Court Opinion

ID: 2716832
Source: CourtListenerOpinion
Date Created: 2014-08-08 19:45:28.092546+00
Date Added: 2024-06-11T09:54:56.238750
License: Public Domain

REL:06/27/2014

Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.

          SUPREME COURT OF ALABAMA
                           OCTOBER TERM, 2013-2014

                         _________________________

                                  1110423
                         _________________________

     Martin K. Berks; Environmental Attorneys Group, LLC,
            and Environmental Attorneys Group, P.C.

                                          v.

                          Gregory A. Cade et al.

                  Appeal from Jefferson Circuit Court
                             (CV-08-903634)

                       On Application for Rehearing

PER CURIAM.

      APPLICATION OVERRULED. NO OPINION.

      Stuart, Bolin, Parker, Murdock, Main, Wise, and Bryan,

JJ., concur.

      Shaw, J., concurs specially.

      Moore, C.J., dissents.
1110423

SHAW, Justice (concurring specially).

    I concur in overruling the application for rehearing.

    The present appeal arises from the most recent case in a

series    of   actions      stemming      from        the     dissolution     of

Environmental Attorneys Group, LLC, a law firm ("EAG, LLC"),

and the competing claims of the various parties, who are

former partners in and/or employees of EAG, LLC, to certain

fees.    The defendants/counterclaim plaintiffs below -- Martin

K. Berks, EAG, LLC, and Environmental Attorneys Group, P.C.

("EAG,    P.C.")     --   appeal   from    the        trial    court's     order

dismissing, with prejudice, their counterclaim and third-party

complaint.

    On original submission, this Court affirmed the trial

court's judgment, without an opinion.                  Berks v. Cade, [No.

1110423, October 18, 2013] ___ So. 3d ___ (Ala. 2013).                        On

rehearing,     the    appellants    object       to    both     this     Court's

affirmance and its decision not to issue an opinion.                     I write

specially to explain why I concur with both decisions.

                     Facts and Procedural History

    In 1989, J. William Lewis formed Environmental Litigation

Group, P.C. ("ELG, P.C."), a law firm specializing in toxic-

                                    2
1110423

tort       representation. 1      Berks       and    Mark    Rowe       were    both

subsequently employed by ELG, P.C., as attorneys, and Cade was

employed, beginning in 1993, as a paralegal/investigator.

       In 2001, Berks and Rowe formed EAG, LLC.                  Pursuant to the

articles      of   incorporation,        Berks      and   Rowe   were    the    sole

members      of    EAG,   LLC,    and    each     retained   a    50%    ownership

interest.         At some point thereafter, Cade was hired by EAG,

LLC, as a paralegal.             Cade subsequently obtained his juris

doctorate      and   passed      the    Alabama     bar   examination     and    was

employed by EAG, LLC, as an associate attorney.

       In 2004, Cade planned to separate from EAG, LLC, and EAG,

LLC, 2 sued Cade in the Jefferson Circuit Court (CV-04-0752)

seeking injunctive relief against Cade, who, it alleged, was

attempting to "steal cases from EAG, [LLC,] ... by signing

[engagement] contracts in his own name instead of the EAG[,

       1
     ELG,   P.C.,  at  the  time   of  its  formation,   was
incorporated under the name "J. William Lewis Professional
Corporation." Thereafter, it underwent several name changes,
including "Asbestos Litigation Group, P.C." in 1990 and
finally ELG, P.C., in 1991.
       2
     Although the action was purportedly initiated on behalf
of EAG, LLC, Rowe's affidavit testimony reflects that Berks
solely undertook that litigation and that "[Rowe] did not
approve or grant authority for Berks to file a complaint on
behalf of [EAG, LLC,] or to enter into a mediation agreement
between [EAG, LLC,] and Cade.

                                          3
1110423

LLC,] name."     Following court-ordered mediation, the parties

ultimately     resolved   their   dispute.   The   terms   of   the

negotiated settlement agreement provided, in pertinent part:

    "[Cade] shall be entitled to 50% of the fees from
    the creosote related personal injuries and property
    damage claims in the cases from Hattiesburg, MS, and
    Florala, AL. [EAG, LLC,] shall be entitled to 50% of
    such fees as well as fees from all other claims from
    such cases, with each principal of [EAG, LLC,]
    entitled to half. Wilbur Colom's law firm shall be
    associated in the Florala creosote cases on the same
    basis as the Hattiesburg cases. [Cade] shall request
    Colom's firm to disburse any monies due to be
    disbursed or paid to [EAG, LLC,] or [Cade] in
    accordance with this agreement.

    "[Cade] shall take and be responsible for handling
    to a conclusion the Hattiesburg and Florala cases
    and the following cases (to the exclusion of all
    other cases or matters coming out of [EAG, LLC's]
    data bases):

    "1. Michael Walker

    "2. Wells vs. Georgia Pacific

    "3. Kelly vs. Georgia Pacific

    "4. Abraham Gandy

    "5. Bubbet[t]

    "6. Garrison

    "7. Orbie Cantrell

    "8. Earl Ridley

                                  4
1110423

      "[Cade] shall reimburse [EAG, LLC,] for all out of
      pocket expenses incurred in the above named cases
      one through eight within 30 days. [Cade] shall be
      entitled to all fees from cases one through eight
      except cases 4 and 5. [Cade] shall pay an amount
      equal to one-third of the net fees collected from
      cases 4 and 5 to [EAG, LLC,] when, as and if
      collected. [EAG, LLC,] shall continue to handle all
      cases and matters for clients identified in [EAG,
      LLC's] records or data bases except the Florala, and
      Hattiesburg cases and cases one through eight above.

      "[EAG, LLC,] agrees to cause the above styled
      lawsuit to be dismissed with prejudice and to have
      the court either strike the pleadings and other
      papers filed from the record or to have the case
      sealed.

      "[Cade] shall be given possession of the files for
      the Hattiesburg and Florala cases as well as cases
      one through eight above. [Cade] shall cause a copy
      of the contracts for the Hattiesburg cases to be
      delivered to [EAG, LLC,] within 30 days. [EAG, LLC,]
      and [Cade] shall provide each to the other a copy of
      any contract in the Hattiesburg and Florala cases
      received on or after the date of this agreement
      within a week after receipt. [Cade] shall provide
      [EAG, LLC,] with an updated client list for the
      Hattiesburg and Florala cases once each month."

The   case   was   thereafter   dismissed   with   prejudice   and   the

record sealed.

      Also in 2004, Berks communicated to the existing clients

of EAG, LLC, his intention to leave EAG, LLC, and to form EAG,

P.C., a new law firm formed solely by Berks.           In conjunction

with that plan, Berks requested that clients of EAG, LLC, sign

                                   5
1110423

new engagement contracts with EAG, P.C.                   Ultimately, Rowe

separately formed The Rowe Law Firm, LLC, on April 2, 2004;

Cade formed The Cade Law Firm, LLC, on that same date; and

Berks   formed   EAG,   P.C.,   on       April   5,     2004.     EAG,   LLC,

effectively ceased operation in February 2004, but the firm

was not then dissolved. 3

    On March 1, 2005, Cade replaced Lewis as a shareholder,

director,   officer,    and   employee     of    ELG,    P.C. 4   When   Cade

joined ELG, P.C., it and Cade jointly continued to represent

Cade's existing clients, including those referenced in the

2004 settlement agreement.

    In February 2006, Rowe sued Berks and Berks's law firm,

EAG, P.C., in the Jefferson Circuit Court (CV-06-749).               Rowe's

claims were resolved via mediation in July 2006, and that

action was subsequently dismissed.           As part of their mediated

    3
     Although Berks had communicated to Cade and to Rowe in
February 2004 his intention to dissolve EAG, LLC, at that
time, the record reflects that he later decided not to
dissolve the LLC because "[he] figured it would be less
complicated ... once they collected money on Florala and
Hattiesburg...."
    4
     Cade's deposition testimony reflects that he is now the
sole remaining principal of ELG, P.C.    Cade also indicated
that, at the time of his deposition in the underlying matter,
the Cade Law Firm continues to exist as an undissolved
limited-liability company.

                                     6
1110423

settlement, Rowe and Berks agreed "to the dissolution of EAG,

LLC pursuant to the applicable provisions of the Operating

Agreement." 5

     5
     With regard to dissolution, the EAG,          LLC,     operating
agreement provides, in full, as follows:

          "Article 10 -- DISSOLUTION AND LIQUIDATION OF
     THE COMPANY

          "10.1 Dissolution. The          Company shall be
     dissolved upon the earliest          to occur of the
     following:

               "(a)  The written consent of Members
          holding one or more Voting Interests which
          taken together equal or exceed two-thirds
          (2/3) of all Voting Interests to dissolve
          the Company.

               "(b) When     there   is    no   remaining
          Member, unless    either   of   the   following
          applies:

                     "(i) the holders of all the
                Economic Rights in the Company
                agree in writing, within ninety
                (90) days after cessation of
                membership of the last Member, to
                continue the legal existence and
                business of the Company and to
                appoint one or more new members;
                or

                     "(ii) the legal existence
                and business of the Company is
                continued and one or more new
                members are appointed in the
                manner stated in the Articles of
                Organization or this Agreement.

                                7
1110423

               "(c) The merger of the Company with
          one or more other entities and the Company
          is not the successor limited liability
          company   in    such   merger,    or   the
          consolidation of the Company with one or
          more other entities.

               "(d) The entry of a decree of judicial
          dissolution by the circuit court of the
          county    in   which   the    Articles   of
          Organization were filed.

         "10.2 Winding Up Upon Dissolution.    After the
    dissolution of the Company, the Members (or such
    other Persons as the Act [the Alabama Limited
    Liability Company Act, Ala. Code 1975, § 10-12-1 et
    seq., repealed by Act No. 2009-513, Ala. Acts 2009,
    effective January 1, 2011] may require or permit)
    shall wind up the affairs of the Company and shall
    file Articles of Dissolution with the office of the
    Judge of Probate of the county where the Articles of
    Organization were filed, and take such other actions
    as may be necessary or appropriate to terminate the
    Company.   The Members or other Persons winding up
    the Company's business may: (a) preserve the
    Company's business or property as a going concern
    for a reasonable time; (b) prosecute and defend
    actions and proceedings, whether civil, criminal or
    administrative; (c) settle and close the Company's
    business; (d) dispose of and transfer property; (e)
    discharge the Company's liabilities; (f) distribute
    the assets of the Company; and (g) perform other
    necessary and appropriate acts.

