Mark E. McDonough v. Patrick M. McDonough & a.
169 N.H. 537
N.H.2016Background
- In 1992 three brothers (Mark, Matthew, Patrick McDonough) formed TASC; converted it to an LLC in 1995.
- TASC’s certificate of formation lists a latest dissolution date of September 30, 2015; the operating agreement provides a 20-year term "unless sooner terminated or continued pursuant to the further terms of this Agreement."
- Mark sued seeking a declaration that TASC must dissolve by Sept. 30, 2015.
- On August 7, 2015, Matthew and Patrick (a majority of members) voted to dissolve and immediately voted to revoke that dissolution.
- The trial court denied Mark’s summary judgment and granted summary judgment to the defendants, holding the LLC could be continued by members under the operating agreement and the New Hampshire LLC Act. Mark appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TASC was required to dissolve on Sept. 30, 2015 | Section 5’s 20-year term mandates dissolution absent amendment; thus TASC must dissolve | Operating agreement and RSA ch. 304-C allow continuation/revocation; majority can continue LLC | Majority may continue LLC; not required to dissolve |
| Whether a revocation of dissolution requires unanimity | Revocation requires unanimous consent because statute used "members" without "majority" language | RSA 304-C:67 defaults unlabeled member decisions to majority vote; revocation not listed as unanimity matter | Revocation may be by majority vote under RSA 304-C:67 and RSA 304-C:130(III) |
| Whether the certificate of formation’s latest-dissolution date controls over operating agreement | Certificate’s latest date compels dissolution and cannot be overridden without amending certificate | Act looks to operating agreement for dissolution; certificate serves different purpose (public notice) | Operating agreement (not certificate) controls dissolution timing under RSA ch. 304-C; certificate not dispositive |
| Whether forcing Mark to stay in LLC is unfair because withdrawal yields no buyout | Withdrawal is inadequate remedy because operating agreement and RSA 304-C:105(II) leave dissociating member with no payment | Trial court noted statutory withdrawal exists; factual preservation lacking to challenge financial consequences on appeal | Court declined to reach merits — argument not preserved for appeal |
Key Cases Cited
- Conant v. O’Meara, 167 N.H. 644 (2015) (summary judgment standards and de novo review of legal questions)
- JMJ Properties, LLC v. Town of Auburn, 168 N.H. 127 (2015) (statutory interpretation principles)
- Lakes Region Gaming v. Miller, 164 N.H. 558 (2013) (operating agreements treated as contracts)
- Birch Broad. v. Capital Broad. Corp., 161 N.H. 192 (2010) (contract interpretation rules; plain meaning and ambiguity)
- Dukette v. Brazas, 166 N.H. 252 (2014) (appellant’s burden to show issue was preserved for appeal)
- LaMontagne Builders v. Bowman Brook Purchase Group, 150 N.H. 270 (2003) (reconsideration and preservation requirement)
- N.H. Dep’t of Corrections v. Butland, 147 N.H. 676 (2002) (preservation/reconsideration principles)
- Vogel v. Vogel, 137 N.H. 321 (1993) (appellate rule on not discussing issues that do not affect outcome)