ÿWPCŸ ŸëpÚ¾vüÈìèH¿Vc×¾n§À+ݽ”pw"¯”T”ړ øÒü±¨šFFÙ´¸¸–cv;4p-H ›˜mx&l4táË_US䫉·„Ï"÷T†Y›mïVaOýݤà¦iIÛ_Ëæè-BˆŒG¹¬C¹å‘èp—_¥^rüîmc'üX—@,²—¦WŸvÿO>,·$TàJƒ²ðP ÈýZñXç^¿¹ýÈ0yúI9±·6Ï_TÅ3$ôy\0‹Ëò»«]€£ nbÕmP–nèÎb§n÷+UöýäL¢êþâr,fßæz SW|HSóXÒöñÃTz\ö•øý÷îýW˜¾ø¹&;À/=åZ\X»ût`÷dBôñŠ¦Q,õ³ú¨[,aDŸ~¨ãÈÞËD 仸¸hhþß›] B–)P€öž£)õÛ@ðÔêI\T!.ee7躅ši…4¿åhê=jx‹Õ ã aü›DŽ&ÅSYÜ‹ ÿÑý®¡‚bz5'íðµ;\˜üb#É\ %% ^ + 0ˆ7 UN¿ w 4 z% ÒŸ q € m‚ w™ ÆÆÖÆœÆb 0D(Nll"nEb’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’ 0ëšššš B…… 0¤¢ D5F D-{ 0K¨¨ ASóÆF 0¤  0D° A«ô˜\\IB01S08\KNOXCLERK4ÈÈ,,,,ÈÈ0»M„u/Ï (`£ª$¡¡Ñ€.ÑÑ8€½­»»d»»d8ÑÑ ý ÑÓ  Ó(í€"  Z6Times New Roman Regular=ƒ.ê:i¢×+00 ˜C:\PROGRA~1\COREL\WORDPE~1\TEMPLATE\CUSTOM~1\REVISE~1.WPTC:\Program Files\Corel\WordPerfect Office 2000\Template\Custom WP Templates\revised standard opinion.wpt3|xÿU‹ÿÀÀÀ mÝ ƒR¸œ$ÝÓ  Óà  àòòÚ  Ú1Ú  ÚóóÔ€ô·Uò»»ÔÝ  ÝÔ_ÔAnna€Stout€was€incorrectly€identified€in€the€complaint€as€ð ðSusan€Stout.ðð€€Lamarr€Stout,€her€husband,€statedÐ ° Ðin€his€deposition€that€his€wife€goes€by€the€nickname€Susie,€which€presumably€was€the€source€of€the€error.Level 1Level 2Level 3Level 4Level 5‚Level 1Level 2Level 3Level 4Level 5„Level 1Level 2Level 3Level 4Level 5…Level 1Level 2Level 3Level 4Level 5(#Ã$òòÚ  Ú0Ú  Úóó Wimberly COATenn.R.App.P.Goddard P.J.SwineyQuadeDee DeeLamarrDerreberry CBL OmerCarvell I]tNelmsT.C.A.LightfootHardawayTenn.Ct.AppA.L.R. LLCsW]henprincip[le]sTenn.App S.Ct L.EdMcCampbell S.W.Intertherm Rodd HCEofferorsZimmermans w]eFuturePointpretextualFreemansShockleysforeseeablyShockley- ù-(|G2¸œ$¤¤Ý ƒ£ª!ÝÑ€.ÑÑ8€ »»dd8ÑÑ ý ÑÓ  ÓÝ  Ýà  àòòÚ  Ú0Ú  ÚóóÔ€ô·Uò»»Ô d(|3Çc$££Ý ƒ£ª!ÝÑ€.ÑÑ8€ »»dd8ÑÑ ý ÑÓ  ÓÝ  ÝVVVV)ÿÿ!dxdx)!ÈÈÈÈdxdx( ±þ$’’ò òFigure€Ú  Ú1Ú  Úó ó^_X`YEþÿ<<CÿÿƒLevel 1Level 2Level 3Level 4Level 5(|3Çc$¢¢Ý ƒ£ª!ÝÑ€.ÑÑ8€ »»dd8ÑÑ ý ÑÓ  ÓÝ  Ý($$””ò òÚ  Ú1Ú  Úó óX[Z&OLE 2.0 Box <=8ÿÿÿÿÿÿÿÿÿÿCÿÿ HKKKKÝ ƒ£ª!ÝÑ€.ÑÑ8€ »»ddÈ8ÑÑ ý ÑÓ  ÓÝ  ÝÔ_ÔÑ  ÑÔ€¼ »»»ÔÑ8€^XXdì»»d8ÑÑ  Ñà@ü ü ìàÔ‡îœî»¼ ÔIN€THE€COURT€OF€APPEALS€OF€TENNESSEEˆÐ ° Ðà@WW$ìàAT€KNOXVILLEÔ#†¼ »îîœ #ԈРÖ& ÐÓ  ÓJuly€1,€2003€SessionÐ üL ÐÔ‡X^X»¼ ÔÌò òÔ#†¼ »XX^ñ#ÔÔ_ÔMELINDAÔ_Ô€ANDERSON,€òòet€al.óó€v.€BRETT€WILDER,€òòet€alóó.Ô‡X^X»¼ Ôó óÐ úJ ÐÌà@@½½ìàò ò€Appeal€from€the€Circuit€Court€for€Knox€CountyÐ ú J Ðà@@øøìàNo.€2„778„01€€€€€€Harold€Wimberly,€Jr.,€JudgeÐ æ 6 ÐÌFILED€NOVEMBER€21,€Ô_Ô2003Ô_ÔÐ ¾   Ðà@@ìì*ìàßA€V) °°` d€÷E<©` AßÐ ªú  ÐÌà@@TTìàNo.€E2003„00460„COA„R3„CVÐ ¥õ  ÐÌßA€V) °°` dE<|` AßÐ }Í  Ðó óÌÓ  Óà  àThis€case€involves€a€dispute€between€members€of€a€limited€liability€company€(ð ðLLCðð)Ð xÈ  Ðentitled€FuturePoint€Administrative€Services,€LLC.