e t ri al co u rt erred i n g ran t in g s u m m ary ju d g m en t t o t h e

d efen d an t s b ecau s e t h e q u es t io n o f wh et h er t h ey b reach ed fi d u ci ary d u ti es t h ey o wed

t o Mi l l er as t h e o wn er o f a m i n o ri t y in t eres t i n Fi b erLi g h t d ep en d s o n d i s p u t ed i s s u es

o f fact

. He arg u es t h at th e d efen d an t s b reach ed t h ei r fi d u ci ary d u t i es t o h i m i n t h ree

res p ect s : t h ey co erced h i m v ia eco n o m i c d ures s i n t o s i g n i ng t h e t h i rd

, fo u rt h

, an d

10fi ft h am en d ed ag reem en t s ; t h ey t erm i n at ed h i s em p l o y m en t an d red eem ed h i s

i n t eres t s i n t h e co m

p an y ; an d t h ey

reject ed o ffers t o p u rch as e Fi b erLi g ht

.

(a) Def a u lt f i d u ci a r y d u ti es u n d er Del a wa r e l a w.

M i l l er d o es n o t bas e h i s cl ai m s u p on an y fi d u ci ary d u t y i m p o s ed i n t h e l i m i t ed

l i ab i l i t y co m

pan y ag reem en t s

. In s t ead

, h e b as es h i s cl ai m s u p o n fi d u c i a ry d u ti es

i m p o s ed b y d efau l t u n d er Del aware l aw.

W h en a D el aware l im i t ed l i ab il i t y co m p an y ag reem en t i s si l en t o n t h e i s s u e o f

fi d u c i ary d u t i es , Del aware l aw n o w i m p o ses d efau lt fi d u ci ary d u t i es

. In 2 0 1 3

, “ t h e

Del aware Leg i s l at u re

. . . p as s [ed ] an am en d m en t t h at p ro v i d es fo r d efau l t fi d u ci ary

d u t i es .” CS

H Th ea t r es

, LLC v. Ned er l a n d er o f S a n Fr a n ci s co As s n s ., 2 0 1 5 Del

. Ch

.

LEXIS 1 1 5

, * 3 4 -3 5 n .5 4 (III) (C) (1 ) (Del . Ch . 2 0 1 5 ). See 6 Del . C. § 18 -1 1 0 4 (“ In

an y cas e n o t p ro v i d ed fo r i n t h i s c h a p t e r , t h e ru l es o f l aw an d eq ui t y , i n cl u d i n g t h e

ru l es o f l aw an d e q u it y rel at i n g to fi d u ci ary d u ti es an d t h e l aw m erch an t

, s h al l

g o v ern .”). T h e s t at u t e, h o wev er, b ecam e effect i v e A u g u s t 1

, 20 1 3

, wel l aft er t h es e

ag reem en t s were en t ered . 6 Del . C. § 1 8 -1 1 0 4 . W h et h er s u ch d efau l t d ut i es ap p l i ed

t o l im i t ed l i ab il i ty co m p an y ag reem en t s en t ered b efo re 2 0 13

— su ch as t h e

ag reem en t s at i s s u e h ere — i s n o t ab s o l u tel y cl ear.

11Acco rd i ng to d i ct a i n a 2 0 1 2 De l a ware Su p rem e Co u rt o p i n i o n ,”wh et h er t h e

[p re-2 0 1 3 D el aware] LLC s t at u t e [d i d ]

— o r [d i d ] no t

— i m p o s e d efau l t f

i d u c i a ry

d u t i es i s o ne ab o u t wh i ch reas o n ab l e m i n ds co ul d d i f f e r

. ” G a t z Pr op er t i es

, LLC v.

Au r ig a Ca

p i t a l Co r p. , 5 9 A3 d 1 2 0 6

, 1 2 1 9 (III) (C) (Del

. 2 0 1 2). See g en eral l y

M o h se n M an es h, Da mn i ng Di ct u m: Th e Def a u lt Du t y Deb a te In Del a wa r e , 3 9 J

.

Co rp

. L. 3 5

, 5 4

– 6 3 (2 0 1 3 ). Th e Del aware Su p rem e Co u rt d i d n o t an s wer t h e q u es t i o n,

b u t i t di d reco g n i ze t h at a “ l o n g l i n e o f Ch an cery 2 p reced en t s [h av e h el d ] t h at d efau l t

fi du ci ary d ut i es ap p ly t o t h e m an ag ers o f an LLC.” Feel ey v. NHAOCG, LLC

, 6 2 A3 d

6 4 9

, 6 6 0 (II) (D) (1 ) (Del

. Ch

. 2 0 1 2 ) (co l l ect in g cas es ). A n d ev en i n t h e p eri o d

b et ween t h e Del aware Su p rem e Co u rt ’ s G at z d eci s i o n an d th e s t at u to ry fi x , t h e

Ch an cery Co u rt co nt i n u ed t o fi n d s u ch d efau l t d ut i es

. Id

. at 6 60 -6 6 1 (II) (D) (1 ).

Acco rd in g ly

, we fo l l o w t he lo n g l i n e o f Ch an cery p reced en t s t o f i n d t h a t d efau l t

fi du ci ary d u t i es ap p l i ed t o t h e ag reem en t s at i s s ue i n th i s ap p al

. Su ch d efau l t fi d u ci ary

2 Acco r d i n g t o i t s w eb s i t e, “ Th e Del aware Co u rt o f Ch an cery i s wi d el y

reco g n ized as t he n at i o n ’ s p re e m in en t fo ru m fo r t h e d et erm i n at i o n o f d i s p u t es i n v o l v i n g t h e i n t e r n al affai rs o f t h e t h o u san d s u po n t ho u s an d s o f D el aware

co rp o rat i o ns an d o t her b u s i nes s en t i t i es t hro u g h wh i ch a v as t am o u n t o f t he wo rl d ’ s

co m m erci al affai rs is co n d u ct ed

. It s u n i q u e co m p et en ce i n an d ex po s ure t o i s s u es o f

b u s i n es s l aw are u n m at ch ed .” h t t p : / / co u rt s .d el aware.g o v / ch an cery \ / (ret ri ev ed

Oct o b er 2 , 2 0 1 7 ).

12d u t i es i n cl u d e t he d u t i es o f c a r e a n d l o y al ty

. McKen n a v. S i n ger , 2 0 1 7 Del

. Ch

.

LEXIS 1 3 8 , * 4 1 -4 2 (II) (B) (Del . Ch

. 2 0 1 7 ).

(i ) Th e d u t y o f ca re.

“ Th e d u t y o f care req u ires t h at [m an ag ers ] act o n an ad eq uat el y i n fo rm ed

b as i s wi t h [m an ag er] l iab i l i t y fo r a d u t y

o f care v i o lat i o n p red i cat ed u po n co n cep t s

o f g ro s s n eg l ig en ce.” McKen n a , s u p ra, at * 4 1 -4 2 (ci tat i o n an d p u n ct u at i o n

o m it t ed ). “ [A] l ack o f d u e care [i s ] fi d u ci ary act i o n t ak en s o l el y b y reas o n o f g ro s s

n eg li g en ce an d wi t h o u t an y m al ev o l en t i n ten t [,] ” In r e W a lt Di s n ey Co . Der i v.