         "10.3 Distribution and Dissolution. Upon the
    winding up of the Company, the Company's assets
    shall be distributed in the following order of
    priority:

               "(a) To creditors, including   Equity
          Owners who are creditors to the     extent

                               8
1110423

    Although Berks and EAG, P.C., subsequently sought to have

the 2006 negotiated settlement set aside, the trial court

denied    that   request   and   Berks's   subsequent   appeal   was

apparently dismissed without opinion.        In August 2007, Rowe

accepted employment with ELG, P.C. –- where Cade worked –- as

an associate attorney.

    In October 2008, one of the matters referenced in the

2004 settlement agreement, M.C. v Pactiv et al. (identified as

the "Florala cases" in the 2004 settlement agreement set out

above), settled.     Upon learning of the settlement, counsel,

purportedly acting on behalf of Berks and EAG, LLC, notified

           permitted by law, in order of priority;

                "(b) To present and former Equity
           Owners for interim distributions; and

                "(c)  To Equity Owners in accordance
           with the positive Capital Account balances
           of the Equity Owners, as determined after
           taking into account all Capital Account
           adjustments for the Company's taxable year
           during which the liquidation occurs.

    "The Company may offset damages for breach of this
    Agreement by an Equity Owner whose interest is
    liquidated (either upon the withdrawal of the Member
    or the liquidation of the Company) against the
    amount otherwise distributable to such Equity
    Owner."

                                  9
1110423

counsel   of    record   in   the   Florala      cases   by   letter       that,

purportedly pursuant to the settlement agreement, Berks and

EAG, LLC, 6

     "assert[ed] a lien against any and all fees and
     expenses to be paid from the settlement proceeds to
     Gregory Cade, Robert Palmer, Fred DeLeon, Mark Rowe,
     Lee Gresham, Hoyt Harp and [ELG, P.C.,], its agents
     and/or representatives, attorneys, and members."

At or around that same time, EAG, LLC, filed a "Motion to

Enforce Settlement Agreement" in case no. CV-04-0752, which

motion    was   originally    granted      but   later   vacated.           Cade

received the settlement proceeds from the Florala cases on or

around November 14, 2008.

     In   November   2008,     Cade    and   his    employer,       ELG,    P.C.

(hereinafter     sometimes     collectively        referred    to    as     "the

plaintiffs"), sued Berks; EAG, LLC; and Berks's firm, EAG,

P.C. (hereinafter sometimes collectively referred to as "the

defendants"); and various fictitiously named defendants in the

Jefferson Circuit Court. Specifically, the verified complaint

included the following counts:

     6
     The letter fails to include a designation indicating
whether the purported representation included EAG, LLC, or
EAG, P.C. I presume, however, given the subsequent procedural
history, that the letter was meant to refer to the claim of
EAG, LLC.

                                      10
1110423

          Count I      Injunctive Relief

          Count II     Breach of Contract

          Count III    Tortious Interference

          Count IV     Conspiracy to    Tortiously Interfere
                       with Contracts

          Count V      Fraudulent     Inducement Regarding
                       Settlement Agreement

          Count VI     Conversion of Attorney Fees (Gandy and
                       Bubbett cases)

          Count VII    Declaratory Judgment 7

          Count VIII   Accounting

    The defendants subsequently answered and counterclaimed,

alleging that they had complied in all respects with the terms

of the 2004 settlement agreement but that Cade had repeatedly

    7
     In particular, the plaintiffs sought a judgment from the
trial court declaring that, as a result of the alleged
wrongful conduct of Berks and EAG, LLC, Cade and ELG, P.C.,
were not obligated to remit the fees otherwise due under the
2004 settlement agreement.

                              11
1110423

breached that agreement. 8   Their counterclaim included the

following counts:

              Count I        Breach of Contract

              Count II       Tortious     Interference with
                             Contract

              Count III      Unjust Enrichment

    8
     More specifically, the counterclaim alleged that Cade's
conduct in breach of the 2004 settlement agreement was as
follows

    "(a) he has not reimbursed Defendants for all out of
    pocket expenses incurred in the cases he was being
    allowed to handle; (b) he has not paid to [EAG,] LLC
    an amount 'equal to one-third of the net fees
    collected' in the Gandy case; (c) he has not
    reimbursed any of the expenses in the Bubbett case
    nor did he take over primary responsibility for the
    Bubbett case (No. 5) or do any work on behalf of Mr.
    Bubbett subsequent to the Settlement Agreement; (d)
    he has not provided copies of any contracts in the
    Hattiesburg or Florala cases received on or after
    the date of the Settlement Agreement; (e) he has
    never provided an updated client list for the
    Hattiesburg or Florala cases, much less provided one
    each month; (f) he has concealed settlements in the
    Hattiesburg group of cases from Defendants; (g) he
    has not paid "50% of such fees as well as fees from
    all other claims" from the Hattiesburg cases to
    [EAG,] LLC (either directly or through the Colom
    firm) (h) he has not paid "50% of such fees as well
    as fees from all other claims" from the Florala
    cases to [EAG,] LLC (either directly or through the
    Colom firm) (i) he failed to direct Colom's firm to
    disburse any monies due to be disbursed or paid to
    [EAG,] LLC in accordance with the Settlement
    Agreement."

                              12
1110423

                  Count IV     Accounting

                  Count V 9    Fraudulent Suppression

     Rowe subsequently moved, pursuant to Rule 24(a), Ala. R.

Civ. P., to intervene in the underlying case.      In support of

his request, Rowe alleged both "[t]hat the entity known as

[EAG, LLC], is still an active limited liability corporation

and has not been closed" and that Rowe "ha[d] a property

interest in any claims made for attorney fees on behalf of

[EAG, LLC]." 10   Upon an emergency motion by the defendants, the

trial court ordered that the plaintiffs pay the clerk of the

trial court the $2,399,125 fee received by them in conjunction

with the resolution of the Florala cases.        That same order

granted, per the parties' stipulation in open court, Rowe's

motion to intervene and his alignment as a plaintiff.        The

trial court, however, subsequently granted the plaintiffs'

"Motion to Reconsider" and rescinded the portion of the order

requiring the plaintiffs to pay the designated amount to the

clerk.

     9
         Count V was added later by amendment.
     10
      Rowe's intervention motion appears inconsistent in that
it purports to express his individual property interest in any
attorney-fee claim made by EAG, LLC, but requests that Rowe be
allowed to intervene "on behalf of [EAG, LLC]."

                                13
1110423

    In March 2009, Rowe demanded, pursuant to the terms of

the 2006 mediated settlement agreement, that Berks take steps

to formally dissolve EAG, LLC.    Also in 2009, Berks and EAG,

LLC, filed a third-party complaint against Lewis, the founder

of ELG, P.C. –- the firm Cade worked for -- and against Robert

L. Palmer, then a member and the president of ELG, P.C.     That

pleading alleged that Palmer and Lewis had "intentionally and

maliciously interfered with Cade's performance of the terms of

the [2004] Settlement Agreement...."

    Lewis and Palmer later moved to dismiss the third-party

complaint on, among others, the following grounds:

         "11. EAG, LLC, is the only possible proper party
    to the third party complaint. However, EAG, LLC,
    ceased to operate or to have any employees in
    February 2004, leaving as its only activity that of
    winding down. Part of winding down was EAG, LLC's
    performance of the terms of the [2004] Settlement
    Agreement by which it was to turn over possession of
    the files and client contracts for specified cases
    to Cade so he could handle the cases to their
    conclusion. According to Rowe, Cade and Amy [Pyle]
    Berks, EAG, LLC, did not deliver possession of the
    files and client contracts to Cade. ... Berks
    testified at deposition that he had no evidence that
    EAG, LLC, delivered possession of the files to Cade.
    ...

         "12. EAG, LLC, could have been a proper party to
    bring the third party complaint but it was not
    authorized to do so. Berks had no authority as a
    less-than-majority owner of EAG, LLC, to cause EAG,

                             14
1110423

       LLC, to file the third party complaint. EAG, LLC's
       Operating Agreement states that all 'decisions
       concerning the business and affairs of the Company
       shall be made, unless otherwise provided by Section
       6.2, by members holding a majority interest.' ...
       The Operating Agreement defines a majority interest
       as 'one or more Voting Interests which taken
       together exceed fifty percent (50%) of the aggregate
       of all Voting Interests.' ... Consequently, Rowe
       and Berks, neither having a majority interest, would
       have had to both vote to file the third party
       complaint as an act of EAG, LLC, for the decision to
       be valid.

            "13. Rowe did not authorize EAG, LLC, to file
       the third party complaint. Berks admits that Rowe
       is [a] member of EAG, LLC, and the members did not
       vote to file the counterclaim. ..."

(Footnotes omitted.) Lewis and Palmer supported the foregoing

claims with numerous evidentiary submissions.

       ELG, P.C., moved for a summary judgment in its favor

declaring that the 2004 settlement agreement was unenforceable

as a result of the alleged breach of that agreement by EAG,

LLC,    specifically     Berks,    in    failing    to   surrender    files

identified in the agreement and in keeping all fees received

in   the   Gandy   and   Bubbett    cases    also    identified      in   the

agreement.    In that same motion, ELG, P.C., argued that any

counterclaim asserted by Berks, individually,              was due to be

dismissed based on his alleged lack of standing to pursue any

such claim. More specifically, ELG, P.C., alleged that Berks

                                    15
1110423

"is a member of EAG, LLC, and is not seeking to enforce his

rights as a member or manager against or liability to EAG,

LLC," and that Berks was not a party to the 2004 settlement

agreement, on which the claims were based; thus, ELG, P.C.,

argued that "EAG, LLC, is the only possible proper party to

the counterclaim." It further argued:

         "EAG, LLC, would have been a proper party to
    bring the counterclaim but it was not authorized to
    do so. EAG, LLC's Operating Agreement states that
    all 'decisions concerning the business and affairs
    of the Company shall be made, unless otherwise
    provided by Section 6.2, by members holding a
    majority interest.' The Operating Agreement defines
    a majority interest as 'one or more Voting Interests
    which taken together exceed fifty percent (50%) of
    the    aggregate   of    all   Voting    Interests.'
    Consequently, Rowe and Berks, neither having a
    majority interest, would have had to both vote to
    have EAG, LLC, file the counterclaim for the filing
    to be valid, Berks alone had no authority to cause
    EAG, LLC, to file the counterclaims.