€€The€Plaintiffs€were€expelled€from€the€LLC€byÐ d´ Ða€vote€of€the€Defendants,€who€together€owned€53%€of€FuturePoint.€€The€Plaintiffs€received€a€buyoutÐ P  Ðprice€of€$150.00€per€ownership€unit€in€FuturePoint€after€they€were€expelled,€pursuant€to€theÐ <Œ Ðoperating€agreement€of€the€LLCÔ#†¼ »XX^“#ÔÔ‡X^X»¼ Ô.€€Shortly€after€the€expulsion,€the€Defendants€sold€499€ownershipÐ (x Ðunits,€amounting€to€a€49.9%€interest€in€the€LLC,€to€a€third€party€at€a€price€of€$250.00€per€ownershipÐ d Ðunit.€€Plaintiffs€filed€this€action,€alleging,€among€other€things,€that€the€Defendantsðð€actions€violatedÐ P Ðtheir€fiduciary€duty€and€duty€of€good€faith€to€Plaintiffs.€€Defendants€moved€for€summary€judgment,Ð ì< Ðarguing€that€their€actions€were€authorized€by€the€operating€agreement€and€that€they€acted€in€goodÐ Ø( Ðfaith€in€expelling€the€Plaintiffs.€€The€Trial€Court€granted€summary€judgment€in€Defendantsðð€favor.€Ð Ä ÐWe€vacate€the€order€of€summary€judgment€and€remand.Ô#†¼ »XX^ì#ÔÔ‡X^X»¼ ÔÐ ° ÐÓÈÓÌò òTenn.R.App.P.€3€Appeal€as€of€Right;€Judgment€of€the€Circuit€Court€Vacated;€Ð ˆØ ÐCause€Remandedó óÐ tÄ ÐÌòòÓ  ÓÔ#†¼ »àX^ #ÔÔ‡X^X.¼ ÔHouston€M.€Goddard,€P.J.óó,€delivered€the€opinion€of€the€court,€in€which€òòHerschel€P.€Franksóó€andÐ L œ ÐòòD.€Michael€Swiney,€JJ.óó,€joined.Ð 8!ˆ  ÐÌBrian€C.€Quist,€Knoxville,€for€the€Appellants,€Ô_ÔMelindaÔ_Ô€Anderson,€Alan€B.€Zimmerman,€Cherry€W.Ð #`" ÐZimmerman,€Charles€F.€Quade,€Janine€R.€Quade,€William€Thompson€&€Associates,€Inc.,€MichaelÐ ü#L# ÐA.€Atkins,€Sherry€Lynn€Turner,€and€Patrick€L.€MartinÐ è$8 $ ÐÌLewis€S.€Howard,€Jr.€and€Heather€R.€Gunn,€Knoxville,€for€the€Appellees,€Brett€Wilder,€Dee€DeeÐ À&"& ÐWilder,€Michael€E.€Cox,€Lamarr€Stout,€Anna€Stout,€Timothy€Welles,€Kelly€Welles,€Dennis€Freeman,Ð ¬'ü"' Ðand€Rhonda€ShockleyÐ ˜(è#( ÐÓë ÓÌò òOPINIONó óÔ#†¼ »XX^ #ÔÔ‡X^X»¼ ÔÐ p*À%* ÐÌòòóóÔ#†¼ »XX^‰#ÔÓ  ÓÔ€X^X»¼ Ôà  àFuturePoint€Administrative€Services,€LLC,€was€created€by€the€parties€on€or€about€JanuaryÐ H,˜', Ð1,€2000,€at€which€time€they€executed€the€operating€agreement€for€the€company.€€FuturePointÐ 4-„(-ý Ðcommenced€the€business€of€administering€third€party€medical€claims€in€early€2000.€€Ownership€ofÐ ° Ðthe€company€was€divided€into€ð ðownership€units.ðð€€One€ownership€unit€amounted€to€one„tenth€of€oneÐ œì Ðpercent€ownership€of€the€company.