4 N.W.3d 203
N.D.2024Background
- Donavon Meuchel, a member of Red Trail Energy, LLC, sought information from the company regarding its bidding process for a project that his company unsuccessfully bid on.
- Meuchel based his request for information on his rights as a member under N.D.C.C. § 10-32.1-42.
- Red Trail refused, arguing the information was not material to Meuchel's rights or duties as a member and that disclosure would compromise future company bids.
- Meuchel filed suit seeking a court order for Red Trail to produce the information, and later filed a motion to compel discovery, which was denied.
- The district court held a bench trial focused solely on whether Red Trail had violated the statutory information rights and ultimately found for Red Trail, also awarding them attorney’s fees for successfully opposing Meuchel’s motion to compel.
- Meuchel appealed the denial of his information request and the attorney's fees award to the North Dakota Supreme Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Right to information under LLC statute | Information on bidding process is material to his rights as a member. | Information not material; bidding process managed by board, not members. | Meuchel failed to demonstrate materiality; request denied. |
| Reasonableness of information demand | Red Trail’s refusal was unreasonable; wanted oversight. | Disclosure could harm company; confidentiality is reasonable. | Refusal to provide info was reasonable; no violation. |
| Burden of proof for statutory right | CEO’s testimony shows Meuchel has relevant governance rights. | No evidence Meuchel had voting power or involvement in process. | Plaintiff’s burden not met; court credits Red Trail’s view. |
| Attorney's fees for motion to compel | Good faith attempts to resolve discovery; no need for call. | Plaintiff made only a demand, no real conferral effort. | Failure to confer in good faith; fees properly awarded. |
Key Cases Cited
- Larson v. Tonneson, 933 N.W.2d 84 (N.D. 2019) (sets standard for reviewing findings after a bench trial)
- Dronen v. Dronen, 764 N.W.2d 675 (N.D. 2009) (affirms district court’s role in weighing credibility)
- Edison v. Edison, 994 N.W.2d 151 (N.D. 2023) (clarifies clearly erroneous standard and deference to district court)
- PHI Fin. Servs. v. Johnston L. Off., P.C., 881 N.W.2d 216 (N.D. 2016) (details Rule 37 good faith requirement for discovery motions)
- Trosen v. Trosen, 982 N.W.2d 527 (N.D. 2022) (courts as experts in determining reasonable attorney’s fees)