         "Berks admitted that Rowe is [a] member of EAG,
    LLC, and the members did not vote to file the
    counterclaim. The counterclaim is due to be
    dismissed because EAG, LLC's members did not
    properly authorize the filing on the limited
    liability company's behalf."

(Emphasis original.)

    Rowe   also   subsequently     moved   to   dismiss      any   claims

purportedly   made   on   behalf    of   EAG,   LLC,   and   by    Berks,

individually, on virtually identical grounds.          In addition to

                                   16
1110423

Berks's purported lack of authority to act on behalf of EAG,

LLC, and Berks's purported lack of any individual interest

making him a "proper party," Rowe further alleged that, as the

other 50% interest holder in EAG, LLC, Rowe had not agreed to

hiring counsel or filing litigation on behalf of EAG, LLC.

Rowe's motion was supported by, among other exhibits, his

sworn statement to the foregoing effect and by a copy of the

sealed 2006 settlement agreement reached in case no. CV-06-

749, which purportedly reflected that at no time had Rowe ever

surrendered his equity interest in EAG, LLC.

       On   February    24,   2010,   Rowe    filed   formal   articles   of

dissolution for EAG, LLC, with the Jefferson Probate Court.

That    document   reflected      that       the   dissolution   had   been

authorized by the vote and written consent of all members on

July 19, 2006.         Immediately thereafter, Rowe filed a motion

seeking, in the underlying action, to disqualify counsel of

record for EAG, LLC, on the ground that their hiring violated

the terms of the EAG, LLC, operating agreement in that the

members of EAG, LLC, had not voted to pursue any action on its

behalf and that, in the absence of such approval, Berks was

not authorized to bind EAG, LLC.                   Rowe's motion included

                                      17
1110423

numerous supporting exhibits.          ELG, P.C., Palmer, and Lewis

subsequently filed a motion joining Rowe's motion seeking to

disqualify counsel for EAG, LLC.           Cade, too, later joined

Rowe's motion.

      The   plaintiffs    subsequently    filed   their   own   motion

seeking, in part, to dismiss the counterclaim and third-party

complaint based on the trial court's alleged lack of subject-

matter jurisdiction.      Specifically, relying primarily on the

assertions set out above, they contended that "[EAG, P.C.],

and ... Berks ... do not have the capacity or authority to

assert the claims they have made and that [the trial court],

therefore, [did] not have subject matter jurisdiction over the

claims."

      In response to Rowe's motion to disqualify counsel, Berks

alleged that Rowe's own "unclean hands," resulting from Rowe's

alleged breach of fiduciary duty owed to EAG, LLC, prevented

Rowe from participating in the underlying litigation and/or

obtaining relief from the court.          Berks also requested that

the   trial    court     vacate   the    order    permitting    Rowe's

intervention and expunge the formal dissolution Rowe filed in

the Jefferson Probate Court, which requests Rowe opposed.

                                  18
1110423

       Thereafter,    the   plaintiffs     renewed    their   request    to

dismiss the counterclaim and third-party complaint based on

the trial court's alleged lack of subject-matter jurisdiction

based on Berks's lack of standing to file those pleadings. In

response,     the   defendants    renewed     their   prior   request    --

allegedly based upon fears stemming from the anticipated

dissolution of ELG, P.C. -- that the trial court require the

plaintiffs to escrow the $1,199,562.50 in disputed fees from

the Florala cases. The plaintiffs opposed that motion, noting

that the funds at issue had been disbursed in the ordinary

course of the business of ELG, P.C., and that, as the trial

court had previously determined, the claim at issue was not a

claim to specific funds but a potential claim for damages.

They further disputed the possibility that ELG, P.C., would be

dissolved before the underlying claims were resolved.                   The

trial court subsequently denied the motion to escrow the

funds.    It also entered, after a hearing, an order finding

that neither Rowe nor Berks had voted for or authorized the

hiring of counsel and holding that "[t]he Operating Agreement

does    not   allow   members    to   cease   their   membership   by     a

voluntary act and specifies that membership terminates only

                                      19
1110423

upon the occurrence of an event described in the Alabama

Limited Liability Company Act."   As a result, the trial court

made the following "Conclusions of Law":

         "EAG, LLC's Operating Agreement states that the
    company is dissolved upon [t]he written consent of
    Members holding one or more Voting Interests which,
    taken together equal or exceed two-thirds (2/3) of
    all Voting Interests. ... Berks and Rowe, the sole
    members of EAG, LLC, who together held one hundred
    percent (100%) of the Voting Interests, gave their
    written consent to dissolution on July 19, 2006,
    when they signed the Settlement Agreement.       The
    Alabama Limited Liability Company Act provides that
    a limited liability company is dissolved upon the
    occurrence of the first event specified in the
    company's articles of organization, its operating
    agreement or the Act to result in dissolution. See
    Ala. Code [1975, §] 10-12-37....

         "At the moment the written consent specified by
    the Operating Agreement was given by all of its
    members, EAG, LLC, was dissolved pursuant to Alabama
    Code [1975, §] 10-12-37, which states that '[a]
    limited liability company is dissolved ... upon the
    occurrence of the first of the following events: (1)
    Events specified in the articles of organization or
    the operating agreement....' Once the dissolution
    occurs, the limited liability company is to
    immediately begin to wind up its business and may
    not carry on any business except that necessary and
    appropriate to wind up and liquidate its business
    and affairs. ... Ala. Code [1975, §] 10-12-40....
    While winding up the business and affairs of a
    limited liability company may be a process,
    dissolution is not.

         "After the dissolution occurs pursuant to
    Alabama Code [1975, §] 10-12-37, it is mandatory
    that the company file articles of dissolution with

                             20
1110423

    the judge of probate for the county in which the
    company's articles of organization were filed. See
    Ala. Code [1975, §] 10-12-42.... The language of
    the statute makes it clear, however, that filing the
    articles of dissolution has nothing to do with
    causing   or   completing   the   dissolution.   The
    dissolution has already occurred by the time the
    articles of dissolution are filed and the articles
    are filed to give third parties notice that
    dissolution has occurred. The commentary to Alabama
    Code [1975, §] 10-12-42, explains the purpose of
    filing the articles of dissolution as follows:

          "'It provides for filing of the articles of
          dissolution upon the commencement of
          winding up.    The filing is intended to
          serve as notice to third parties that the
          limited liability company is being wound up
          and as a means of limiting the liability of
          members for subsequent actions of the
          limited liability company other than
          actions necessary for the winding up.'

    "Ala. Code [1975, §] 10-12-42 ... (Commentary)
    (emphasis added). The date of the limited liability
    company's dissolution also triggers a limitation on
    its ability to commence an action or proceeding
    against third parties and provides protection from
    claims against the company.     The period of time
    within which a dissolved limited liability company
    is to wind up its business and affairs is two years
    from the date of dissolution. See Nix v. W.R. Grace
    & Co. CONN., 830 F. Supp. 601, 602 (S.D. Ala. 1993);
    Hutson v. Fulgham Industries, Inc., 869 F.2d 1457,
    1460 (11th Cir. 1989); Ala. Code [1975, §§]
    10-12-45, 10-4-381, 10-2B-14.06, 10-2B-14.07 (and
    the   Commentary   thereto),   10-12-39,   10-12-40,
    10-12-43, and 10-12-44.

         "The limitation on the amount of time a
    dissolved limited liability company has to wind up
    is based on a legislative policy that there must be

                              21
1110423

    a definite point in time when claims by and against
    dissolved business entities must cease. Nix v. W.R.
    Grace & Co. CONN, 830 F. Supp. [601] at 604 [(S.D.
    Ala. 1993)]. Absent a survival statute, common law
    would cause a dissolved entity's ability to bring
    and defend claims to end immediately upon the
    dissolution date. Id. A claim not brought within
    the time period is extinguished. Id. Claims of the
    limited liability company assigned to a member by a
    general assignment are also extinguished if not
    brought within the wind-up period.     Id. at 605.
    Members of a dissolved limited liability company do
    not succeed to any unassigned assets after the
    wind-up period except fixed corporate assets and
    real property... Hutson v. Fulgham [Indus., Inc.],
    869 F.2d [1457] at 1464 [(11th Cir. 1989)].

         "The decisions in Hutson and Nix were based on
    Alabama Code [1975, §] 10-2A-203, which provided
    that:

          "'The dissolution of a corporation ...
          shall not take away or impair any remedy
          available to or against such corporation,
          its directors, officers or shareholders,
          for any right or claim existing, or any
          liability    incurred,   prior    to   such
          dissolution if action or other proceeding
          thereon is commenced within two years after
          the date of dissolution.'

    "Id. Although Alabama Code [1975, §] 10-2A-203, has
    been repealed, it was replaced by Alabama Code
    [1975,   §§]   10-28-14.06  and   10-2B-14.07.   The
    Commentary to Alabama Code [1975, §] 10-2B-14.07,
    states that ...[t]he provision of the former Alabama
    Act most nearly corresponding to section 10-2B-14.07
    is section 10-2A-203, providing for the survival of
    remedies against a dissolved corporation for a
    period of two years. Section 10-2B-14.07 of this
    Act continues the two year time limitation of prior

                              22
1110423

    law. ... Ala.    Code   [1975,   §]   10-2B-14.07   ...
    (Commentary).

         "Alabama Code [1975, §] 10-12-45(f), states that
    a limited liability company formed to provide
    professional services is subject to the provisions
    of the Revised Alabama Professional Corporation Act
    which subjects professional corporations to the
    provisions of the Alabama Business Corporation Act
    of which Alabama Code [1975, §§] 10-2B-14-06 and
    10-12-14.07, are a part.      Further, Alabama Code
    [1975, §§] 10-12-43 and 10-12-44, are virtually the
    same, word-for-word, as Alabama Code [1975, §§]
    10-2B-14.06 and 12-2B-14.07, which apply to limited
    liability companies.