€€The€ownership€interest,€and€amount€of€capital€contributed€forÐ ˆØ Ðthe€startup€of€FuturePoint,€of€each€party€is€illustrated€in€the€following€chart:Ð tÄ ÐÌòòMember€Nameóóà0 ¸ àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#àòò€Ownership€Interest€óó€€€€€€€€òòCapital€ContributedóóÐL œÀ(#À(# ÐÌWilliam€Thompson€&€Associates,€€€€€€€à0 À à€€€€100€units€(10%)€€€€€€€€€€€€€€€€€€€€$15,000Ð$ tÀ(#À(# ÐInc.€(Plaintiff)à0 ` àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#à€Ð `h(#h(# ÐCharles€and€Janine€Quade€(Plaintiffs)à0 À à€€€€€100€units€(10%)€€€€€€€€€€€€€€€€€€€$15,000Ðü L À(#À(# ÐMichael€Atkins€and€Sherry€Turner€(Plaintiffs)€€€100€units€(10%)€€€€€€€€€€€€€€€€€€€$15,000€€€€€€€Ð è 8  ÐPatrick€L.€Martin€(Plaintiff)à0  àà0h(#(#àà0Àh(#h(#à€€€€€100€units€(10%)€€€€€€€€€€€€€€€€€€€$15,000ÐÔ$ À(#À(# ÐAlan€and€Cherry€Zimmerman€(Plaintiffs)€€€€€€€€€€€€€40€units€(4%)€€€€€€€€€€€€€€€€€€€€€€$€6,000Ð À  ÐÔ_ÔMelindaÔ_Ô€Anderson€(Plaintiff)€à0 h àà0Àh(#h(#à€€€€€€€30€units€(3%)€€€€€€€€€€€€€€€€€€€€€€$€4,500Ьü À(#À(# ÐÌBrett€and€Dee€Dee€Wilder€(Defendants)€€€€€€€€€€€€€200€units€(20%)€€€€€€€€€€€€€€€€€€€€€€€€€„0„Ð „Ô  ÐMichael€E.€Cox€(Defendant)à0  àà0h(#(#àà0Àh(#h(#à€€€€€100€units€(10%)€€€€€€€€€€€€€€€€€€€€$15,000ÐpÀÀ(#À(# ÐLamar€and€Anna׃ ×Ý ƒ#ÃÝòòÚ  Ú1Ú  ÚóóÝ  Ý×  ×€Stout€(Defendants)€à0 À à€€€€€100€units€(10%)€€€€€€€€€€€€€€€€€€€€$15,000Ð\¬À(#À(# ÐTimothy€and€Kelly€Welles€(Defendants)€€€€€€€€€€€€100€units€(10%)à0 È àà0 È(#È(#à€€€$15,000ÐH˜ (# (# ÐDennis€Freeman€and€Rhonda€Shockley€€€€€€€€€€€€€€€€30€units€(3%)€€€€€€€€€€€€€€€€€€€€€€€$€4,500Ð 4„ Ð(Defendants)€Ð  p ÐÌAs€can€be€seen€from€the€chart,€each€member€contributed€$150.00€per€ownership€unit,€with€theÐ øH Ðexception€of€Defendants€Brett€and€Dee€Dee€Wilder.€€Ð ä4 ÐÌà  àThe€parties€set€up€FuturePoint€as€a€member„managed€LLC.€€€The€operating€agreementÐ ¼  Ðprovides€for€a€management€committee€ð ðto€oversee€and€manage€the€business€operations€of€theÐ ¨ø ÐCompany.ðð€€The€operating€agreement€gives€the€management€committee€the€power€and€authority€toÐ ”ä Ðcontract€on€behalf€of€the€company€by€a€majority€vote.€€FuturePointððs€management€committee€wasÐ €Ð Ðcomprised€of€Plaintiffs€Michael€Atkins,€Charles€Quade,€and€Bill€Thompson,€and€Defendants€LamarrÐ l¼ ÐStout€and€Brett€Wilder.€€Ð X ¨ ÐÌà  àOn€September€10,€2001,€a€membersðð€meeting€took€place€at€the€FuturePoint€offices,€at€whichÐ 0"€  Ðtwo€offers€to€purchase€ownership€units€were€discussed.€€Each€offer€was€at€a€price€of€$250.00€perÐ #l! Ðownership€unit.€€At€this€time,€FuturePoint€had€generated€an€amount€of€excess€cash€on€hand€in€theÐ $X" Ðamount€of€$63,000.00.