Li t i g

. , 9 0 6 A2 d 2 7

, 6 4 (2 ) (Del . 2 0 0 6), m ean i n g an i n t en t “ h av i n g , s ho wi n g , o r

ari s in g fro m

i n t en s e o ft en v i ci o u s i l l wi l l , s p i te, o r h at red .”

h t t p s : // www.m erri am -web s ter.co m / d i ct i o nary / m al ev ol en t (ret ri ev ed Oct o ber 3

,

2 0 1 7 ). M al ev o l en t p ol i ces are t h o s e t h at are “ so p l ai n l y u n wi s e as t o b e

i rreco n ci l ab l e wi t h h o nes t . . . i n t el l i g en t [] ju dg m en t

. ” S a l n i t a Co r

p. v. W a l t er

Ho l di n g Co r p

. , 1 6 8 A.7 4 , 7 6 (Del . Ch . 1 9 3 3 ).

(i i) Th e d u t y o f l o ya l t y

.

“ T h e d u t y

o f l o y al t y m an d at es t h at t he b es t in t eres t o f t h e [co m p an y ] an d i t s

[ m e m b e r s ] t ak es p reced en ce o v er an y i n t eres t p o s s es s ed by a [m an ag er]

, o ffi cer o r

co n tro l l in g [m em

b er] an d n o t s h ared b y t h e [m em b ers ] g en eral l y .” McKen n a , s u p ra,

13at * 4 2 (II ) ( B ) (ci t at i o n an d p u n ct u at io n o m i t ted ). Th e du t y o f l o y al t y p rev en t s

m an ag ers fro m u s i n g “ t h ei r p o s i t i o n o f tru s t an d co nfi d en ce to fu rt h er t h ei r p ri v at e

i n t eres t s .” Ced e & Co

. v. Tech n i co l o r

, In c ., 6 3 4 A 2 d 3 4 5

, 3 6 1 (Del

. 1 99 3 ). (Al t h o u g h

C e de involve d c o r

por a te d ir e c t o r s, “ m an ag ers o f Del aware l i m i t ed l iab i li t y co m p a nie s

o we t h e sam e fi d u ci ary d u t i es as d i rect o rs o f Del aware co rp orat io ns wh en th e l i m i t ed

l i ab i l i t y co m

p an y ag reem en t d o es no t o p t o u t o f fi d u ci ary d u t i es .” M cKen na , s u p ra,

at * 4 1 (II) (B) (ci tat i o n s o m i tt ed ).)

(b ) Th e o p er a t i n g a g r eemen t

s d i d n o t excl ud e t h e d ef a u lt f i d u ci a r y d u t i es

.

Th e d efen d an t s arg ue t hat cert ai n p ro v i s i o n s i n t h e o p erat i n g ag reem en t s

(p ro v i s i o n s t hat were i d en t ical i n t he t h ird

, fo u rt h

, an d fi ft h am en d ed ag reem en t s )

ex cl u d ed t h e defau l t fi du ci ary d u t i es

. See 6 Del

. C. § 1 8-1 1 0 1 (c) (“ To t h e ex t en t t h at

,

at l aw o r in eq u it y , a m e m b e r o r m an ag er or o th er p ers o n h as d u t i es (i n cl u d i n g

fi du ci ary d u t i es ) t o a l i m i t ed l i ab i l i t y co m p an y o r t o an o th er m em

b er o r m an ag er o r

t o an o t h er p ers o n t h at i s a p art y t o o r i s o th erwi se b o un d b y a l i m i t ed l i ab i l i t y

co m p an y ag reem en t

, t h e m em b er’ s o r m an ag er’ s o r o t h e r p e rs o n ’ s du t i es m ay b e

e x p an d ed o r res tri ct ed o r el i m in at ed b y p ro v i s io n s i n t h e li m i t ed l i ab i l i t y c o m p a n y

ag reem en t ; p ro v id ed

, t h at t h e l im i t ed l i ab i l i t y co m p an y ag reem en t m ay n o t el i m i n at e

t h e i m p l i ed co nt ract u al co v en an t o f g o o d fai t h an d fai r d eal i n g

. ”).

14“ Draft ers o f an LLC ag reem en t m u s t m ak e t h ei r i n t en t t o el im in at e fi d u ci ary

d u t i es p l ai n an d u n am

bi gu o u s .” Feel ey , 6 2 A3 d at 6 64 (II) (D) (2 ) (ci t at i o n an d

p u n ct u at i o n o m it t ed ). Th e i n ten t m u s t b e ex p li ci t

. Kel l

y v. Bl u m , 2 0 1 0 Del . Ch

.

LEXIS 3 1 , * 4 6 (II) (B) (2 ) (a) (Del . Ch

. 2 01 0 ). In d eed , as d em o n st rat ed b y t h e

ci t at i o n s i n t h e m arg i n , t h e effect i v e el i m i n at i o n o f t h e d efau l t fi d u ci ary d ut i es

o ft en req u i res t h e u s e o f t h e wo rd s “ fi d u ci ary d u t i es ” o r t h e ex pres s s t at em en t t h at

al l d u t ies are el im i n at ed

. 3

3 See, e.g ., W

i g g s v. S u mmi t Mi d

s t r ea m Pa r t ner

s , LLC , 2 0 1 3 Del

. Ch

. LEXIS

8 4

, *3 7 -3 8 (III) (E) ( 2 ) ( D e l

. C h

. M ar. 2 8, 2 01 3 ) (“ Su m m i t s hal l h av e n o d u ti es ( i ncl ud i n g fi d u ci ary du t i es ) o r l i ab i l i t i es rel at i n g t heret o t o [M an ag em en t] o r t o t h e

o t h er M em

b ers , ex cep t as m ay b e s p eci fi cal ly pro v id ed [ i n t h e Ag reem en t ] an d

req u i red b y a n y p ro v i s i o n s o f t h e [Del aware LLC] A ct o r o t h er ap p l i cab l e l aw t h at

can n ot b e wai v ed

. Acco rd i ng l y , [Su m m i t ] s h al l b e en t i t l ed t o act s ol el y on i t s o wn b eh al f, an d i n i t s own i n t eres t s .”) (p u n ct u at i o n an d fo o t no t e o m i t t ed ); CNL-AB LLC

v. Ea s t er n Pr op er t

y Fu n d I S

PE (MS Ref

) LLC

, 2 01 1 Del

. Ch

. LEXIS 2 5

, *3 8 (II) (B) (2 ) (Del

. Ch

. 2 0 1 1 ) (“ Th e ex ecu t i o n , d el i v ery o r p erfo rm an ce b y t h e M an ag i n g
M em ber