         "The Court also has considered Alabama Code
    [1975, §] 10-12-40, of the Limited Liability Company
    Act, entitled Survival of Remedy After Dissolution,
    which provides that a dissolved limited liability
    company continues its existence but cannot engage in
    any business other than that necessary to wind up
    its business. Specifically, dissolution does not
    terminate or suspend a proceeding pending by or
    against the limited liability company on the
    effective date of dissolution. Ala. Code [1975, §]
    10-12-40(b)(2)....    The   implication    is    that
    dissolution does terminate the dissolved limited
    liability company's ability to initiate new,
    non-pending    proceedings.    The    law     clearly
    contemplates that a limited liability company must
    complete the winding up of its business within, at
    most, two years from the date on which the event
    resulting in its dissolution occurred.

         "There is no dispute that more than two-thirds
    of the holders of Voting Interests in EAG, LLC,
    entered into a written consent to dissolve on July
    19, 2006.    According to the company's operating
    agreement and Alabama Code [1975, §] 10-12-37, such
    a written consent resulted in the immediate
    dissolution of EAG, LLC, and the beginning of the

                             23
1110423

    winding-up period.    Consequently, EAG, LLC, was
    barred from conducting any new business or asserting
    claims against others after July 19, 2008, two years
    following its dissolution date. The hiring of a
    lawyer and asserting claims against the plaintiffs
    and third-party defendants herein in the name of
    EAG, LLC, after July 19, 2008, was barred by the
    Alabama survival of remedy statutes and caselaw. The
    attorneys purporting to represent EAG, LLC, are due
    to be disqualified.

         "The defendants have argued that Rowe ceased to
    practice law with EAG, LLC, in February or March
    2004, that he breached his fiduciary duties by
    competing against EAG, LLC, with Cade, and that he,
    as a consequence, ceased to be a member of EAG, LLC,
    before he signed the Settlement Agreement on July
    19, 2006, consenting to the dissolution of EAG, LLC.
    The evidence is otherwise.

         "Any member of EAG, LLC, was permitted under the
    Operating Agreement to compete with EAG, LLC. Berks
    clearly engaged in competition with the company when
    he sent letters to EAG, LLC's clients soliciting
    them to sign up with [EAG, P.C.], in February 2004.
    The Operating Agreement also provides that a member
    cannot cease membership in EAG, LLC, by a voluntary
    act but only through the occurrence of events
    specified in the Alabama Limited Liability Company
    Act. Alabama Code [1975, §] 10-12-36, lists the
    events which will result in the cessation of a
    member's membership in a limited liability company.
    There is no evidence that any of the events which
    would cause Rowe to lose membership in EAG, LLC,
    occurred.

         "... [I]ndeed, Berks made the same allegations
    against Rowe in ... CV-2006-0749, in a verified
    motion to set aside the July 19, 2006, Settlement
    Agreement with Rowe and the motion was denied.
    Berks's appeal of the court's decision to deny the
    motion was unsuccessful.

                             24
1110423

         "Even were the defendants' argument correct that
    Rowe ceased to be a member prior to the execution of
    the Settlement Agreement, Berks would have been the
    sole owner of EAG, LLC, and would have been the
    holder of 100 percent of the Voting Interests when
    he signed the consent to dissolve EAG, LLC, on July
    19, 2006.

         "The effect would be the same: the immediate
    dissolution of EAG, LLC, on July 19, 2006, by the
    written consent to dissolution of those holding
    two-thirds or more of the Voting Interests. The bar
    of the survival of remedy statutes and caselaw would
    likewise be the same and EAG, LLC, would have no
    authority to hire a lawyer or to initiate claims
    after July 19, 2008.

         "The defendants maintain that, even if EAG, LLC,
    has been dissolved, Berks takes EAG, LLC's assets
    either by assignment or as the sole owner upon
    dissolution, including any contract and tort claims
    the company had against Cade. The defendants'
    resulting position is that Berks is not barred from
    asserting the counterclaims and the claims in the
    third party complaint because he became the owner of
    the claims when EAG, LLC, dissolved.      The law is
    otherwise.   A general assignment of all corporate
    claims does not preserve them past the wind-up
    period and Berks does not succeed to such claims by
    virtue of having been a member of EAG, LLC, by
    operation of law or otherwise. Nix, 830 F. Supp. at
    605. Even if the law provided for the assignment of
    such claims to former company members, there is no
    evidence of an assignment by EAG, LLC, of any of its
    property to anyone. In fact, Berks testified at
    deposition that he has no interest in the claims
    other than as [a] member of EAG, LLC.

         "Berks and [EAG], P.C., are certainly entitled
    to employ legal counsel of their choosing to defend
    claims made against them and to pursue claims
    belonging to them. Neither Berks nor [EAG], P.C.,

                             25
1110423

    has standing, however, to assert claims that
    belonged to EAG, LLC. The Court notes that the 2004
    settlement agreement (at mediation) was between Cade
    and EAG, LLC.    Berks and [EAG], P.C., were not
    parties to that agreement which is the basis for the
    claims asserted against the plaintiffs and the third
    party defendants in this action. It does not appear
    that Berks has any claims of his own to assert in
    this case.

         "The defendants argued that Rowe and the
    plaintiffs admitted that EAG, LLC, ha[d] not been
    dissolved when the plaintiffs named EAG, LLC, as a
    party in the complaint and Rowe intervened based on
    assertions that he is entitled to half of any monies
    awarded to EAG, LLC, in this case. The Court notes
    that on the dates that the complaint and the motion
    to intervene were filed, there was no public record
    reflecting EAG, LLC's dissolution because the
    company's articles of dissolution were not filed
    until February 4, 2010, well after the complaint and
    motion were filed. Regardless of any individual's
    belief that EAG, LLC, ha[d] not been dissolved, an
    event required to dissolve it has occurred and it is
    dissolved as a matter of law. As a matter of law,
    EAG, LLC, was dissolved on July 19, 2006, when all
    of its members gave their written consent to the
    dissolution.

         "Had EAG, LLC, not been dissolved, the outcome
    of the motion to disqualify would be the same. EAG,
    LLC's Operating Agreement provides that the business
    of the company is to be conducted in accordance with
    a vote by the holders of fifty-one percent (51%) of
    the Voting Interests in EAG, LLC. The evidence is
    that Rowe, a fifty percent (50%) Voting Interest
    holder, has not and will not vote in favor of having
    EAG, LLC, hire an attorney or to pursue the
    counterclaims and third party claims filed in this
    case. Based on its Operating Agreement and the
    evidence, EAG, LLC, has not been authorized to
    employ legal counsel or to proceed with its claims

                            26
1110423

    in this case. The attorneys appearing of record for
    EAG, LLC, are due to be disqualified.

         "The Defendants' Motion to Vacate and Expunge is
    due to be granted as to vacating the order allowing
    Rowe's   intervention.   Rowe's   purpose   for   his
    appearance was to assert an interest in the possible
    proceeds of claims asserted by EAG, LLC, and to
    prevent the company from incurring liability by
    attempting to collect on claims Rowe believes do not
    exist. This Court having found that EAG, LLC's
    winding-up period has expired, any claims it had
    having been extinguished and its having no legal
    existence, Rowe has no further interest in the
    outcome of the case. To the extent the defendants'
    motion seeks to expunge the public record of the
    articles of dissolution of EAG, LLC, filed by Rowe,
    it is due to be denied.     EAG, LLC, was, in fact,
    dissolved and the filing of the articles of
    dissolution is mandatory."

(Footnotes    omitted .)   The     trial   court's    order    contained

adjudications in keeping with the foregoing findings.

    In response, the defendants filed a "Motion to Alter,

Amend   or   Stay"   the   trial   court's   order,    in     which   they

requested, in light of plans to appeal, that the trial court

either stay or delete the portion of the foregoing order

directing counsel to withdraw within 10 days. The trial court

granted that request.

    Following the trial court's entry of the above order, the

plaintiffs, Palmer, and Lewis renewed their summary-judgment

request by means of a joint motion.        Specifically, they relied

                                   27
1110423

on the trial court's legal conclusions, as set out above, as

further support for the defendants' alleged lack of standing

and   the   trial   court's   resulting     lack     of   subject-matter

jurisdiction.

      Thereafter, the defendants filed a "Motion to Reconsider

and Vacate" alleging that the above holdings of the trial

court were contrary to Alabama's Limited Liability Company Act

in that § 10A-5-7.03(b), Ala. Code 1975, purportedly "does not

require a vote of the members to take any action once the LLC

begins winding up."     They further alleged that, as the member

tasked with winding up affairs of the EAG, LLC, Berks was

entitled both to defend the underlying claims and to prosecute

the related counterclaims and that the claims were not barred

by former § 10-12-43, Ala. Code 1975, as a result of the

exception   created   in   former    §   10-12-44,    Ala.   Code   1975,

relating to claims unknown to a limited-liability company at

the time of dissolution. 11   The defendants also filed their own

motion seeking a partial summary judgment as to counts III,

IV, and VI of the complaint filed by Cade and ELG, P.C. –-

      11
      The cited former Code sections, however, deal with
claims against a dissolved limited-liability company, both
known to the limited-liability company, see former § 10-12-43,
and unknown, see former § 10-12-44.

                                    28
1110423

which, they contended, were the only remaining viable claims

-- and alleging that the only damages claimed by Cade and ELG,

P.C.,    and    established      by    the     record       were        nonrecoverable

attorney fees.

    In        response,        Rowe     again        sought         to        intervene,

individually, and to strike all pleadings filed by defendants'

counsel after the entry of the trial court's disqualification

order.         The    plaintiffs       similarly       filed        a     response      in

opposition and a request to strike the defendants' partial-

summary-judgment motion.

