Saunders v. Briner, 334 Conn. 135

Roger L. Saunders was the sole member and manager of Saunders Capital, LLC; he personally supplied funds that Saunders Capital used as a bridge loan (the LR Global bridge loan) to Revere Investments, LLC.
Saunders sued Clark Briner and Revere Capital, LLC, asserting direct claims (counts 4, 6, 9 and 10) for breach of fiduciary duty and breach of the implied covenant of good faith and fair dealing arising from that loan.
The majority opinion permitted Saunders to proceed with certain direct claims by adopting an exception to the general rule barring members from suing individually for harms to the LLC, grounded on ALI Principles §7.01(d) (the Watson v. Button approach).
Chief Justice Robinson (with Justices McDonald and Mullins) concurred in part and dissented in part: she joined the reversal of derivative claims (part I A) but dissented from part I B, arguing Saunders lacked standing to bring direct claims because any injury was to Saunders Capital, not Saunders personally.
Robinson emphasized that LLCs are statutory entities and argued that expanding standing for a single-member to sue directly departs from Connecticut statute and precedent (e.g., Padawer, Channing Real Estate) and risks gamesmanship and instability.
She urged that any change to allow a single-member exception should be legislative, and she cited authorities rejecting the ALI/Watson approach (e.g., Bagdon) and warned against a form of insider reverse veil-piercing.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a sole member of an LLC (Saunders) has standing to bring direct claims for harms that were allegedly suffered by the LLC	Saunders argued his personal provision of the funds and losses gave him an injury separate and distinct from Saunders Capital, permitting a direct action	Defendants argued the injury was to Saunders Capital (the LLC) and thus Saunders lacks standing; any claim must be derivative or brought by the LLC	The dissent would hold Saunders lacks standing because the injury belonged to Saunders Capital; the majority (in part I B) adopted an ALI/Watson-style single-member exception allowing the direct claims (Robinson dissents from that part)

Channing Real Estate, LLC v. Gates, 326 Conn. 123 (Conn. 2017) (LLC is a distinct entity; a member cannot recover individually for injury to the LLC)
Padawer v. Yur, 142 Conn. App. 812 (Conn. App. 2013) (sole LLC member lacks standing to sue for harms to the LLC)
Watson v. Button, 235 F.2d 235 (9th Cir. 1956) (origin of the closely held corporation exception allowing direct actions in narrow circumstances)
Bagdon v. Bridgestone/Firestone, Inc., 916 F.2d 379 (7th Cir. 1990) (refused to extend Watson/ALI exception under Delaware law)
Donahue v. Rodd Electrotype Co. of New England, Inc., 367 Mass. 578 (Mass. 1975) (close-corporation fiduciary duties resemble partnership duties; influenced ALI approach)
May v. Coffey, 291 Conn. 106 (Conn. 2009) (reaffirmed the direct-versus-derivative distinction and requirement of an injury separate and distinct from that of the corporation)