. . . o f an y ag reem en t au t h o ri zed o r perm it t ed un d er t h i s Ag reem en t s h al l b e i n t h e s o le an d ab so l ut e d i s cret i o n o f t h e M an ag i n g M em b er wi th o u t co n s i d

er a t i o n

o f a n y o t h er ob l i

g a t i o n o r d

u t y, f i d u ci a r y o r o t h er wi s e , o f t h e Co m p an y o r t h e
M em bers an d s h al l n ot co ns t i t u t e a b reach b y t h e M an ag in g M em b er o f an y du t y t h at

t h e M an ag i n g M em

b er m ay o we t h e Co m

p an y o r an y No n

— M an ag i n g M em b e r o r

an y o t her Pers on s u n der t h is Ag reem en t o r o f an y d u ty s t at ed o r im p l i ed b y l aw o r

eq u it y .”) (em

p has is ad d ed an d fo o t n o t e o m i t t ed ); In r e At la s En er gy Res o u r ces

, LLC

, 2 0 1 0 Del

. Ch

. LEXIS 21 6

, *2 1 -2 2 (III) (A) (1 ) (Del

. Ch

. 2 0 1 0 ) (“ [W ] h en ev er a

p o t en t i al co n fl i ct of i n teres t ex i s t s o r ari s es b et ween an y A f f i l i at e o f t h e Co m

p an y ,

o n t h e o n e h an d

, an d t h e Co m p a n y o r an y Gro up M em b er, o n t h e o t h er, an y

res o l ut i o n or co u rs e o f act i on b y t h e Bo ard o f Di rect o rs i n res p ect o f s u ch co n fl i ct o f

i n t eres t s h al l b e p erm i t t e d a n d d eem ed ap pro v ed b y al l M em b ers , an d s h al l n ot

15No n e o f t h e p ro v i s i o n s t o wh i ch t h e d efen d an t s p o i n t i n cl ud e s u ch ex p l i ci t

l an g u ag e. Sp eci fi cal l y , t h e d efen d an t s arg u e t h at t h e fo ll o w i n g p ro v i s io n s

el i m i n at ed an y

d efau l t d u t y

o f care o wed b y m em

b ers an d d i rect o rs :

4 .2 Li m ited Li a bi l i ty ; Ex cul pa ti on

. Ex cep t as ex p res s l y s e t f o rt h i n

t h i s A g reem en t o r req u i red b y l aw, n o M em b er s hal l b e p ers o n al l y l i ab l e

fo r an y d eb t

, o bl i g at io n, o r li ab i l i t y o f t h e Co m pan y , wh et h er ari s i n g i n

co n t r act

, t o rt

, or o t herwi s e, s o l el y by reas o n o f b ei n g a Mem b er o f th e

Co m p an y

. Nei t h er th e Co m

p an y n o r an y Di rect o r or o ffi cer s h al l h av e

an y ri g h t cl ai m , o r cau se o f act i o n ag ai n st an y M em b er o f t h e Co m

p an y

ari s i ng o u t of s u ch M em

b er h av i n g act ed o r fai l ed to act i n acco rd an ce

wi t h s uch M em

b er’ s ri g h t s o r o b l ig at i o n s as a M em b er h ereu n d er.

co n st i t u t e a breach o f t h i s Ag reem en t

. . . o r o f a n y du t y exi s ti n g at l a w, i n eq u i t y o r

o t h er wi s e, i n cl u d i ng an

y f i d u ci ar y d u t y , i f th e res o l u ti o n o r co u rs e o f act io n i n res p ect

o f s u ch co n fl i ct of i n t eres t is (i ) ap p ro v ed b y Sp eci al A p p ro val

, (i i ) ap p ro v ed b y t h e

v o t e o f ho l ders o f a m ajo ri t y o f t h e Ou ts t an d i n g Co m m o n U n i t s (ex cl u d i n g Co m m o n Un i ts h el d b y i nt eres ted p art i es ), (i i i ) o n t erm s n o l es s fav orab l e t o t he Co m p an y t h an

t h o s e b ei n g g en eral ly av ai l ab le t o o r av ai l ab l e fro m u n rel at ed t hi rd p art i es o r (i v ) fai r

an d reas o n ab l e t o t he Co m p an y , t ak in g i n t o acco u n t t h e t o tal i t y o f t h e rel at i o n s h i p s b et ween t h e p art i es i nv o l v ed (i n cl ud i n g o th er tran sact i on s t h at m ay b e p art i cu larl y fav o rab l e t o th e Co m

pan y ).”) (em

p h as i s ad d ed an d fo ot no t e o m it t ed ); F i s k Ven t u r es

, LLC v. S eg a l

, 2 0 0 8 Del

. Ch

. LEXIS 1 5 8

, *4 1

- 4 2 ( I I I ) (C) (Del

. Ch

. 2 0 0 8 ) (“ [T] h e [l im i t ed l i ab i l i t y co m

p an y a g r eem en t ] el i m i n at es fi d uci ary d ut i es t o t h e m ax i m u m

ex t en t p erm i t t ed b y l aw b y fl at l y s t at i n g t h at m em b ers h av e n o d u t i es ot h er th an t h o s e

ex p res s l y art i cu l at ed i n t h e Ag reem en t

. Becau s e t h e Ag reem en t d o es n o t ex p res s l y

art i cu l at e fi d u ci ary

o bl i g at i o ns , t h ey

are el im i n at ed .”).

165 .3 Li m ited Li a bi l i ty ; Ex cul pa ti on

. Ex cep t as ex p r e s s l y s et fo rt h i n

t h i s A g reem en t o r req u i red b y l aw, n o Di rect o r s h al l b e p ers o n al l y l i ab l e

fo r an y d eb t, o b l i g at i o n , o r l i ab i l i t y o f t he Co m p an y , wh et h er ari s i n g i n

co n t ract

, t o rt

, o r o t h erwi s e, s o l el y b y r e a s o n of b ei n g a Di rect o r o f th e

Co m p an y

. N ei th er t h e Co m

p an y no r an y M em

b er o r O ffi cer sh al l h av e

an y ri g h t, cl ai m , o r cau s e o f act i o n ag ai n s t an y Di rect o r ari s i n g o u t o f

s u ch Di rect o r’s h av i n g act ed o r fai led t o act i n acco rd an ce wi t h s u ch

Di rect o r’ s ri g h t s o r o b l i g at i o n s h ereu n d er.

Th e d efen d an t s arg u e t h at t h e fo l lo wi n g pro v i si o n el i m i n at ed t h e d efau l t d u t y

o f l o y al t y :

4 .1 3 Mem bers Ma y Pa rti ci pa te i n Other Acti v i t i e s

. M em bers an d

t h ei r Affi l i a t e s an d D i rect o rs , ei t h er i n d i vi d u al l y o r w i t h o t h ers , sh al l

h av e t h e ri g h t t o par t i c i p a t e i n o t her b u s i n es s v en t u res o f ev ery k i n d

, wh et h er o r n o t s u ch ot h er bu s i n es s v en t ur e s c o m p et e wi t h T he

Co m p an y

. N o M em

b er, act i n g in t h e cap aci t y o f a M em b er, sh al l be

o b l i gat ed t o o ff

e r t o t h e Co m

p an y o r t o t h e o th er Mem b ers an y

o p p o rt un i t y t o p art i ci pat e i n a ny s u ch o t h er b us i n es s ven t u re. Nei t h er th e

Co m p an y n o r th e o th er M em

b ers s hal l h av e an y ri g h t t o an y i n co m e o r

p ro fi t d eri v ed fro m

an y s u ch o t h er b u s in es s v en t u re o f a M em b er.

