Opinion ID: 2320129
Heading Depth: 1
Heading Rank: 4

Heading: The Parkers' interpretation

Text: The Parkers argue that each one of them is a separate member of HEB LLC even though their ownership interest was held as tenants by the entireties at the time of Mr. Bealer's death, and that therefore they could elect to continue HEB LLC pursuant to Section 15(a)(i) of the Operating Agreement. They argue that because the Operating Agreement does not define the term member and because HEB LLC was created pursuant to the laws of the District of Columbia, the statutory definition of member at the time the agreement was entered into should be controlling. At the time, D.C.Code § 29-1301(19) (1981) defined member as a person that owns an interest in a limited liability company, and § 29-1301(20) defined interest as a member's share of the profits and losses of the limited liability company and a member's right to receive distributions of the limited liability company. [4] Combining these definitions, appellants contend that a person who has a right to a share in the profits and losses of the LLC and has a right to receive distributions of the LLC's assets has an interest and therefore is a member. Because as tenants by the entireties, each of them has a right to share in the profits and losses of the jointly owned property, each has an interest and therefore meets the statutory definition of member. We conclude that the Parkers' interpretation of the Operating Agreement, in light of the statutory definitions, is reasonable. Who is a member is not clear from the face of the Operating Agreement. For example, although Ms. Kirchiro is listed as a member, she did not sign the Agreement and the parties agree she was never a member. [5] On the other hand, although Mr. Parker's name does not appear on the signature block of the Operating Agreement, and he did not sign it, his name appears under the designation Members in Exhibit A to the Agreement. The critical provision for purposes of the Parkers' complaint is Paragraph 15(a)(i) of the Operating Agreement, which provides that [HEB LLC] shall not be continued by fewer than two (2) Members. But, although the Agreement repeatedly uses the term Member with a capital Musually signifying a defined termnowhere in the Operating Agreement or in Exhibit A is the term Member defined. [6] Under these circumstances, we think that the Parkers' argument that because HEB LLC was created under the laws of the District of Columbia, and the Operating Agreement states in Paragraph 16 that its provisions are to be governed by, interpreted and enforced in accordance with the laws of the District of Columbia, undefined terms should be given the definition in the D.C. statute extant at the time has some force and is, at a minimum, reasonable. [7] Cf. 2200 M St. LLC v. Mackell, 940 A.2d 143, 153 (D.C.2007) (concluding that because a contract provided that it would adopt the definition of terms in the Condominium Act, it should be interpreted in accordance with that Act). [8] Moreover, as the Parkers argue, tenants by the entireties have the right to share in the profit and losses of the property that is jointly owned. See Morrison v. Potter, 764 A.2d 234, 236-37 (D.C.2000) (noting that property held by tenants by the entireties is unreachable by creditors of one but not of both of the tenants); Finley v. Thomas, 691 A.2d 1163, 1164 (D.C.1997) (holding that because proceeds were from the sale of property held by the husband and wife as tenants by the entireties, a creditor could not collect a debt owed only by the husband from the proceeds); Fairclaw v. Forrest, 76 U.S.App. D.C. 197, 201, 130 F.2d 829, 833 (1942) (explaining that when a husband and wife own property as tenants by the entireties, the husband cannot assert an exclusive right to the rents and profits); Arbesman v. Winer, 298 Md. 282, 468 A.2d 633, 637 (1983) (explaining that when a husband and wife own property as tenants by the entireties, each spouse has an equal right to profits derived from the property). Thus, the Parkers' contention that each is a member of HEB LLC has grounding in D.C. statutory and common law.