    The       trial    court    denied        the    defendants'             "Motion    to

Reconsider and Vacate" in light of the findings from its prior

order, as set out above.              By separate order, the trial court

granted the renewed motion of the plaintiffs and of Lewis and

Palmer    for    a    summary    judgment,          also    based       on    its   prior

findings and conclusions of law, namely that the defendants

"have    no    standing   to    assert       claims        owned   by     [EAG,     LLC],

because [EAG, LLC,] never authorized them to assert the claims

in accordance with [EAG, LLC's] operating agreement."                                  The

trial court, therefore, concluded that it lacked subject-

matter    jurisdiction      over      the     counterclaim         and       third-party

                                         29
1110423

claims, and, as a result, it dismissed those claims and the

claims    asserted   by   the   plaintiffs   against   EAG,   LLC,   with

prejudice.     Thereafter, the plaintiffs requested that the

trial court dismiss with prejudice counts III, IV, and VI of

their complaint, which, they conceded, represented the only

remaining counts, and enter a final judgment disposing of the

underlying matter in its entirety.           The trial court granted

that motion; the defendants timely appealed.

                          Standard of Review

         "'On an appeal from a dismissal based on a lack
    of standing ..., we must view the allegations of the
    complaint in the light most favorable to the
    plaintiff, resolve all doubts in the plaintiff's
    favor, and uphold the ruling of the trial court only
    if we determine that the plaintiff cannot establish
    a right to judicial review under any set of facts
    provable under the allegations of the complaint.
    Richards v. Department of Revenue & Finance, 454
    N.W.2d 573, 574 (Iowa 1990).      No presumption of
    correctness   exists   as  to   the  trial   court's
    application of the law to the facts.       Jayroe v.
    Hall, 624 So. 2d 522 (Ala. 1993).      The issue of
    standing presents a pure question of law, and the
    trial court's ruling on that issue is entitled to no
    deference on appeal. Richards v. Cullen, 152 Wis.
    2d 710, 712, 449 N.W.2d 318, 319 (Wis. App. 1989).'"

Packaging Acquisition Corp. v. Hicks, 893 So. 2d 299, 301-02

(Ala. 2004) (quoting Medical Ass'n of Alabama v. Shoemake, 656

So. 2d 863, 865 (Ala. Civ. App. 1995)).            Accordingly, this

                                    30
1110423

Court would review de novo the issue whether the trial court

erred in granting the motion to dismiss based on its finding

as to its lack of subject-matter jurisdiction.               See Ex parte

Morgan Asset Mgmt., Inc., 86 So. 3d 309, 313-14 (Ala. 2011).

                                Discussion

    The defendants identify numerous alleged errors on the

part of the trial court.        The actual argument portion of their

brief,    however,   appears    limited    to    the   following:    (1)    a

challenge to the trial court's findings as to the effective

date of the dissolution and winding up of EAG, LLC; (2) a

challenge    to   the   trial   court's    determination      that    Berks

possessed no individual standing to assert claims to the fees

due EAG, LLC, under the 2004 settlement agreement; and (3) a

challenge    to   the   trial    court's   ruling      allowing    Rowe    to

intervene,    including    a     challenge      to   the   trial    court's

decision, as urged by Rowe, that EAG, LLC, could neither hire

                                    31
1110423

counsel        to    defend     itself       nor   assert      counterclaims. 12

Defendants' brief, at pp. 39-40.

                        1.    Dissolution of EAG, LLC

    Initially, the defendants challenge the trial court's

determination that EAG, LLC, was dissolved on July 19, 2006,

pursuant to the terms of the settlement agreement reached by

Berks    and    Rowe    in    case   no.   CV-06-749.        Contrary    to    that

finding,       the     defendants      maintain      that,     purportedly       in

accordance with statutory provisions governing the dissolution

of a limited-liability company, dissolution does not occur

until    all    members       agree,   the      limited-liability       company's

affairs are wound up, and articles of dissolution have been

filed    in    the   appropriate       county.     Thus,     according    to   the

defendants, the July 2006 agreement between Berks and Rowe to

dissolve EAG, LLC, was, as provided for in § 10A-5-7.01(2),

Ala. Code 1975, merely the initial step in dissolving EAG,

LLC, and the actual dissolution was not effected until the

    12
      To the extent any of the 14 issues identified by the
defendants in the "Statement of the Issues" portion of their
brief are not actually covered by the argument portion of
their brief, those claims would be deemed waived. See, e.g.,
Tucker v. Cullman-Jefferson Counties Gas Dist., 864 So. 2d
317, 319 (Ala. 2003) (stating that issues not raised and
argued in brief are waived).

                                           32
1110423

subsequent steps of winding up, governed by § 10A-5-7.03, Ala.

Code 1975, and the filing of formal articles of dissolution,

see § 10A-5-7.06, Ala. Code 1975, were completed.

    In support of this claim, the defendants note both that

§ 10A-5-7.04, Ala. Code 1975, provides that "[a] dissolved

limited liability company continues its existence but may not

carry on any business except that necessary or appropriate to

wind up and liquidate its business and affairs," and that,

pursuant to § 10A-5-7.03, the person charged with winding up

the limited-liability company may           "[p]reserve the company

business or property as a going concern for a reasonable time;

prosecute and defend actions and proceedings, whether civil,

criminal,   or   administrative;    [and]    settle   and   close   the

limited liability company's business."        In light of the plain

language of § 10A-5-7.04, as set out above, the defendants

also argue that Berks had "a reasonable time" in which to wind

up the affairs of EAG, LLC, including collecting the disputed

fees, and was not, as the trial court concluded, subject to

the fixed two-year winding-up period imposed on corporations

by former § 10-2A-203, Ala. Code 1975.       The defendants further

point to the fact that, here, the subject cases did not settle

                               33
1110423

and the disputed fees were not received and, thus, Cade's

alleged breach of the 2004 settlement agreement did not occur

until more than two years had elapsed from the July 2006

settlement agreement between Berks and Rowe.

    A.    Dissolution

    Despite their purported reliance on the "plain text" of

the applicable statutes governing the dissolution of limited-

liability companies, the defendants appear, in my opinion, to

wholly ignore the effects of those statutes.       Initially, as do

the plaintiffs, I note that § 10A-5-7.01, Ala. Code 1975,

provides, in pertinent part:

         "A limited liability company is dissolved and
    its affairs shall be wound up upon occurrence of the
    first of the following events:

               "(1) Events specified in the governing
          documents.

               "(2) Written consent of all members to
          dissolve.

               "...."

(Emphasis added.)

    Here,   the   governing   document,   namely    the   operating

agreement of EAG, LLC, specifically provides that "[EAG, LLC,]

shall be dissolved upon ... [t]he written consent of Members

                               34
1110423

holding one or more Voting Interests which taken together

equal or exceed two-thirds (2/3) of all Voting Interests to

dissolve the Company."        See note 5, supra.         It is undisputed

that,   pursuant   to   the   terms    of   the   July   2006   settlement

concluding case no. CV-06-749, Berks and Rowe agreed "to the

dissolution of EAG, LLC."             Therefore,   as the trial court

concluded, dissolution clearly occurred when, as provided for

in the operating agreement and as specified in 10A-5-7.01,

Berks and Rowe agreed in writing to dissolve EAG, LLC.                  In

fact, that written agreement satisfies both of the foregoing

prerequisites in § 10A-5-7.01.

    I see nothing to suggest, as the defendants allege on

appeal, that the trial court concluded that, pursuant to its

dissolution in July 2006, EAG, LLC, "automatically ceased to

exist."    Defendants' brief, at p. 40.             Instead, the trial

court's order, as set out above, plainly indicates, as also

described in § 10A-5-7.01, that, following the occurrence of

the specified "[e]vents of dissolution[,] a limited liability

company is dissolved and its affairs shall be wound up."

    The defendants appear to argue that, because the filing

of articles of dissolution pursuant to § 10-5-7.06, Ala. Code

                                   35
1110423

1975, is mandatory, dissolution is not effected until that

filing occurs.      The plain language of § 10A-5-7.06, however,

specifically provides that the articles of dissolution are to

be   filed   with   the   appropriate    probate   court   "[a]fter   the

dissolution of the limited liability company               pursuant to §

10A-5-7.01 ...."      (Emphasis added.)       Therefore, the statute

itself makes clear that the formal filing is not a part of the

actual     dissolution    process   but,   rather,   a   mere   follow-up

formality to place the public on notice that the dissolution

has occurred. 13     The defendants cite no authority suggesting

      13
      In at least two separate places in their brief to this
Court, the defendants appear to contend briefly that the
articles of dissolution filed by Rowe failed to meet the
statutory requirements of § 10A-5-7.06. Defendants' brief, at
pp. 44 n.15, 46. More specifically, the defendants indicate
that "[t]here was no evidence of compliance offered by Rowe"
and that the articles were, therefore, due to be expunged.
Defendants' brief, at p. 44 n.15.     To the extent that the
defendants intended this to be a separate claim, I note that
they have included no real explanation or any supporting
authority demonstrating how the articles of dissolution were
deficient.  Accordingly, because they failed to comply with
the requirements of Rule 28(a)(10), Ala. R. App. P., they have
waived this potential claim for purposes of appellate review.
See City of Birmingham v. Business Realty Inv. Co., 722 So. 2d
747, 752 (Ala. 1998) ("When an appellant fails to cite any
authority for an argument on a particular issue, this Court
may affirm the judgment as to that issue, for it is neither
this Court's duty nor its function to perform an appellant's
legal research.").

                                    36
1110423

otherwise.      The   trial   court,        therefore,   did    not    err    in

concluding that the dissolution of EAG, LLC, occurred in July

2006 -- when Rowe and Berks agreed to dissolution pursuant to

the terms of the mediated settlement agreement reached in case

no. CV-06-749.

    B.     Winding up

    The defendants next contend that during the process of

winding up a limited-liability company, the limited-liability

company,   as   specified     in   §    10A-5-7.03,      Ala.   Code    1975,

continues its existence "for a reasonable time," during which

it may not engage in any new business, but the person charged

with winding up the limited-liability company may, among other

acts, "prosecute and defend actions and proceedings."                        See

also § 10A-5-7.04(a), Ala. Code 1975 ("A dissolved limited

liability company continues its existence but may not carry on

any business except that necessary or appropriate to wind up

and liquidate its business and affairs.").               Thus, in light of

the plain language of § 10A-5-7.03, the defendants contend

that the trial court erred in fixing the winding-up period at

the automatic, two-year cut-off period applied to corporations

under former § 10-2A-203, Ala. Code 1975.             In further support

                                       37
1110423

of this allegation of error, the defendants note that the

disputed fees were not paid and thus not subject to collection

until over two years after the 2006 dissolution date.

