Opinion ID: 2538990
Heading Depth: 1
Heading Rank: 6

Heading: the court of appeals properly considered the role of the judge and jury

Text: ¶ 24 Burningham argues that despite the court's decision to delay an adjudication of dissolution, the ownership of the members' interests had to be determined according to an accounting of the parties' capital accounts as provided for in the LLC Act before Wilson could be awarded damages. [5] The court of appeals agreed that damages were dependent on Wilson's percentage of ownership, but concluded the jury had determined the ownership percentages. OLP, LLC v. Burningham, 2008 UT App 173, ¶¶ 20-21, 185 P.3d 1138. We agree. ¶ 25 The jury found that Burningham and Wilson had entered a contract to form and operate OLP as equal members. [6] Burningham argues that this determination was insufficient because the parties made disproportionate contributions and therefore a revaluation of the capital accounts was necessary to determine each party's membership percentage. This argument ignores the consequences of a repudiation. By abandoning the limited liability contract, as the jury found, Burningham also abandoned his ability to seek resolution of the dispute according to the company's governing documents or the default provisions supplied by the LLC Act. At the point of repudiation, there were no longer any limited liability company terms to enforce, and Wilson's damages were determined as of the time of contract formation. For the same reason, Burningham's argument that dissolution procedures and a winding up were necessary also does not carry the day. With a finding of repudiation there was no limited liability company to dissolve or wind up. ¶ 26 Burningham argues that even if the jury did determine membership interests, the district court erred by submitting the issue to the jury in the first place. He suggests that the court should have performed an equitable accounting before submitting any legal claims to the jury. First, as discussed in Part I, we have declined to incorporate the rule that an accounting must be performed before a party may pursue legal claims. Second, Burningham seeks an accounting to determine Burningham and Wilson's membership interests. The court of appeals correctly held this was a factual issue belonging to the jury, and when legal and equitable issues turn on the same operative facts, a jury must decide the legal issue first[, and] the jury's factual determination binds the trial court in its determination of the parallel equitable issue. Zions First Nat'l Bank v. Rocky Mountain Irrigation, Inc., 795 P.2d 658, 662 (Utah 1990). Therefore, following the jury's determination that the members had fifty-fifty ownership of the company, there was no need for the court to perform a separate accounting. The jury's factual determination was binding. Similarly, the facts underlying Burningham's equitable defenses were determined by the jury or not applicable after the jury found there was a repudiation.