Court Opinion

ID: 5796844
Source: CourtListenerOpinion
Date Created: 2022-01-12 18:20:03.709343+00
Date Added: 2024-06-11T08:42:26.786232
License: Public Domain

Fisher, J.P. (concurring in part and dissenting in part).
A limited liability company may be judicially dissolved when the court, in the exercise of its discretion, finds that it is no longer reasonably practicable for the company to carry on its business in conformity with its articles of organization or operating agreement (see Matter of Extreme Wireless, 299 AD2d at 550; Limited Liability Company Law § 702). I have no serious quarrel with the standard the majority adopts based on its analysis of the authorities it cites. In my view, those authorities and the plain language of the statute suggest that, pursuant to Limited Liability Company Law § 702, it is “not reasonably practicable” for a limited liability company to carry on its business in conformity with its articles of organization or operating agreement when disagreement or conflict among the members regarding the means, methods, or finances of the company’s operations is so fundamental and intractable as to make it unfeasible for the company to carry on its business as originally intended.
Here, 1545 Ocean Avenue, LLC (hereinafter 1545 LLC), was formed to purchase a certain piece of property, to rehabilitate a building that stood on it, and to build a second building on the property for commercial rental. The majority recounts the growing disputes between the managers of 1545 LLC, John King and Walter Van Houten, which ultimately led to King’s withdrawal from management of 1545 LLC, amid claims, inter alia, that Van Houten had turned the project “into a construction job for [his] own company,” that he did work at excessive cost without King’s consent, that he violated the parties’ agreement that all construction work was to be procured through a competitive bidding process, that he submitted invoices billing 1545 LLC on a time-and-materials basis which King believed was unacceptable for a commercial project, and that Van Houten had refused *134to fulfill his responsibility to pay real estate taxes and vendors. Many of those allegations were disputed by Van Houten, but the Supreme Court made no findings of fact.
In my view, without a factual finding, we cannot meaningfully decide whether the Supreme Court providently exercised its discretion in finding that the actions of the parties rendered it not reasonably practicable for 1545 LLC to carry on its business in conformity with its articles of organization or operating agreement. Accordingly, I would remit the matter to the Supreme Court, Suffolk County, for a fact-finding hearing and thereafter for a new determination on the petition (cf. Business Corporation Law § 1109; Sobol v Les Pieds Nickels, 262 AD2d 194, 196 [1999]; Matter of Giordano v Stark, 229 AD2d 493, 494-495 [1996]).
Dillon and Miller, JJ., concur with Austin, J.; Fisher, J.P., concurs in part and dissents in part in a separate opinion in which Chambers, J., concurs.
Ordered that the order is reversed, on the facts and in the exercise of discretion, with costs, the petition is denied, and the proceeding is dismissed.