       The plaintiffs appear to concede that EAG, LLC, continued

"to exist ... for the limited purpose of carrying out only

that        business   necessary       to   wind        up     and   liquidate."

Plaintiffs' brief, at p. 18.           They counter, however, that that

process was to be undertaken by the members who, at all times,

remained bound by the terms of the operating agreement.                         See

Harbison v. Strickland, 900 So. 2d 385, 391 (Ala. 2004).                       More

specifically, they argue that no vote occurred during the

winding-up period authorizing either member or EAG, LLC, to

prosecute the subject claims.

       Although I agree that the trial court's application of a

two-year       winding-up    period    appears     to        conflict   with    the

"reasonable       time"     language    found      in    §     10A-5-7.03,      the

defendants, nonetheless, have failed to convince me that the

trial court's decision in this regard constitutes reversible

error. 14      First, I note that, other than a citation to the

       14
      The plaintiffs contend on             appeal, as the trial court
also apparently concluded, "that            a limited liability company
formed to provide professional              services is subject to the
Revised  Alabama   Professional              Corporation Act   and  is,

                                       38
1110423

general statutory authority set out above, the defendants fail

to identify any supporting authorities applying those sections

to   factual    scenarios      similar     to   the   one    before   us    or

establishing what is a "reasonable time" for winding up as

contemplated by the Code.         Notably, the defendants similarly

fail   either   to   discuss     or   to   attempt    to    distinguish    the

authorities cited in the trial court's order as support for

the challenged finding.          I, therefore, question whether the

defendants'     argument    in    this     regard     comports    with     the

requirements of Rule 28, Ala. R. App. P.

       This Court has repeatedly cautioned that

            "'Rule 28(a)(10), Ala. R. App. P., requires that
       arguments in an appellant's brief contain "citations
       to the cases, statutes, other authorities, and parts
       of the record relied on." Further, "it is well
       settled that a failure to comply with the
       requirements of Rule 28(a)(10) requiring citation of
       authority in support of the arguments presented
       provides this Court with a basis for disregarding
       those arguments." State Farm Mut. Auto. Ins. Co. v.
       Motley, 909 So. 2d 806, 822 (Ala. 2005) (citing Ex
       parte Showers, 812 So. 2d 277, 281 (Ala. 2001)).
       This is so, because "'it is not the function of this

therefore, subject to the Alabama Business Corporation Act"
and the two-year limitations period on winding up corporate
affairs upon dissolution. Plaintiffs' brief, at p. 31. As
discussed in more detail below, however, an analysis of this
particular argument would not be necessary, because the trial
court's findings are due to be affirmed on other grounds.

                                      39
1110423

      Court to do a party's legal research or to make and
      address legal arguments for a party based on
      undelineated general propositions not supported by
      sufficient authority or argument.'" Butler v. Town
      of Argo, 871 So. 2d 1, 20 (Ala. 2003)(quoting Dykes
      v. Lane Trucking, Inc., 652 So. 2d 248, 251 (Ala.
      1994)).'"

Prattville Mem'l Chapel v. Parker, 10 So. 3d 546, 560 (Ala.

2008) (quoting Jimmy Day Plumbing & Heating, Inc. v. Smith,

964 So. 2d 1, 9 (Ala. 2007)).                  Here, as noted above, the

defendants have failed to include any citation to authority in

support of the argument presented.                "It is the appellant's

burden to refer this Court to legal authority that supports

its argument."       Madaloni v. City of Mobile, 37 So. 3d 739, 749

(Ala. 2009).        In the absence of such, the defendants have

waived this claim on appeal.

      In addition, I am unconvinced that it was unreasonable on

the   part   of    the   trial   court    to   infer   that    the   statutory

winding-up period for one type of corporate entity may serve

as a presumptively reasonable winding-up period for another.

Certainly,    as    noted   above,   the       defendants     have   failed   to

identify any authority stating that it may not.

      Finally, I see nothing to indicate, as Berks argues, that

he was, in fact, charged by Rowe with sole responsibility for

                                     40
1110423

winding up the business of EAG, LLC.                      Instead, the terms of

the 2006 settlement agreement appear to indicate that Berks

was charged only with taking steps to formally dissolve EAG,

LLC, i.e., filing articles of dissolution. 15                        I further note

that, also pursuant to the terms of that agreement, Berks and

Rowe    agreed    to        proceed    with      dissolution    pursuant      to    the

applicable       terms         of     the     operating     agreement.        As     to

dissolution,          the    operating      agreement     plainly      states      that

"[t]he Members" are the appropriate party to pursue litigation

on behalf of ELG, LLC.              See note 5, supra.          Thus, even if, as

Berks       argues,    the    underlying         counterclaim    was    the   direct

result of his purported efforts at "winding up," there is

nothing suggesting that, in that role, he was excused from the

requirement of obtaining a majority vote                        in    favor of his

actions before proceeding on behalf of EAG, LLC.                        In light of

the foregoing, I see no error in this regard.

                      2.     Berks's Individual Standing

       A.     Devolvement of Assets of EAG, LLC, to Members upon
              Dissolution

       15
      In fact, it was Berks's failure to carry out this
responsibility that led to the subsequent filing of articles
of dissolution by Rowe.

                                            41
1110423

         The defendants next contend that, assuming that the trial

court      correctly     ruled    that    EAG,   LLC,   was    dissolved,        the

interest in the contested cases held by EAG, LLC, as set out

in the 2004 settlement agreement, devolved to Berks pursuant

to the distribution of the assets of EAG, LLC, as provided for

in   §    10A-5-7.05.          Thus,    Berks   maintains,    he    possessed      a

sufficient interest to impart the requisite standing to assert

the claims accruing to EAG, LLC, under the 2004 settlement

agreement.          I disagree.

         The    cited   Code    section   merely   provides     the    following

"order         of   priority"     for    distributing    the       assets   of     a

dissolving limited-liability company during the winding-up

period:

              "(1) To creditors, including members who are
         creditors   to  the  extent   allowed  by  Section
         10A-5-3.01 or otherwise permitted by law, in order
         of priority as provided by law, except those
         liabilities to members of the limited liability
         company for interim distributions or on account of
         their contributions.

              (2) Except as otherwise provided in the
         governing documents, to members of the limited
         liability company and former members for interim
         distributions and in respect of their contributions.

              (3) Except as otherwise provided in the
         governing documents, to members first for the return
         of their contributions and second with respect to

                                          42
1110423

      their interests in the limited liability company, in
      the proportions in which the members share in
      distributions."

In   support    of     his    apparent    contention         that   the    foregoing

supports his claim of individual standing to assert claims

belonging to the former limited-liability company, Berks cites

a single appellate decision from Washington state for the

general proposition that title to limited-liability-company-

owned    assets      and     property    devolve    to       the    owners    of   the

limited-liability company upon dissolution of the limited-

liability company.             See Sherron Assocs. Loan Fund V (Mars

Hotel)    LLC   v.     Saucier,    157    Wash.    App.      357,    237   P.3d    338

(2010).      Notably,         however,    the     Saucier      court's       decision

concerned the devolution of a perfected judgment held by a

defunct limited-liability company and its finding that "[a]

judgment is an intangible asset."                 157 Wash. App. at 363, 237

P.3d at 363.

      Berks, however, offers only his own unsupported argument

–- failing to cite to this Court any binding authority                              –-

indicating      that    the    claim     at    issue,   an    inchoate       contract

right, is an "asset" of EAG, LLC, that would have devolved to

                                          43
1110423

the members of EAG, LLC, upon its dissolution. 16                In fact,

Berks acknowledges that he was unable to find any Alabama law

to support his claim.       I note, however, that both Hutson v.

Fulgham Industries, Inc., 869 F.2d 1457 (11th Cir. 1989), and

Nix v. W.R. Grace & Co.-Conn., 830 F. Supp. 601 (S.D. Ala.

1993), which were cited in the order of the trial court from

which    Berks   appeals,   appear      to   stand   for   the   contrary

proposition.

    Specifically,      in   Nix,     the     federal   district     court

discussed and applied the holding of the United States Court

of Appeals for the Eleventh Circuit in Hutson as follows:

         "In a small number of cases, courts have held
    corporate survival statutes inapplicable to suits
    filed by shareholders of a dissolved corporation
    even though those actions were based on injuries to
    the corporation. In each of those instances,
    however, the court's reasoning was based on the
    equitable principle that a corporation's assets
    devolve to its shareholders, and the shareholder in
    each case could identify 'a tangible property asset'
    which had devolved by operation of law or which had

    16
      Any contention by Berks that, as a result of Rowe's
departure, Berks was the sole remaining member of EAG, LLC,
and thus the only one entitled to assert claims purportedly
accruing to EAG, LLC, appears meritless.       See Richard A.
Thigpen, Alabama Corporation Law § 1:18 (4th ed. 2012) ("Under
[the Code], the departure of one or more members does not work
an automatic dissolution of a company even where the company
is left with no remaining members." (footnote omitted)).

                                   44
1110423

    been assigned to the shareholder. Davis v. St. Paul
    Fire & Marine Ins. Co., 727 F. Supp. 549, 551
    (D.S.D. 1989).   This exception is consistent with
    the purpose of the corporate survival statutes
    because 'the other party is not prejudiced by
    allowing a cause of action relating to collection of
    a tangible asset since the assignee of that property
    has a fixed and identifiable right separate from the
    corporations' original right.' Id. at 551–52.

         "For example, in Jenot v. White Mountain
    Acceptance Corp., 124 N.H. 701, 474 A.2d 1382 (1984)
    and Shute v. Chambers, 142 Ill. App. 3d 948, 97 Ill.
    Dec. 92, 492 N.E.2d 528 (Ill. App. Ct.1986), former
    shareholders sued corporate debtors whose debts were
    evidenced by a note or mortgage and were of a fixed
    or ascertainable amount. In contrast, the amount,
    or even the existence, of any debt between the
    defendants   in  the  instant   case  and   Bel  Air
    Corporation is disputed. In Carmichael v. Halstead
    Nursing Center, Ltd., 237 Kan. 495, 701 P.2d 934
    (1985) and Levy v. Liebling, 238 F.2d 505 (7th Cir.
    1956), cert. denied, 353 U.S. 936, 77 S.Ct. 812, 1
    L. Ed. 2d 759 (1957), the corporation's claims
    against the defendant had been reduced to judgment
    before dissolution and were therefore considered to
    be corporate assets. In this case, there is
    obviously no judgment since plaintiff's claims
    against these defendants have never been litigated.