€€Ð ô$D # ÐÌà  àOn€September€14,€2001,€the€following€actions€were€taken€by€the€Defendants,€as€shown€byÐ Ì&"% Ða€document€styled€ð ðActions€taken€by€written€consent€of€the€members€of€FuturePoint€AdministrativeÐ ¸'#& ÐServices,€LLCðð:Ð ¤(ô#' Ðà8  àà8` Ð Ð àIn€lieu€of€a€meeting€of€the€Members€of€FuturePoint€AdministrativeÐ ° ÐServices,€LLC€(the€ð ðCompanyðð),€a€Tennessee€limited€liabilityÐ œì Ðcompany,€in€accordance€with€the€provisions€of€Section€48„233„101Ð ˆØ Ðof€the€Tennessee€Limited€Liability€Company€Act€and€Article€8.10€ofÐ tÄ Ðthe€Operating€Agreement€of€the€Company,€Members€holding€aÐ `° Ðmajority€of€Units€and€who€own€Governance€Rights€with€voting€powerÐ L œ Ðequal€to€the€voting€power€that€would€be€required€to€take€the€sameÐ 8 ˆ Ðaction€at€a€meeting€of€the€Members€at€which€all€Members€are€presentÐ $ t Ðhereby€take€the€following€actions:Ð `` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àThe€following€Resolutions€are€hereby€adopted€by€vote€of€theÐ è 8  Ðaforesaid€Members:ÐÔ$ ` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àRESOLVED,€pursuant€to€Article€13.6€of€the€Operating€Agreement€ofÐ ¬ü  Ðthe€Company,€the€following€Members€are€hereby€expelled€from€theÐ ˜è  ÐCompany€effective€as€of€the€date€hereof:Ð„Ô ` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àWilliam€Thompson€&€Associates,€Inc.Ð\¬` x` x Ðà8  àà8` Ð Ð àMike€A.€Atkins€and/or€Sherry€Lynn€TurnerÐH˜` x` x Ðà8  àà8` Ð Ð àPatrick€L.€Martin€and/or€Deborah€N.€MartinÐ4„` x` x Ðà8  àà8` Ð Ð àCharles€F.€Quade€and/or€Janine€R.€QuadeÐ p` x` x Ðà8  àà8` Ð Ð àÔ_ÔMelindaÔ_Ô€Anderson€and/or€Adam€&€William€DerreberryÐ \` x` x Ðà8  àà8` Ð Ð àAlan€Zimmerman€and/or€Cherry€W.€ZimmermanÐøH` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àRESOLVED€FURTHER,€pursuant€to€Article€XVII€of€the€OperatingÐ Ð  ÐAgreement€of€the€Company,€the€Operating€Agreement€is€herebyÐ ¼  Ðamended€to€delete€in€its€entirety,€Article€IX€and€the€ManagementÐ ¨ø ÐCommittee€created€thereunder;€such€functions€previously€conductedÐ ”ä Ðby€the€Management€Committee€to€be€hereafter€conducted€by€theÐ €Ð ÐChief€Manager,€Brett€Wilder.€Ðl¼` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àRESOLVED€FURTHER,€pursuant€to€Article€X€of€the€OperatingÐ D!” ÐAgreement,€Charles€F.€Quade€is€hereby€removed€as€Secretary€of€theÐ 0"€  ÐCompany€and€Lamarr€Stout€is€hereby€elected€as€Secretary€of€theÐ #l! ÐCompany.€Ð$X"` x` x ÐÌà  àPursuant€to€the€terms€of€the€operating€agreement,€the€remaining€members€of€the€companyÐ à%0!$ Ðbought€the€ownership€interests€of€the€expelled€members€at€a€price€of€$150.00€per€membership€unit.