Th e d e f e n d an t s al so arg u e t h at t h e en ti re ag reem en t p arag rap h el i m i n at es

d efau l t fi d u ci ary

d u t ies :

1 4 .1 Enti re Ag reem ent

. T h i s A g reem en t

, i n cl u di n g t h e sch ed u l es

at t ach ed h eret o, an d an y su b s cri p t i o n ag reem en t ex ecu t ed b y th e

17M em

b ers rel at i v e t o t h ei r res p ect i ve M em b ers h i p I n teres t s , co n s t i t ut e

t h e en t i re ag reem en t am o n g t h e M em b ers w i t h r e s p ect to t he s u b ject

m at t er hereo f, an d s up ers e de a l l p ri or an d co n t em p o ran eo u s ag reem en t s ,

rep res en t at i o ns , an d u n d ers tan d i n gs of t h e p art i es

. No p art y h eret o sh al l

b e l i ab l e n or b o u n d t o t h e o t h er i n an y m an ner by an y warran t i es ,

rep res en t at i o ns , o r co v en an t s w i t h res p ect t o t h e s u b ject m at t er h ereo f

ex cep t as s peci fi cal l y

s et fo rt h h erei n

.

No n e o f th es e p arag rap hs p l ai n l y , u n am b i g u o us l y , an d ex p l ici t l y el i m i nat e d efau l t

fi du ci ary d u t i es

. Co n s eq u en t l y , we fi n d

, a s d i d t h e t ri al co u rt

, t h e defau l t fi d u ci ary

d u t i es ap p l y t o t h e d eci si o n s t h at M i l l er ch al l en g es h ere.

(c) Co er ci o n

.

M i l l er arg u es t h at t h e d efen d an t s b reach ed t he fi d u ci ary d u ti es t h ey o wed h i m

b y co erci n g h im t h ro u g h eco n o m i c d u res s t o s i g n am en d m en t s t o Fi b erl i g h t ’ s

o p erat i n g ag reem en t t hat ad v an t ag ed d e f e n d an ts o v er Mi ll er by red u ci n g t h e v al u e

o f M i l l er’ s i nt eres t i n th e co m p an y

. M i ll er cl ai m s t h at t h i s eco n o m i c d ures s t o o k t h e

fo rm o f t h reat s t o t erm i n at e h i m : h e was t o ld t o s i g n t h e ag reem en t s o r h e wo u l d b e

fi red

.

He arg u es t h at cri t i cal ch an g es res u l ted fro m t h e co erced ex ecu ti on o f t h e t h i rd

an d fi ft h ag reem en t s : t h e m an ag em en t m em bers o f Fi berLi g h t were s tri p ped o f an y

m ean i n g fu l co n t ro l ; t h e d efen d an t s v ia Ly n ch g ai n ed v o t i n g co n t ro l o f t he b o ard o f

18d i rect o rs an d t he au t h o ri t y t o t erm i n at e m an ag ers ; t h e defen d an t s t o o k a co nt ro l l i n g

i n t eres t i n t h e eq u i t y o f Fi b erLi g h t ; t h e i n cen t i v e i n t eres t s t ru ct u re was i n t r o d u c ed ;

an d th e p o s s i b l e v al u e o f t h e i n cen t i v e in t eres t w as cap p ed

, ch an n el i n g ex ces s v al u e

t o t h e in v es t o r i nt eres ts

, h el d al m o s t en t i rel y b y t h e d efen d an t s

. In es s en ce, M i l l er

co n ced es t h at t h e op erat i n g ag reem en t s al l o wed th e d efen d an t s t o t erm i nat e h i m an d

t o red eem h i s m em

ber s h ip i n t eres t i n t h e co m pan y , b u t arg u es t h at t h e d efen d an t s

m ay no t rel y o n t h e o perat i n g ag reem en t s b ecau s e h e w as co erced i nt o s i g ni n g t h em

.

(i ) Th i r d a m en d ed a g r eemen t

.

M i l l er’ s cl ai m t h at t h e d efen d an t s b reach ed fi d uci ary d u t i es by co erci n g h i m

t h ro u g h eco n o m i c d u res s i n t o s i g n i n g t h e t hi rd am en ded ag reem en t fai l s

. Th e

d efen d an t s were n o t m ajo ri t y m em b ers wh en M i l l e r si g n ed t h e t h i rd am en d ed

ag reem en t , s o t h ey

o wed h i m

n o fi d u ci ary

d u t i es at t h at t i m e.

U n d e r t h e s eco n d am en d ed ag reem en t, Th erm o T el eco m Part n ers h ad o n l y a

6 .4 67 8 m em

b ers h i p in teres t i n Fi b erLi g h t an d N T As s et s h ad n o i n t eres t

. “ [M ] i n o ri t y

m em b ers o f an LLC d o n o t o we fi d u ci ary d u t i es t o o t h er m em b ers .” Ma r i n o v. Gr u

p o

Mu n d i a l Ten ed

o r a

, S .A.

, 8 1 0 FSu p p 2 d 6 0 1

, 6 0 8 (S.D.N.Y. 20 1 1 ) (ap p l y i n g D el aware

l aw). Th e t ri al co u rt o b s erv ed i n t h e o rd er g ran t i n g su m m ary j u d gm e nt t o t h e

d efen d an t s ,

19[ u ] n der t h e Seco n d Am en d m en t

, Th erm o Tel eco m o nl y h el d 6 .4 6 7 8 %

i n Fi b erLi g h t ; Mi l l er, Co y n e, an d an o t h er i nd i v i d u al to g et h er h el d th e

m ajo ri t y i n t eres t

. Th erm o Tel eco m b ecam e a m ajo ri t y m em b er by v i rt ue

o f i t s d eb t t o eq u i t y co n v ers i o n , w h ich was m em o ri al ized i n t h e T h i rd

Am en dm en t

. B efo re t h e t h i rd Am en d m en t was ex ecu t ed

, T herm o

Tel eco m d i d n o t ho l d a m ajo r i t y m em b ers h i p i n t eres t an d an y d u res s

w o u l d b e b ecau s e o f [i t s ] l arg e cred i t o r p os i t i o n i n Fi b erLi g h t an d n o t

b y v i rt u e o f [i t s ] s tat u s as Fi b erLi g h t m em b ers

.

Bu t “ [i ] n co n t ras t to a co n t ro l l i n g [m em b er]

, a [l im it ed l i ab i li t y co m p an y ’ s ] cred it o r

— ev en o n e t h at own s a m ajo ri t y o f t h e [co m p an y ’ s ] d eb t

— d o es n ot o we fi d u ci ary

d u t i es t o [m em

b e r s ]. I t i s wel l es t ab l i s hed i n Del aware co rp orat e l aw t h at t h e

o b l i g at i o ns o f cred i t ors to [b u s i n es s ] d eb t o rs are g ov ern ed by co n t ract

, no t fi d u ci ary

d u t y p ri n ci p l es .” H

a mi l t o n P a r tn er

s, L.P. v. Hi

g h l a n d Ca

p i t a l Mg mt

., L.P.