         "It is this limited exception that was the focus
    of the Hutson opinion. Like Nix, the plaintiff in
    Hutson claimed that the breach of contract and tort
    claims he asserted were assets of the dissolved
    corporation and became his either by operation of
    law or by assignment. The issue in Hutson was
    'whether   Foresco     [the   dissolved  corporation]
    possessed any corporate assets to which Hutson, as
    a  former    Foresco    shareholder,  became  legally
    entitled upon Foresco's dissolution.' Hutson, 869
    F.2d at 1461.        The appellate court addressed

                             45
1110423

    Hutson's fraud    and   breach   of   contract   claims
    separately.

         "In discussing the contract claim, the court,
    citing Jenot, recognized that the corporate survival
    statutes 'were not intended "to supplant the
    equitable rule that former shareholders succeed to
    the assets of a dissolved corporation,"['] but held
    that it was 'unwilling, however, to extend the
    equitable rule so far as to recognize a "property
    interest" in an unasserted corporate contract claim
    which involves evidentiary problems and factual
    disputes.' Id. at 1462–63. The Court then went on
    to state that such contract claims 'must be asserted
    within the wind-up period (or be properly assigned)
    to survive dissolution.'

         "Based on the latter statement, Nix asserts that
    a mere general assignment of all corporate claims
    will defeat the survival statute.      Moreover, Nix
    argues that since defendants have not challenged the
    validity of the general assignment, the assignment
    must have been proper. Plaintiff ignores the
    appellate court's holding that an unasserted breach
    of contract claim is not a property interest or
    asset. See also Canadian Ace Brewing Co. v. Joseph
    Schlitz Brewing Co., 629 F.2d 1183 (7th Cir. 1980)
    (distinguishing between an unasserted claim and a
    claim reduced [to] judgment prior to dissolution,
    the latter being extinguished after the wind-up
    period ends). A corporation cannot assign a property
    interest that does not exist. Consequently, the
    validity of the Bel Air Corporation's general
    assignment is inconsequential."

830 F. Supp. at 604-05.

    The defendants thus fail to convince me that the claims

of EAG, LLC, which were based upon the plaintiffs' disputed

breach of the 2004 settlement agreement, were, in fact, the

                              46
1110423

type of asset contemplated by § 10A-5-7.05.             See Hutson, 869

F.2d        at   1463   n.15   (explaining   the   Court's    holding   as

"declin[ing] to include unasserted corporate contract claims

within the equitable [devolution] rule's operation").              In the

absence of Berks's actual ownership of the claim of EAG, LLC,

which Berks purported to assert below, I cannot fault the

trial court for finding that Berks lacked               the   ability to

pursue the claim. 17

       17

                      "'This Court may affirm a trial
                 court's judgment on "any valid legal ground
                 presented by the record, regardless of
                 whether that ground was considered, or even
                 if it was rejected, by the trial court."'
                 General Motors Corp. v. Stokes Chevrolet,
                 Inc., 885 So. 2d 119, 124 (Ala. 2003)
                 (quoting Liberty Nat'l Life Ins. Co. v.
                 University of Alabama Health Servs. Found.,
                 P.C., 881 So. 2d 1013, 1020 (Ala. 2003));
                 Vesta Fire Ins. Corp. v. Milam & Co.
                 Constr., 901 So. 2d 84, 104 (Ala. 2004)
                 ('Subject   to   limited   exceptions,   an
                 appellate court will affirm a summary
                 judgment on the basis of a law or legal
                 principle not invoked by the moving party
                 or the trial court, even though an
                 appellate court will not reverse a summary
                 judgment on the basis of a law or legal
                 principle not first argued to the trial
                 court by the nonmoving party.' (footnote
                 omitted)). However, this Court has stated:
                 'This rule fails in application only where
                 due-process constraints require some notice
                 at the trial level, which was omitted, of
                                      47
1110423

    B.    Berks's Individual Standing Pursuant to the 2004
          Settlement Agreement

    Alternatively,     the     defendants       maintain     that,     even

assuming, as the trial court concluded, that the rights of

EAG, LLC, under the 2004 settlement agreement did not devolve

to Berks upon its dissolution, Berks nonetheless possessed

standing to assert claims under that agreement as an intended

third-party   beneficiary    of   the   2004    settlement      agreement.

Specifically,   they   point      to    the    language    of    the   2004

settlement agreement providing that payment of the disputed

fees was to be made to EAG, LLC, with "each principal of [EAG,

LLC,] entitled to half."     Thus, the defendants contend, Berks

is an identified third-party beneficiary of that agreement,

          the basis that would otherwise support an
          affirmance, such as when a totally omitted
          affirmative defense might, if available for
          consideration,    suffice   to   affirm   a
          judgment, or where a summary-judgment
          movant has not asserted before the trial
          court a failure of the nonmovant's evidence
          on an element of a claim or defense and
          therefore has not shifted the burden of
          producing substantial evidence in support
          of that element.' [Liberty Nat'l Life Ins.
          Co. v.] University of Alabama Health Servs.
          [Found., P.C.], 881 So. 2d [1013] at 1020
          [(Ala. 2003)] (citations omitted)."

Warren v. Hooper, 984 So. 2d 1118, 1121 (Ala. 2007).
                                   48
1110423

who is entitled to assert a claim that the 2004 settlement

agreement has been breached.

      Pursuant to the authorities cited by the defendants:

           "To recover under a third-party-beneficiary
      theory, [Berks] must show: (1) that the contracting
      parties intended, at the time the contract was
      created, to bestow a direct benefit upon a third
      party; (2) that the claimant was the intended
      beneficiary of the contract; and (3) that the
      contract was breached."

Ex   parte   Steadman,   812   So.   2d   290,   295   n.3   (Ala.   2001).

Further, "[a] third person has no rights under a contract

between others," and no standing to sue based on a breach of

that contract, "unless the contracting parties intend that the

third person receive a direct benefit enforceable in court."

Russell v. Birmingham Oxygen Serv., Inc., 408 So. 2d 90, 93

(Ala. 1981) (citations omitted).

      In Russell, where a nonparty to a noncompete agreement

attempted to enforce that agreement based upon his ownership

of the contracting company, this Court noted:

           "Appellees argue that it makes no difference
      whether Birmingham Oxygen or Southeastern Medical
      enforces the non-competition agreement, since Barney
      C. Eller wholly owns both corporations and it was
      him with whom Edwards and Russell dealt. This
      contention is without merit.    A corporation is an
      entity   created   by  compliance   with   statutory
      requirements.   A corporation has the right to sue

                                     49
1110423

       and be sued just like a natural person.      Alabama
       Constitution, Article XII, § 240; Code 1975, §
       10-2A-20(2).      A  corporation,  just    like   an
       individual,  must   enforce  its  own   rights   and
       privileges."

408 So. 2d at 93.

       Here, it is clear, based upon the language of the 2004

settlement        agreement,    that    the    right    to    payment      that    was

created under that agreement accrued to EAG, LLC, to whom the

payment     was    explicitly    due.         After    --    and   only    after    --

payment had been made to EAG, LLC, did the agreement explain

how it was to be divided among the members thereof.                        Thus the

agreement evinces an intent only to directly benefit EAG, LLC,

which is also the only party entitled to sue if the promised

payment was not made. 18         Russell, supra.             Consequently, only

an indirect benefit was bestowed on Berks and Rowe pursuant to

the agreement, solely in their capacity as principals of EAG,

LLC.        Therefore,   the     trial       court    also     did   not    err     in

concluding that Berks lacked the ability to enforce the 2004

settlement agreement as a third-party beneficiary thereof.

                         3.    Rowe's Intervention

       18
      Presumably, however, if EAG, LLC, had, in fact, received
the funds and had failed to distribute them equally to both
Rowe and Berks, Berks would have had a derivative claim
against EAG, LLC.

                                        50
1110423

       Finally,        the    defendants         contend      that    the     trial    court

erred in granting Rowe's request to intervene on behalf of

EAG,    LLC,      pursuant      to    Rule       24,     Ala.    R.     Civ.      P.      More

specifically, they assert that the grounds cited by Rowe in

his intervention motion were insufficient to sustain the trial

court's      ruling      in    that    Rowe's      interests          were     purportedly

adequately represented by the defendants' opposition to the

plaintiffs' complaint and further that Rowe's postintervention

position constituted a breach of the members' duties imposed

on    Rowe   by    §    10A-5-3.03,         Ala.       Code     1975.        In    sum,    the

defendants argue that by permitting Rowe's intervention on

allegations including that EAG, LLC, constituted an ongoing

entity, 19 but permitting Rowe to successfully represent, in

subsequent pleadings, that EAG, LLC, had been dissolved in

July 2006, the trial court "erroneous[ly] refus[ed] to apply

§    10A-5-3.03(f)(1-3),             and   the     law    on     judicial         estoppel."

Defendants'        brief,      at    p.    56.     See,       e.g.,     Ex    parte     First

Alabama      Bank,      883    So.    2d    1236,       1241     (Ala.       2003)     ("'The

doctrine of judicial estoppel "applies to preclude a party

       19
      The plaintiffs explain that this initial position was
taken by all parties based on the continued existence of EAG,
LLC, in public records.

                                             51
1110423

from assuming a position in a legal proceeding inconsistent

with one previously asserted."'" (quoting Jinright v. Paulk,

758 So. 2d 553, 555 (Ala. 2000), quoting in turn Selma Foundry

& Supply Co. v. Peoples Bank & Trust Co., 598 So. 2d 844, 846

(Ala. 1992))).

    This appears to be a nonissue.            As set out in the facts

above, Rowe's intervention was the result of a "stipulation

and agreement reached in open court," by all parties to the

underlying proceeding, who apparently conceded that "Rowe ...

[should    be]    made   a    party    ...   and   ...   aligned   as   a

Plaintiff...."     It thus appears that the defendants' own claim

that the intervention was improper would be precluded by the

very judicial-estoppel principles they raise on appeal.            First

Alabama Bank, supra.         Alternatively, the defendants, by their

conduct below, invited the error of which they now complain.

