Opinion ID: 2781965
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: [¶3] The LLC is a limited liability company organized under the laws of the State of Wyoming and listing its principal place of business in Laramie County, Wyoming.2 During 2010, Mr. Todosijevic and Mr. Vukov, who are residents of Belgrade, Serbia, each held a 50% membership interest in the LLC.3 The LLC organized several 1 Mr. Todosijevic also sought an order requiring the LLC to provide access to company records, judicially dissolving the LLC, appointing a custodian and receiver pending dissolution and enjoining Mr. Vukov from selling or transferring LLC assets. The district court granted summary judgment for the LLC on these claims. No appeal was taken from the order as to these claims. The one remaining matter left for trial was Mr. Todosijevic’s claim that Mr. Vukov breached the implied covenant of good faith and fair dealing. On Mr. Todosijevic’s motion, the district court dismissed the claim. 2 The district court noted in its decision letter that Montana Food, LLC does not conduct business in Montana or deal in food. The LLC also has no connection with Wyoming other than the fact that it was organized under Wyoming law, it filed its articles of organization with the Wyoming Secretary of State and it has a registered agent in Wyoming. 3 Mr. Todosijevic stated in an affidavit that he organized the LLC in 2007 and owned 100% of the company until 2010 when he transferred a 50% ownership interest to Mr. Vukov. Documentation 1 subsidiaries in Belgrade, including Delbin Investments, MD, LTD (Delbin). The LLC and its subsidiaries invested in buildings located in Belgrade with an eye toward developing them. [¶4] The LLC’s articles of organization provided that the LLC was manager-managed and named Maksim Stajcer, who was not a member of the LLC, as the manager. The articles of organization also provided that after the initial capital contribution of $10,000, “[a]dditional contributions shall be made at such times and in such amounts as may be agreed upon by the Members as provided in the Operating Agreement.” In late 2010, Mr. Vukov became concerned that he was the only member making additional contributions. He retained counsel in Serbia to investigate. The investigation apparently showed that Mr. Vukov had contributed 1,260,600 Euros while Mr. Todosijevic had made no additional contributions. Mr. Vukov issued a notice of meeting indicating that he wished to address the issue of capital contributions by the members as provided in the articles of organization and propose that any member who did not contribute to the LLC’s capital would be subject to a reduction of his ownership interest. Mr. Todosijevic claimed he did not receive the notice. In any event, he did not attend. At the meeting, Mr. Vukov adopted and approved resolutions showing his capital contribution of 1,260,600 Euros, increasing his ownership interest to 99.72% and reducing Mr. Todosijevic’s interest to 0.28%. Thereafter, Mr. Vukov amended the articles of organization by naming himself and his wife as the new managers of the LLC. [¶5] In late 2011, Mr. Todosijevic filed his complaint against the LLC and Mr. Vukov. Of the six causes of action contained in the complaint, this appeal concerns only Mr. Todosijevic’s claim that Mr. Vukov improperly adjusted the members’ ownership interests. The LLC filed a motion for summary judgment claiming there were no genuine issues of material fact as to any of Mr. Todosijevic’s claims, including the claim that Mr. Vukov lacked the authority to adjust the members’ ownership interests. The LLC asserted that after the initial $10,000 contribution the members were to make additional capital contributions. The LLC claimed that although Mr. Todosijevic represented that he was contributing additional funds, in fact only Mr. Vukov was making capital contributions. Upon learning that Mr. Todosijevic had made no contributions beyond the initial capital contribution, the LLC asserted Mr. Vukov properly gave Mr. Todosijevic notice of a meeting and his proposal to adjust the capital account and ownership percentages to reflect the reality of the amounts each member had contributed. When Mr. Todosijevic did not respond, the LLC asserted Mr. Vukov appropriately proceeded to execute a company resolution adjusting the capital account ownership percentages to reflect the members’ actual contributions. The LLC asserted the claims against Mr. Vukov should be dismissed as a matter of law because under applicable Wyoming law, absent an agreement to the contrary, the management and return of profit in an LLC is attached to Mr. Vukov’s affidavit indicates he was a 50% owner on the date the LLC was organized. In any event, there is no dispute that by 2010 each party owned 50% of the LLC. 2 determined by the members’ respective capital contributions. The LLC contended that once it was established that Mr. Vukov had made additional contributions and Mr. Todosijevic had not, Mr. Vukov was justified as a matter of law in taking action to adjust the members’ capital accounts. [¶6] Mr. Todosijevic asserted the LLC was not entitled to summary judgment because Mr. Vukov was without authority to unilaterally dilute Mr. Todosijevic’s ownership interest. He asserted that the consent of all members was required to change the members’ ownership interests. He contended he was entitled to judgment as a matter of law on that issue. [¶7] The district court found as a matter of law that Mr. Vukov, as an individual member, did not have contractual or statutory authority to adjust member ownership interests. In reaching that result, the district court looked first to the LLC’s articles of organization and operating agreement. Finding that neither of those documents addressed the question of whether a member had the authority to adjust ownership interests, the district court turned to the Wyoming Limited Liability Company Act, Wyo. Stat. Ann. §§ 17-29-101 through 1105 LexisNexis 2011). It focused on § 17-29-407(c), which addresses management of LLCs and provides in relevant part: (c) In a manager-managed limited liability company, unless the articles of organization or the operating agreement provide otherwise, the following rules apply: (i) Except as otherwise expressly provided in this chapter, any matter relating to the activities of the company is decided exclusively by the managers; (ii) Each manager has equal rights in the management and conduct of the activities of the company; (iii) A difference arising among managers as to a matter in the ordinary course of the activities of the company may be decided by a majority of the managers; (iv) The consent of all members is required to: (A) Sell, lease, exchange or otherwise dispose of all, or substantially all, of the company's property, with or without the good will, outside the ordinary course of the company's activities; (B) Approve a merger, conversion, continuance, transfer or domestication under article 10 of this chapter; (C) Undertake any other act outside the ordinary course of the company's activities; and (D) Amend the operating agreement. (Emphasis added.) 3 [¶8] Finding that the articles of organization and the operating agreement clearly provided that the LLC is manager-managed, the district court concluded this subsection applied. Because the underlined language makes it clear that consent of all members is required to undertake any act outside the ordinary course of the LLC’s activities, the district court concluded as a matter of law that Mr. Vukov did not have the statutory authority to change member ownership interests without the consent of Mr. Todosijevic. Implicit in the district court’s holding is the finding that changing member ownership interests is an act outside the ordinary course of the LLC’s activities. On this basis, the district court denied the LLC’s motion for summary judgment on the issue of Mr. Vukov’s authority to adjust ownership interests and granted Mr. Todosijevic’s motion on that issue. [¶9] The district court also concluded genuine issues of material fact existed on the claim against Mr. Vukov for breach of the implied covenant of good faith and fair dealing, and denied the LLC’s motion as to that claim. Thereafter, Mr. Todosijevic filed a motion to dismiss the claim on the ground that it was not fiscally practicable to pursue it to trial. The district court granted the motion and dismissed the claim. The LLC appealed asserting that the district court’s conclusion on summary judgment that Mr. Vukov had no authority to adjust the membership interests was incorrect.