, 2 0 1 4 Del

.

Ch . LEXIS 7 2 , * 4 2 (III) (C) (Del . Ch . 2 0 1 4 ) (ci t at i o n o m i t t ed ).

M o rev er, t h e u n di s pu t ed ev i d en ce i s t h at at t h e t i m e M i l l er s i g n ed t h e t h i rd

am en d ed ag reem en t

, t h e d efen d an t s l ack ed th e au t h o ri ty to t erm in at e h i m

. Un d er t h e

s eco n d ag reem en t

, Th erm o Tel eco m Part n ers h ad t h e ri gh t t o des i g n at e o ne o f t h e

t h ree d i rect o rs

. M il l er an d Co y ne were t he o t h er t wo di rect o rs an d h el d th e o t h er t wo

v o t es

. NT As s et s was n o t a m em b er, h ad n o v o i ce in ch o o si n g t h e d irect o rs , an d h ad

n o vo t e. Th e s eco n d ag reem en t g av e t h e b o ard t h e ri g h t t o rem o v e o ffi cers

. Th u s t h e

20d efen d an t s , wi t h on e v o t e t o t h e i n d i v i d u al m em bers ’ two

, l ack ed t he p o w e r t o

t erm i n at e M i l l er fro m h i s p o s it i o n at t h e t i m e h e s i g n ed t h e t h i rd am en d ed ag reem en t

.

M i l ler co n ced es t h i s fact i n h i s ap p el l at e b ri ef, s t at i n g t hat i t was t h e th i rd am en d ed

ag reem en t i t s el f t h at g ran t ed Ly n ch

, as t h e des i g n at ed rep res en t at i v e o f t h e Th erm o

Co m p an i es , t h e au t h o ri t y t o t erm i n at e M i l l er.

So t h e t ri al co u rt d i d n ot err b y gran t i ng t h e defen d an t s s u m m ary j u d gm en t o n

M i l ler’ s cl ai m t hat th e d efen d an t s b reach ed fi d u ci ary d u ti es w h en t h ey fo rced h i m to

s i gn th e t h i rd am en ded ag reem en t by co erci n g h im wi th t h reat s of t erm in at io n

. T h at

cl ai m i s d efeat ed b y

t h e u n di sp u t ed fact s

.

(i i) Fo ur t h a n d

f i f t h a men d ed a g r eemen t

s.

As o b serv ed ab o v e, M i ll er cl ai m s t h at t h e d efen d an t s wro n g fu l l y d i m i n i s h ed

h i s m em bers h i p i nt eres t i n Fi b erLi g h t

. An d al t h o u g h h e co n ced es th at t h e op erat i n g

ag reem en t s al l o wed F i b erLi g h t t o do s o , h e i m p li ci t l y arg u es t h at t h e ag reem en t s

s h o u ld be d i s reg ard ed b ecau s e h i s co n s en t to th o se ag reem en t s was co erced

. Bu t t h e

fai l u re o f M i ll er’ s cl ai m as t o th e t h i rd am en d ed ag reem en t d efeat s h i s cl ai m s t h at t h e

d efen d an t s b reach ed t h ei r fi du ci ary d u t i es b y en fo rci n g t h e fo u rt h an d fi ft h am en d ed

ag reem en t s

. Th i s is b ecau s e it was t h e t h i rd am en d ed ag reem en t th at g a v e T h erm o

Tel eco m Part n ers an d NT As s e t s t h e ri g h t t o en act t he fo u rt h an d fi ft h am en d ed

21ag reem en t s , ev en w i t ho u t M i l l er’ s co n s en t

. Si m p l y p u t

, th e d efen d an t s h a d t h e

u n i l at eral ri g h t –- g iv en t o t h em u n d er t h e th i rd am en d in g o p erat i ng ag reem en t

— to

en act t h e fo u rt h an d fi ft h am en d ed op erat i n g ag reem en t s, an d t h ei r ex erci s e o f t h ei r

ri gh t s u n d er t h o s e ag reem en t s d i d n o t b reach t h e co m m o n l aw d efau l t fi d u ci ary d u ti es

o f care an d l o y al t y

o wed t o M i l l er.

M i l l er h as n o t ci t ed

, an d we h av e n o t fo u n d

, an y Del aware au t h ori t y s u p p o rt i n g

t h e p ro p o s i t i o n t h at a p art y t ak i ng act i o n s p eci fi cal l y a u t h o ri zed u n d er a l i m i t ed

l i ab i l i t y co m

p an y ag reem en t b reach es a d efau l t fi d uci ary du t y

. Rat h er, Del aware l aw

i s cl ear t h at p ro v is i o n s in a l i m i t ed l iab i l i t y co m p an y ’ s o p e r a ting a g r e e m en t s u p ers ed e

d efau l t fi d u ci ary d u t i es

. See 2 0 0 9 Ca i o la Fa mi l y Tr u st v. PW

A

, LLC

, 2 01 4 Del

. Ch

.

LEXIS 2 6 1

, * 36 -3 7 (5 ) (C) (Del

. Ch

. 2 0 1 4 ). (“ A l i m i t ed l i ab i l it y co m p an y o rg an i zed

u n d er Del awar e la

w m a y displa c e f

idu ci ary d u t i es al t og et h er o r t ai l o r t h ei r ap p l i cat i o n

b y t h e t erm s o f i t s op erat i n g ag reem en t.”) (ci t at i o n an d punct u at i o n o m i t t ed ). Th e t ri al

co u rt di d n o t err i n g ran t i n g s u m m ary ju d g m en t o n an y cl ai m s bas ed o n co erci o n o f

t h e fo u rt h an d fi ft h am en d ed ag reem en t s

.

(b ) Mi l l er ’s t er mi n a ti o n a n d t h e r ed emp t i o n o f h i s i n ter es t

.

M i l l er arg u es t h at wh et h er t h e d efen dan t s b reach ed t h e d efau lt fi d u ci ary d u ti es

o wed t o hi m b y red eem i n g h i s i n t eres t i n t h e co m p an y u p o n h i s t erm i n at i o n d ep en d s

22u p o n d i s p u t ed i s s ues o f fact

. (M i l ler ack n owl ed ges h e was an em p l oy ee at wi l l an d

h e i s n o t s eek i n g w ro n g fu l t erm i n a t io n d am ag es

. ) Bu t a p art y t ak i n g act i o n

s p eci fi cal l y au t h o ri zed u n d er a l i m i t ed l i ab i l i t y co m pan y ag reem en t d o es n o t b reach

a d efau l t fi d u ci ary d u t y

. 2 0 0 9 Ca i o l a Fa mi ly Tr u s t

, s u pra. M i l l er co n ced es t h at t h e

o p erat i n g ag reem en t s au t ho ri zed t h e red em pt i o n o f h i s i n teres t s . Th e t ri al co u rt d id

n o t err i n g ran ti n g s u m

m ary ju dg m en t o n t hi s cl ai m

.

