AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• APS, a limited liability corporation formed in 1996, became a two-member operation by 2004, involving Stalker, P.C. and Haynes, P.C. In 2006, disputes arose over profit distribution, leading to Stalker, P.C.'s departure and the decision to dissolve APS. The distribution of assets, including accounts receivable and furniture, fixtures, and equipment, became the subject of the lawsuit. Stalker, P.C. alleged that Haynes, P.C. changed profit distributions to its benefit, leading to reduced payments to Stalker, P.C., and that Haynes, P.C. and APS transferred all assets to Eastern without Stalker, P.C.'s consent.

Procedural History

• [Not applicable or not found]

Parties' Submissions

• Plaintiff-Appellant (Stalker, P.C.): Argued that Haynes, P.C. breached the agreement on profit distribution, leading to reduced payments and unauthorized transfer of assets to Eastern. Sought judgment against both APS and Haynes, P.C. for breach of contract, damages, and injunctive relief.
• Defendants-Appellees (Haynes, P.C. and APS): Contended that Stalker, P.C. did not adequately plead the cause of action for breach of fiduciary duty and failed to raise the issue at trial. Argued that as non-managerial members of an LLC, they were not liable to the LLC or its members by their acts or omissions.

Legal Issues

• Whether Haynes, P.C. owed a fiduciary duty to Stalker, P.C. and breached that duty by interfering with the distribution of assets.
• Whether the district court erred in not awarding judgment against both APS and Haynes, P.C.
• Whether Stalker, P.C. is entitled to an award of attorney fees.

Disposition

• The Court of Appeals affirmed the district court's decision, finding that APS, but not Haynes, P.C., was liable to Stalker, P.C. for the disputed assets and denied the request for attorney fees.

Reasons

• The Court of Appeals, per Chief Judge Celia Foy Castillo, with Judges Roderick T. Kennedy and Michael E. Vigil concurring, held that Stalker, P.C. did not adequately plead or raise the issue of breach of fiduciary duty at trial. The court applied a de novo review due to the absence of district court findings on fiduciary duty, concluding that the issue was not properly raised during proceedings. The court also found that the district court did not err in its findings and conclusions regarding the liability of Haynes, P.C., as the evidence supported that only APS was liable to Stalker, P.C. for the distribution of assets. The court further held that the district court did not abuse its discretion in denying attorney fees, as no statute authorized the award and no evidence of fraud by Haynes, P.C. was presented.