See Ex parte King,       643 So. 2d 1364, 1366 (Ala. 1993) ("[The

doctrine   of    invited error] provides that a party may not

complain of error into which he has led the court." (citing

Aetna Life Ins. Co. v. Beasley, 272 Ala. 153, 157, 130 So. 2d

178, 182 (1961))).

                                      52
1110423

    In addition, to the extent that the defendants' claim

represents      a    challenge      to   the    trial   court's    failure   to

immediately grant the defendants' motion seeking to vacate the

trial court's intervention order, I also fail to see any error

in that regard.        Not only was Rowe aligned as a plaintiff from

the outset, as the plaintiffs note, but also, as both sets of

parties represent in their respective briefs, the trial court

did, in fact, subsequently vacate the order permitting Rowe's

intervention.        Thus,    any    potential     relief   from    the   trial

court's order permitting the alleged erroneous intervention of

Rowe has already been obtained, and the resulting challenge to

the intervention order is moot.                See Woods v. SunTrust Bank,

81 So. 3d 357, 363 (Ala. Civ. App. 2011).

                                   Conclusion

    Based on the foregoing, I conclude that the trial court's

judgment was entered without error and is, in all aspects, due

to be affirmed.         Because I see little, if any, precedential

value in a published           opinion, I concurred in the Court's

decision   to       affirm   the    trial     court's   judgment   without   an

opinion and I now concur in overruling the application for

rehearing.

                                         53
1110423

MOORE, Chief Justice (dissenting).

       Martin Berks, Environmental Attorneys Group, LLC ("EAG"),

and Environmental Attorneys Group, P.C., apply for rehearing

of this Court's no-opinion affirmance of the trial court's

summary   judgment.     Because      I    believe    that   the   trial   court

improvidently entered a summary judgment, I would grant the

application for rehearing and reverse this Court's decision on

original submission. Therefore, I respectfully dissent.

                    I. Facts and Procedural History

       In 2001, attorneys Martin Berks and Mark Rowe formed EAG

to pursue toxic-tort litigation. Berks and Rowe were the sole

members of the limited-liability company, and each retained a

50%    membership    and   voting        interest.    Gregory     Cade   was    an

associate attorney with EAG with no membership interest.

       In 2004 Cade left EAG, which then sued him for allegedly

attempting to steal its clients and pending toxic-tort cases.

Cade and EAG settled that dispute in mediation, agreeing that

Cade    could   take    with   him       certain     toxic-tort      cases     and

establishing    a    formula   to    divide     any    fees   that    might     be

derived from those cases. Also in 2004, Berks and Rowe went

                                         54
1110423

their separate ways, forming new individual firms and doing no

new business through EAG.

    In 2006, Rowe sued Berks for Rowe's share of the assets

of EAG. As part of a mediated settlement, Berks and Rowe

agreed to dissolve EAG. Rowe also accepted a cash payment in

lieu of his claim to fees from EAG's pending toxic-tort cases.

In 2007 Rowe joined the law firm where Cade was working --

Environmental Litigation Group, P.C. ("ELG"). In November 2008

one of the cases covered by the 2004 settlement agreement

between EAG and Cade settled, generating a $2.4 million fee.

After Cade received the settlement proceeds, he and ELG sued

Berks and EAG seeking to avoid paying EAG any portion of the

fee. Cade and ELG argued that Berks had breached the 2004

settlement   agreement,   thus   relieving   Cade   of   the   duty    to

perform   his   portion   of     that   contract.   Berks      and    EAG

counterclaimed, seeking a 50% share of the fee pursuant to the

2004 settlement agreement.

    Rowe moved to intervene on behalf of EAG, arguing that as

a 50% member he had an interest in the $2.4 million fee.

However, Rowe   later switched his position, arguing that as a

member of EAG he had not authorized EAG to hire counsel to

                                  55
1110423

defend Cade and ELG's action and to counterclaim for the $1.2

million fee. Rowe further moved to disqualify counsel for EAG

on the ground that he had not voted to permit EAG to sue for

the withheld fee. Thus, Rowe effectively became an adversary

of EAG, though still nominally a member.

      The trial court granted the motion to disqualify counsel,

thus disabling EAG from defending the suit and asserting its

counterclaims. The court also denied Berks's personal claim to

the assets of EAG as a successor in interest, thus preventing

him from seeking a portion of the $2.4 million fee as a third-

party beneficiary. The trial court subsequently entered a

summary judgment for the plaintiffs based on the reasoning in

its   order   disqualifying   counsel.   With   EAG   unable   to

counterclaim for a portion of the fees, Cade and ELG then

dismissed their own remaining claims, concluding the case.

                    II. Standard of Review

      "We review a trial court's summary judgment de novo,

giving the judgment no presumption of correctness." Baldwin v.

Branch, 888 So. 2d 482, 484 (Ala. 2004). A summary judgment is

proper when there is "no genuine issue as to any material fact

                               56
1110423

and ... the moving party is entitled to a judgment as a matter

of law." Rule 56, Ala. R. Civ. P.

                            III. Analysis

    The trial court, relying on a portion of the Business and

Nonprofit Entities Chapter of the Alabama Code, 20 ruled that

EAG ceased to exist in 2008, two years after Rowe and Berks

agreed to dissolve it. But the part of the Code applicable to

limited-liability     companies     ("the    LLC   Code")     specifically

provides   that   a   limited-liability       company    ("LLC")    has   a

"reasonable   time"    in   which    to     wind   up   its    affairs.   §

10A-5-7.03, Ala. Code 1975. A specific statute in the LLC Code

would ordinarily prevail over a parallel rule in the Business

Corporations Code, even if construed to apply also to LLCs.

"Where statutes in pari materia are general and specific, the

    20
      Sections 10A-1-9.21 and -9.22, Ala. Code 1975 (formerly
§§ 10-2B-14.06 and -14.07), provide only a two-year survival
of claims against a dissolved domestic entity. They do not
similarly bar claims asserted by the entity. By contrast,
predecessor § 10-2A-203, Ala. Code 1975, cited by the trial
court in its order, eliminated any "remedy to or against such
corporation." (Emphasis added.) The court equated § 10-2A-203,
superseded in 1994 and thus not applicable to this case, with
§§ 10-2B-14.06 and -14.07 in its limiting effect on claims
brought by the dissolved entity. Section 10A-5-8.01(g) (former
§ 10-12-45), Ala. Code 1975, generally applies "restrictions
imposed   on   professional   corporations   by  the   Alabama
Professional Corporation Law" to limited-liability companies
that render professional services.

                                    57
1110423

more specific statute controls the more general statute."

Crawford v. Springle, 631 So. 2d 880, 882 (Ala. 1993). Surely

it was reasonable to keep the entity in existence beyond two

years to "wind up" the receipt of fees from cases pending at

the time dissolution was undertaken.

      Additionally, Rowe's effort to prevent EAG from asserting

entitlement to fees arising from the 2004 settlement agreement

is a forbidden act of disloyalty to EAG. A member in a member-

managed LLC owes a fiduciary duty of loyalty to the LLC.

      "A member's duty of loyalty to a member-managed
      limited liability company and its members is limited
      to each of the following:

          "....

           "(2) To refrain from dealing with the limited
      liability company in the conduct or winding up of
      the limited liability company's business as or on
      behalf of a party having an interest adverse to the
      limited liability company."

§   10A-5-3.03(f),   Ala.   Code   1975   (emphasis   added).   An   LLC

member also has an "obligation of good faith and fair dealing"

in activities in relation to the LLC. § 10A-5-3.03(h), Ala.

Code 1975. Further, the governing documents of an LLC may not

eliminate the duty of loyalty or the obligation of good faith

                                   58
1110423

and fair dealing. §§ 10A-5-3.03(l)(2) and -3.03(l)(4), Ala.

Code 1975.

       Rowe successfully argued to the trial court that, as a

member of EAG with a 50% voting interest, he could prevent the

entity from taking legal action to collect funds owed to it.

He also successfully argued that by withholding his vote he

could prevent EAG from defending itself in the action brought

by Cade and ELG. But Rowe's duty of loyalty to EAG precluded

his taking action either for himself or for another "adverse

to the limited liability company." ELG, the law firm for which

both Cade and Rowe worked, obviously had an interest adverse

to EAG in not sharing the settlement funds Cade had received

from   cases   that   were   the   subject   of   the   2004   settlement

agreement. By using his vote as a member of EAG to prevent EAG

from claiming funds that derived from the 2004 settlement

agreement between EAG and Cade, Rowe violated his duty of

loyalty to EAG.

       Because "limited liability companies are creatures of

statute," Harbison v. Strickland, 900 So. 2d 385, 389 (Ala.

2004), "operating agreements of limited liability companies

... incorporate the provisions of the statutes that allow for

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the creation of such agreements." 900 So. 2d at 391. "Thus,

the plain language of § 10-12-21(l), Ala. Code 1975 [the

predecessor statute to § 10A-5-3.03(l)], does not allow an

operating agreement for a limited liability company ... to

eliminate a manager's duty of loyalty ...." 900 So. 2d at 390.

See also Polk v. Polk, 70 So. 3d 363, 371 (Ala. Civ. App.

2010) (citing Harbison).

      Rowe was not at liberty to employ his voting power to

prevent EAG from litigating its right to fees derived from the

2004 settlement agreement. His nonwaivable fiduciary duty of

loyalty precludes his effort to act contrary to the interests

of EAG. By failing to read the duty of loyalty into the

operating agreement for EAG, the trial court entered a summary

judgment on a ground forbidden by the LLC Code.

                         IV. Conclusion

      By applying a general two-year winding-up provision from

the   Business   Corporations   Code   rather   than   the   specific

"reasonable time" provision from the LLC Code, the trial court

wrongly held that EAG ceased to exist as a legal entity prior

to Cade and ELG's filing their action against it. By failing

to read the operating agreement in light of the statutory duty

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of   loyalty,   the   trial   court    mistakenly   permitted   Rowe   to

stymie EAG's capacity to defend itself. Because both rulings

were legally incorrect, I would grant the application for

rehearing, reverse the trial court's summary judgment, and

remand the case for EAG to litigate its counterclaims.

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