(c) Rej ect i o n o

f o f f er s t o p u r ch a se Fi b er

Li g h t

.

M i l l er a r gue s tha t w he ther t h e d efen d an t s b reach ed t h ei r fi d uci ary d u t i es t o h i m

b y reject i n g o ffers t o p u rch as e Fi b erl i g h t d ep en d s u p o n d i s p u t ed i s s u es o f fact

. Th e

d efen d an t s co u n t er, an d t h e t ri al co u rt fo u n d

, t h at Fi b erLi gh t n ev er recei v ed an y s u ch

o ffers . Th i s i s a d i s p u ted i s s u e o f fact

.

Fi rs t we ad d res s t h e d efen d an t s ’ arg u m e n t t h at M i l l er wai v ed t h i s cl ai m by

r a i s i n g i t fo r t h e fi rs t t i m e i n hi s res p o ns e t o t h e d efen d an t s ’ m o t i on fo r s u m m ary

ju d g m en t

. In h is am en d ed co m p l ai n t

, M il l er al l eg ed t h at t h e defen d an t s reject ed “ at

l eas t o n e o ffer t o p urch as e Fi b erLi g h t at a s u b s t an t ial p ro fi t t o b ot h t h e m ajo ri t y an d

m i n o ri t y m em

b ers ,” an d t h at “ [b ]y th i s an d o th er co nd u ct

. . . [t he d efen d an t s ]

b reach ed t he fi d u ci ary du t i es t h ey o wed t o M i l l er.” Co nt rary to t h e d e f e n d a n t s ’

p o s i t i on , M i ll er “ q u i t e cl e arl y p led cl ai m s ” th at t h e d efen d an t s b reach ed t h ei r

23f

i d u ci ary d u t i es t o hi m by reject i n g o ffers t o pu rch as e Fi berl i g h t

. Du f f i el d v. C h u i

,

3 1 4 Ga. Ap p . 2 1 4 , 2 1 5 n . 3 (7 2 3 SE2 d 5 0 6) (2 01 2 ).

W e fi nd no m eri t i n [t he d efen d an t s ’ ] co n t en t i on th at t h is a r g u m en t i s

n o t p ro p erl y befo re u s b e c a u s e [ Mi ll er] d id n ot rai s e i t b el o w. T he

Geo rg i a Ci vi l Pract i ce Act req u i res o n l y n o ti ce p l ead in g an d

, u n d er th e

Act

, p l ead i n gs are to b e co n s t ru ed l ib eral l y an d rea s o n a b l y t o ach iev e

s u b s t an t i al j u s t i ce co n si s t en t wi th t h e s t at u t o ry req ui rem en t s o f t he Act

.

Ru cker v. Co l u mb i a Na t

. In s

. C o

. , 30 7 G a. Ap p

. 4 4 4

, 4 4 6 (1 ) (a) (7 0 5 SE2 d 2 7 0 )

(2 0 1 0).

As fo r t h e m eri t s o f M i l l er’ s arg u m en t

, we ag ree t h at wh et h er t h e d efen d an t s

b reach ed d efau l t fi d u ci ary d u t i es b y reject i n g offers to p u rch as e Fi b erLi gh t d ep en d s

u p o n d i s p u t ed i ss u es o f fact

. Al t h o u g h t h e defen d an t s d en i ed t h ere were an y s u ch

o ffe r s , M i l l er t es t i fi ed ab o u t o ffers t o p u rch as e Fi b erLi g ht fro m Qu an t a Serv i ces ,

Gen eral At l an t i c, an d Su m m i t LLC. Acco rd i ng t o M i l l er, Ly nch u n il at eral ly reject ed

al l t h ree o ffers

.

M i l l er tes ti fi ed t h at i n 20 0 8

, Qu an ta s en t Fi b erLi g h t a let t er of i n ten t

, wh i ch h e

d es cri b ed as a fi rm b u t no t bi n d i n g o ffer t o bu y t h e co m p an y , b u t L y n ch reject ed i t

wi t h o u t ex p l an at i o n

. Ly

n ch t es t i fi ed t h at t h e co m

m u n i cat i o n fro m Qu an t a was a l et t er

24o f i nt en t

, n o t an o ffer, an d t h at h e h ad d i scu s s io n s w i th t he s en i o r m an ag em en t t eam ,

b u t “ t hey ch os e n o t t o g o fo rward .”

In 2 0 11

, acco rd i n g t o M i l l er, Fi b erLi g h t e n g a g e d t wo fi rm s to i n v es t i g at e

s el l i n g t h e co m

p an y , res u lt i n g i n t h e i d en t ifi cat i o n o f ei g h t p o ten t i al p u rch as ers an d

fi nal o ffers t o pu rch as e. M i l l er t es t i fi ed t h at Gen eral A t l an t i c was t h e h ig h es t b i d d er

an d m ad e a fi rm offer pen d i n g d u e d i l i gen ce. Du ri n g d u e d il i g en ce, Gen eral At l an t i c

fo u n d s o m e acco u n t i n g i ss u es an d red u ced t h e o ffer p ri ce

. A c c o rd i n g t o M i l l er,

Ly n ch was o ffen d ed becau s e Gen eral At l an ti c h ad s ai d t he offer pri ce was fi rm , an d

h e cu t o ff n eg ot iat i o n s wi t h o u t c o n s u l t in g t h e m i n o ri t y m em b ers , i n cl ud i n g M i l l er.

Ly n ch

, o n t h e o t h er h an d, ack n o wl ed g ed th at Gen eral A tl an t i c “ p art i ci pat ed i n t h e

s al e p ro ces s th at w e en g ag ed in i n 2 0 1 1

, ” b u t tes t ifi ed t h at “ t h ey n ev er g o t t o t h e

p o i n t wh ere t h ey

h ad a fi rm

p ri ce.”

Fi n al l y , M il l er t es t i fi ed t h at i n 2 0 11 o r t h e s u m m er o f 2 0 1 2, Su m

m i t LLC

s u b m i t t e d a n o f

fer i n ex ces s o f $ 4 0 0 m i l l i o n fo r Fi b erLi g h t wi t h n o co n t i n g en ci es ,

p en di n g d u e d il i gen ce. Acco rd i n g t o M i l l er, Su m m i t h ad p ro ceed ed t h ro u g h t h e d u e

d i l i g en ce p ro ces s

. Bu t Ly n ch reject ed t h e o f

f er b ecau s e Su m

m i t red u ced th e o ffer

p ri ce. Ly n ch d i d n o t co n su l t M i l l er b efo re reject i n g t h e o ffer. L y n ch

, o n th e o t h er

h an d, t es t i fi ed t h at “ Su m m i t ch o s e n o t t o m o v e fo rwa r d ” b e cau s e i t was n ot

25co m fo rt ab l e wi t h cert ai n p o ten t i al Fi b erLi ght lia bilitie s, a nd S um

m it’ s i nqui ri es n ev er

p ro ceed ed t o t h e d ue d i l i g en ce s t ag e.

