Court Opinion

ID: 4371930
Source: CourtListenerOpinion
Date Created: 2019-02-27 21:00:23.096312+00
Date Added: 2024-06-11T14:49:36.860327
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                             FEB 27 2019
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

WASHINGTON POTATO COMPANY,                       No.   18-35098

              Plaintiff-counter-claim-           D.C. No. 4:17-cv-05032-RMP
              defendant-Appellee,

 v.                                              MEMORANDUM*

J.R. SIMPLOT COMPANY,

              Defendant-counter-claimant-
              plaintiff-Appellant,

  v.

OREGON POTATO COMPANY,

              Third-party-defendant.

                   Appeal from the United States District Court
                     for the Eastern District of Washington
                Rosanna Malouf Peterson, District Judge, Presiding

                      Argued and Submitted February 4, 2019
                               Seattle, Washington

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: IKUTA and CHRISTEN, Circuit Judges, and CHOE-GROVES,** Judge.

      J.R. Simplot Company (Simplot) appeals the district court’s grant of partial

summary judgment to Washington Potato Company (WPC) based on the district

court’s conclusion that WPC lawfully exercised its option to purchase Simplot’s

one-half interest in Pasco Processing, LLC under the provisions governing

Deadlock in the Amended and Restated Limited Liability Company Operating

Agreement (Agreement).1 The district court certified its order granting partial

summary judgment to WPC as final under Rule 54(b) of the Federal Rules of Civil

Procedure. We thus have jurisdiction over this appeal under 28 U.S.C. § 1291.

We affirm the district court.

      Although the Members must agree on Capital Contributions, the Agreement

makes clear that the Members “shall vote their respective Percentage Interests

through the Board of Members.” Pursuant to this provision, Members approve of

Capital Contributions through the Board of Members. The affirmative vote of a

majority of the Board of Members is necessary for an action under Section 6.9.

Therefore, a Deadlock arises under Section 12.13 of the Agreement when the

      **
             The Honorable Jennifer Choe-Groves, Judge for the United States
Court of International Trade, sitting by designation.
      1
        The Agreement capitalizes defined terms. We use the same capitalization
as the Agreement in this disposition.
                                          2
Board of Members does not approve setting requirements for additional Capital

Contributions because of a Tie Vote.

      Even if a vote of the Board of Members is not the exclusive means through

which Members may act with respect to the obligation to make further Capital

Contributions, see, e.g., Section 3.4, read in the context of the Agreement as a

whole, Section 5.2(l) provides that the Manager may set requirements for Capital

Contributions with the written approval of the Board of Members when those

Capital Contributions have not been “approved in the Annual Business Plan and/or

agreed to by the Members and Board of Members.” We do not read Section 5.2(l)

as precluding the Manager from setting such requirements in all cases, because

such a reading would render the phrase “without the written approval of the Board

of Members” superfluous. Because Section 5.2(l) concerns only the Board’s

authority to approve the Manager’s actions, our interpretation of Section 5.2(l)

does not make other provisions in the Agreement that require the Board of

Members’s approval superfluous. Therefore, because the affirmative vote of a

majority of the Board of Members is necessary for an action under Section 6.9, a

Deadlock arises under Section 12.13 of the Agreement when the Board of

Members does not approve granting the Manager the authority to set requirements

for additional Capital Contributions under Section 5.2(l) because of a Tie Vote.

                                          3
      This interpretation is consistent with Section 3.4 of the Agreement. While

Section 3.4 provides that Members are not “obligated to make any further Capital

Contributions, unless all Members agree in writing on the terms upon, and the

proportions in which, such Capital Contributions will be contributed,” that

provision is subject to the proviso “[e]xcept as otherwise provided herein,” which

would include the provisions in Section 5.2(l).

      It is undisputed that the other provisions required for a Deadlock to occur

under Sections 12.13 and 9.5 were fulfilled.

      AFFIRMED.

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