CRUMPTON v. VICK’S MOBILE HOMES, LLC Et Al.
335 Ga. App. 155
| Ga. Ct. App. | 2015Background
- Sharon and Raymond Crumpton are siblings who inherited a mobile home park and used two LLCs (Vick’s Mobile Homes, LLC and Crumpton Holdings, LLC) to hold and manage the property.
- The siblings have an acrimonious relationship; Sharon alleged Raymond mismanaged the park and sought court intervention to protect assets and residents.
- Sharon filed a “Petition for Equitable Relief, Accounting, and Dissolution” praying, among other things, for dissolution of the LLCs and equal distribution of assets.
- Raymond moved for judgment/partial summary judgment, arguing Sharon’s filing triggered OCGA § 14-11-601.1(b)(4)(D) and thus she had ceased to be a member, defeating her standing.
- The trial court granted partial summary judgment, concluding a member who files for dissolution "for the member" ceases to be a member.
- The Court of Appeals reversed, holding the trial court misapplied subsection (b)(4)(D); that provision applies when the member seeks relief for the member itself (or when a proceeding is against the member), not when a member sues to dissolve the LLC.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether filing a petition seeking dissolution of the LLC by a member causes that member to cease to be a member under OCGA § 14-11-601.1(b)(4)(D) | Sharon: Her petition sought dissolution of the LLCs (relief for the companies), so she remains a member and has standing. | Raymond: Sharon’s petition sought dissolution and similar relief; subsection (b)(4)(D) disassociates a member who files such a petition "for the member," so Sharon ceased to be a member when she filed. | Reversed: (b)(4)(D) applies when a member seeks reorganization/dissolution for the member itself (or when such a proceeding is against the member); it does not disassociate a member who files to dissolve the LLC. |
Key Cases Cited
- Sayers v. Artistic Kitchen Design, LLC, 280 Ga. App. 223 (Ga. Ct. App. 2006) (interpreting subsection (b)(4)(D) to disassociate only a member who seeks reorganization for himself, and not a member who seeks reorganization/dissolution of the LLC)
- Crouse v. Mineo, 189 N.C. App. 232 (N.C. Ct. App. 2008) (citing Sayers and holding a business-entity member who seeks dissolution for itself is disassociated, but a member who seeks dissolution of the LLC is not)