M i l l er t es ti fi ed t h at h e an d t h e o t h er m i n ori t y m em b ers had n o i n fl u en ce as to

w h et her t o accep t an y o ffers

. In i t i al l y , h e w as “ u nd er t h e as su m p t io n

. . . t h at t h e

m an ag em en t t eam act u al l y had a d eci s i o n p ro ces s i n t h e s al e o f t h e co m p an y an d t h at

we co u l d i n fl u en ce t h at sal e wi t h J i m [Ly n ch ]

. Lat er [i n 2 0 08 ] [h e] fo u n d o u t [t h ey ]

d i d n ’ t h av e an y in fl u en ce rel at ed t o t h at an d it w as s o l el y h i s d eci s i o n

. . . .” He ad d ed

t h at h e “ h ad n o d eci s i o n -m ak i ng cap ab i l i t i es at al l . Th at i t was al l J i m Ly n ch .”

Gi v en t h i s co n fl i ct in g tes t i m o n y , we fi n d t h at wh et h er t h e d efen d an t s reject ed

o ffers t o pu rch as e Fi b erLi g ht

, t h ereb y b reach i n g defau l t fi d u ci ary d ut i es , d ep en d s o n

d i s p u t ed i s s u es o f m at eri al fact

. See g en eral l y Ga nt l er v. St ep h en s , 9 65 A2 d 6 9 5

, 7 0 4

-

7 0 9 (I) (Del

. 2 0 0 9 ). Co n seq u en t l y , t h e t ri al co urt erred b y g ran t i n g s u m m ary

ju d g m en t t o t h e d efen d an ts o n t h is cl ai m

.

3

. S t at ut e o

f l i mi t a t io n

.

M i l l er arg ues t hat t h e t ri al co u rt erred b y ru l i n g t h at h is cl ai m s ari s i n g fro m t h e

t h i rd am en d ed o p erat i n g ag reem en t are b arred b y t h e s t at u t e o f l i m i t at i o n

. Gi v en o u r

h o l d i n g i n Di v is i o n 2 (c) (i ) t h at t h e d efen d an t s are en t i t l ed t o s u m m ary j u d gm en t o n

26t h e cl ai m s ari s in g fro m t h e t h i rd am en d ed o p erat i n g ag reem en t

, we d o n o t reach t h i s

i s su e.

4

. Br ea ch o

f co ven a n t

o f g o o d f a i t h a n d f a i r d ea l i n g

.

M i l l er arg u es t h at t h e t ri al co u r t e r red i n g ran ti ng t h e d efen d an t s s u m m ary

ju d g m en t o n h is cl ai m fo r b reach o f t he co v en an t o f g o o d fai t h an d fai r deal i n g

. Th e

t ri al co urt ru l ed t h at t h ere was n o s u ch b reach b ecau s e t he t erm s o f t h e ag reem en t s

al l o wed t h e d ef

e n d a n t s t o t erm i n at e M i l l er an d red eem h i s m em b ers hi p i n t eres t s

.

M i l ler arg u es t h at t h e reas o n i ng i s fl awed b ecau s e he was co erced i nt o s i gn i n g t h e

am en d ed ag reem en t s . Fo r t h e reas o ns d i scu s s ed ab o v e, t h i s arg u m en t l ack s m eri t

.

M i l l er al so arg u es t h at reg ard l es s o f wh et h e r t h e ag reem en t s al l o wed t h e

d efen d an t s t o red eem h i s m em b ers h i p i n t eres t s , h e s h o u l d be al l o wed t o p u rs u e t h i s

cl ai m becau se t h e co v e n a n t s p ro t ect reas o n ab l e ex p ect at io n s , an d h e ex p ect ed a

s u b s t an t i al ret u rn on h i s i n v es t m en t i n Fi b erLi g h t

, an ex p ect at i on t h at was co n fi rm ed

wh en Ly n ch t o l d h im

t h at Fi b erl i g h t wo u l d “ do ri g h t” b y h i m

.

Th e i m p l i ed co v en an t o f g o o d f a i t h an d fai r deal i n g at t ach es t o

ev ery co n t ract

, an d req ui res a p art y i n a co nt ract u al rel at i o n s h i p t o

refrai n fro m a rb i t rary o r u n reas o n ab le co n du ct wh i ch h as th e effect o f

p rev en t i n g th e o th er p art y t o t h e co n t ract fro m recei v in g t h e fru it s o f th e

b arg ai n

. Nev ert h el es s , Del aware l aw req u i res th at t h e co n t ract ’ s ex p res s

t erm s b e h o n o red

, an d p rev en t s a p art y wh o h as aft er-t h e-fact reg ret s

27fro m u si n g t h e i m p l i ed co v en an t o f g o o d fai t h an d fai r d eal in g t o ob t ai n

i n co u rt wh at i t co u ld n o t g et at t h e b arg ai n in g t ab l e. [T] o s tat e a cl ai m

fo r b reach o f t h e i m

p l i e d c o v e n an t o f go o d fai th an d fai r d eal i n g, a

p l ai n t i ff m

u s t al l eg e a s p eci fi c o b l i g at i o n i m p li ed i n th e co n t r act

, a

b r e a c h of t h at o bl i g at io n, an d res u l t i n g d am ag es

. Th i s [c] o u rt can n o t

invoke a n i m

plie d co v en an t

, h o wev er, t o re-wri te t h e ag reem en t b et ween

t h e p art i es , an d s h o ul d b e m o st ch ary ab o u t i m pl y in g a co n t ract ual

p ro t ect i o n wh en t h e co n t ract co u ld eas i l y h av e b een draft ed t o ex pres s l y

p ro v i d e fo r i t

.

CMS In ves t men t Ho l di n g

s

, LLC v. Ca s t l e , 2 0 15 Del

. Ch

. LEXIS 1 69

, * 55 -5 6 (IV) (C)

(Del

. Ch

. 20 1 5 ) (ci t at i o n s an d p u n ct u at i o n o m i t t ed )

. “ Ex i s ti ng co n t ract t erm s co n t ro l

,

h o wev er, s u ch t h at im

p li ed g o o d fai th can n o t b e u s ed to ci rcu m v en t t h e p art i es ’

b arg ai n , o r t o creat e a free-fl oat i n g du t y u n at t ach ed t o t he u n d erl y in g l eg al d o cu m en t

.

Th u s, o n e g en eral l y c a n n o t b as e a cl ai m fo r breach o f t h e i m pl i ed co v en an t o n

co n du ct au th o ri zed by t h e t erm s o f t h e ag reem en t.” Du n l a p v. S t a t e F

a r m Fi r e & Ca s

.

