Opinion ID: 2511847
Heading Depth: 1
Heading Rank: 8

Heading: Did the district court commit reversible error by adjudicating claims made against the unrepresented limited liability company?

Text: [¶ 31] On January 12, 2007, the Dunmires and the Hedstroms filed a Complaint for Declaratory Judgment. The named defendants were Powell and the Brickmans. The LLC was named as an involuntary plaintiff. In summary, the plaintiffs sought a declaration as to the parties' respective ownership interests in the LLC, and a declaration as to their respective liabilities and obligations to the LLC and to each other. The responsive counterclaim filed by Powell and the Brickmans also sought a declaratory judgment. In addition to asking the district court to declare the parties' respective ownership interests in the LLC, and the parties' respective liabilities and obligations between and among themselves, the counterclaim sought an accounting to determine: (1) the economic and non-economic interests of all the members in the company; (2) the amount of each member's capital account, and total equitable interest in the company; and (3) each member's monetary obligations for debts in the company, and to each other[.] [¶ 32] On October 16, 2008, Powell and the Brickmans filed a motion to bifurcate the proceedings, with one trial determining the parties' ownership interests and one trial determining the parties' liabilities to the LLC and to one another. Dunmires and Hedstroms objected to bifurcation on the ground that the issues were closely interrelated, particularly because the distinction between a capital contribution and a loan implicated both the issue of ownership and the issue of liability. The district court denied the motion, finding that evidence will necessarily overlap and any attempt to bifurcate these issues will result in confusion and duplication. [¶ 33] Although this issue has not been presented as alleged error in failing to bifurcate the trial, we will briefly state the law in that regard. W.R.C.P. 42(b) provides as follows: (b) Separate trials. The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any claim, cross-claim, counterclaim, or third-party claim, or of any separate issue or of any number of claims, cross-claims, counterclaims, third-party claims, or issues. We review a decision not to bifurcate a trial for an abuse of discretion, and reverse only if the district court's decision was outside the bounds of reason under the circumstances. In re Conservatorship & Guardianship of CPR, 2009 WY 76, ¶¶ 9-10, 209 P.3d 879, 883 (Wyo.2009). [W]hen the issues to be tried are not clearly separate and distinct, they do not lend themselves to bifurcation. Carlson v. Carlson, 836 P.2d 297, 305 (Wyo.1992). [¶ 34] Here, we find that the district court did not abuse its discretion in declining the motion to bifurcate because identification of the parties' respective contributions as capital contributions or as loans to the LLC was clearly central to answering the presented questions. Moreover, based upon the evidence presented, the district court appropriately characterized contributions as capital or as loans, but did not, for instance, specifically adjudicate what amount, if any, the LLC owed to the Dunmires for loans made to the LLC. Neither did it specifically adjudicate the exact amount of Powell's addition to capital that remained to be repaid, nor did it determine the actual amounts for a proper allocation of profits and losses. In short, the district court's characterization of the members' contributions as loans or as capital contributions was not an adjudication of claims against the LLC, but was exactly what both parties sought in their pleadings a declaration of their comparative interests in the LLC.