Co

. , 87 8 A2 d 4 3 4

, 4 4 1 (C) (Del

. 2 0 0 5 ) (ci t at i o n s an d p un ct u at i o n om i t t ed ). In o t h er

wo rd s , “ [a] p art y d o es n o t act i n b ad fai t h b y rel y i n g on co n t ract p ro v i s i o ns fo r wh i ch

t h at part y b arg ai ned wh ere d o i n g s o s i m p l y l i m i t s ad v an t ag es t o an o th er p art y .” Al p h a

Ba l a nced F

u n d

, LLLP v. Ir o n g a t e Pe r

f o r m a nce F

un d

, LLC

, 3 4 2 Ga. Ap p

. 9 3,

281 0 2 -1 0 3 (1 ) (b ) (8 0 2 SE2 d 3 5 7 ) (2 0 1 7 ) (ap p l y i n g Del aware l a w; ci t at i o n an d

p u n ct u at i o n o m it t ed ).

M i l l er d oes n o t di s pu t e t h at t h e act i o n s of wh i ch h e co m p l a i n s were al l o wed

u n d er th e ag reem en t s

. H e wo u l d i m p l y a co n t ract t erm t hat p rev en t ed t he d efen d an t s

fro m ex erci s in g ex p l i ci t co n t ract t erm s

. Bu t “ t he i m pl i ed co v en an t can n ot b e i n v o k ed

t o o v erri d e ex p res s p r o v i s i o n s o f a co n t ract

. ” Ku r o d a v. S PJS Ho l d i ng

s

, LLC

, 9 7 1

A2 d 87 2

, 8 8 8 (Del

. Ch

. 2 0 0 9 ). See g en eral l y Nemec v. S h r a d er , 9 9 1 A 2 d 1 1 2 0

, 1 1 2 2

-

1 1 2 8 (Del

. 2 01 0 ) (co m

p an y d i d n o t v i o l at e g o o d fai t h co ven an t b y ex erci s i n g o p t i o n

t o red eem ret i red s t ock h o ld ers ’ sh ares t o t h e b en efi t o f w o r k i n g s t o ck h o l d ers ;

co m p an y , wh o s e di rect o rs st o od to b en efi t fro m red em p t i o n , ex erci s ed an ex p res s

co n tract ual ri g ht ). Co m

p are Mer r i l l v. Cr o th a ll -Amer i ca n

, In c. , 6 06 A2 d 9 6

, 1 0 1 (V)

(Del

. 1 9 92 ) (wh et h er e m p l oy er b reach ed i m

pl i ed co v en an t o f g o o d fai t h an d fai r

d eal i ng b y i n d

u ci n g em p l o y ee t o en t er em

p l o y m en t co n tract t hro u g h frau d

, d ecei t

, o r

m i s rep res en t at i o n was a ju ry q u es t i o n ).

Fi n al l y , i n su p p ort o f h i s arg u m en t th at t h e defen d an t s b reach ed t h e d u t y o f

g o o d fai t h b y red eem i n g h i s m em b ers hi p i nt eres t

, M il ler po i n t s t o a pro v i s i o n i n t h e

ag reem en t s t at i n g t hat “ T h e rem o v al o f an Offi cer w h o i s al s o a M em ber s h a l l n ot

affect t h e ri g h t s o f s u ch Offi cer as a M em b er an d s h a l l n o t i n i t s el f co n s t i t u t e t h e

29wi t h d rawal

, res i gn at i o n, ret i rem en t

, o r ex p u l s i o n o f s u ch M em b er.” He a r g u es t h at

red eem i n g h i s i n t e r e s t u po n h i s t erm i n at i o n affect ed h i s ri g h t s as a m em b er in

v i o l at i o n o f t h i s p ro v i s i o n

. “ Th e li m i t i n g as p ect o f t h i s arg u m en t is t h at s p eci fi c

l an g u ag e i n a co n t ract co n tro l s o v er g en eral l an g u ag e, an d wh ere s p eci fi c an d g en eral

p ro v is i o n s co n fl i ct

, t h e s p eci fi c p ro v i s i o n o rd i n a r i l y q u al i fi es t h e m ean i n g o f t h e

g en eral o n e.” W

i g g s , s u pra, 2 0 1 3 D e l

. Ch

. LEXIS 8 4

, at * 3 8 (III) (E) (2 ) (ci t at i o n

o m it t ed ). As d i s cu s s ed ab o v e, t h e ag reem en t s p eci fi cal l y al lo wed t h e d efen d an t s t o

red eem M i l l er’ s i n teres t s

. T h e t ri al co u rt di d n o t e rr b y gran t in g t h e d efen d an t s

s u m m ary ju d g m en t o n t h i s cl ai m

.

5

. Rema in i n g

cl a i ms

.

M i l l er arg u es t h at we sh o u l d rev ers e t h e g r a n t o f s um m ary ju dg m en t t o t h e

d efen d an t s o n h i s cl ai m s fo r ai d i n g an d ab et t i ng a b reach of fi d u ci ary d u t y , breach o f

c o n t ract

, o p p res s i o n , d ecl arat o ry ju d g m en t

, pu n i t i v e d am ag es , an d at to rn ey fees

b ecau s e t h o s e ru l i n g s were b as ed en t i rel y o n t h e t ri al co u rt ’ s d eci si o n o n h i s b reach

o f fi d u ci ary d u t y an d breach o f t h e co v en an t o f g o o d f a i t h an d fai r d eal i n g cl ai m s

.

Becau s e we rev ers e i n p art t h e g ran t o f s u m m ary ju d g m en t to t h e d efen d an t s o n t h e

b reach of fi d u ci ary d u t y cl ai m s , we al s o rev ers e t h e g ran t of s um m ary ju d g m en t t o t h e

d efen d an t s o n M i l l er’ s cl ai m fo r ai d in g an d ab et t in g a b reach o f fi du ci ary d u t y

.

30Li k ewi se, we r e v ers e t h e g ran t o f s u m m ary ju d g m en t to t h e d efen d an t s o n M i l l er’ s

cl ai m s fo r p u n i t i v e d am ag es an d at t o rn ey fees

, wh ich t h e t ri al co u rt g ran t ed o n l y o n

t h e b as i s t h at n o n e o f M il l er’ s cl ai m s s urv i v ed s u m m ary ju d g m en t

.

Ho wev er, M i l l er’ s b reach o f co n t ract

, o p pres s io n , an d d ecl arat or y ju d g m en t

cl ai m s are n o t d eri v at iv e o f h i s c l a i m t h at t h e d efen dan t s b reach ed t h ei r d efau l t

fi du ci ary d u t ies b y reject i n g o ffers t o b u y Fi b erLi gh t

, t h e o n l y cl ai m o n wh i ch we

rev ers e t h e t ri al co u rt ’ s g ran t o f s u m m ary ju d g m en t. An d M i l l er m ak es n o arg u m en t

i n su p p o rt of h is en u m erat i o n t h at t h e t ri al co u rt erred i n g ran t i n g su m m ary ju d g m en t

o n th es e c l a i m s

. Th erefo re, w e affi rm t h e g ran t of s u m m ary ju d g m en t o n M i l l er’ s

cl ai m s fo r b reach o f co n t ract , o p p res s i o n , an d d ecl arat o ry ju d gm en t

.

Ju d g men t a ff i rmed i n p a r t an d r ever s ed i n p a r t

. B r an ch a nd Bet h el

, JJ.,

co n cu r

.

3132