€Ð Ì&"% ÐOn€October€11,€2001,€the€remaining€members€of€FuturePoint€sold€a€total€of€499€membership€unitsÐ ¸'#& Ðto€a€Don€Allen€at€a€price€of€$250.00€per€unit.€€Ð ¤(ô#' ÐÌà  àThe€Plaintiffs€brought€this€action€on€December€17,€2001,€alleging€breach€of€fiduciary€dutyÐ |*Ì%) Ðand€breach€of€the€statutory€and€common€law€duty€of€good€faith€and€fair€dealing.€€Defendants€movedÐ h+¸&* Ðfor€summary€judgment,€arguing€that€their€actions€were€expressly€permitted€under€the€operatingÐ ° Ðagreement,€and€that€they€acted€in€good€faith€in€expelling€the€Plaintiffs.€€Specifically,€DefendantsÐ œì Ðrelied€upon€the€following€provision€of€the€operating€agreement:Ð ˆØ ÐÌà8  àà8` Ð Ð à13.6€€€òòExpulsion€of€a€Member.€óó€The€Company€may€expel€a€Member,Ð `° Ðwith€or€without€cause,€from€the€Company€upon€a€vote€or€writtenÐ L œ Ðconsent€of€the€Members€who€hold€a€majority€of€Units.€€In€the€eventÐ 8 ˆ Ðof€a€Memberððs€expulsion,€the€remaining€Members€shall€be€obligatedÐ $ t Ðto€purchase€the€expelled€Memberððs€Financial€Rights€at€the€AgreedÐ  ` ÐPrice€and€on€the€Agreed€Terms€within€thirty€(30)€days€of€suchÐ ü L  Ðexpulsion.€€The€remaining€Members€shall€purchase€the€expelledÐ è 8  ÐMemberððs€Financial€Rights€in€proportion€to€their€Financial€RightsÐ Ô$  Ð(excluding€the€Offered€Financial€Rights),€or€in€such€other€proportionÐ À  Ðas€they€may€agree.€€Ð¬ü ` x` x ÐÌThe€Trial€Court€granted€the€Defendants€summary€judgment,€finding€only€that€ð ðno€genuine€issues€ofÐ „Ô  Ðmaterial€fact€exist€for€adjudication€and€the€Defendants€are€entitled€to€summary€judgment€as€a€matterÐ pÀ Ðof€law.ðð€€Plaintiffs€have€appealed€this€ruling,€raising€the€issue,€which€we€restate,€of€whether€the€TrialÐ \¬ ÐCourt€erred€in€granting€summary€judgment.€Ð H˜ ÐÌà  àIn€òòStaples€v.€CBL€&€Associates,€Inc.óó,€15€S.W.3d€83,€89€(Tenn.€2000)€the€Tennessee€SupremeÐ  p ÐCourt€stated€the€following€as€to€the€standard€of€review€specifically€applicable€to€summaryÐ  \ Ðjudgments:Ð øH ÐÌà8  àà8` Ð Ð àThe€standards€governing€the€assessment€of€evidence€in€the€summaryÐ Ð  Ðjudgment€context€are€also€well€established.€€Courts€must€view€theÐ ¼  Ðevidence€in€the€light€most€favorable€to€the€nonmoving€party€and€mustÐ ¨ø Ðalso€draw€all€reasonable€inferences€in€the€nonmoving€partyððs€favor.€Ð ”ä ÐòòSeeóó€òòRobinson€v.€Omeróó,€952€S.W.2d€at€426;€òòByrd€v.€Hallóó,€847€S.W.2dÐ €Ð Ðat€210„11.€€Courts€should€grant€a€summary€judgment€only€when€bothÐ l¼ Ðthe€facts€and€the€inferences€to€be€drawn€from€the€facts€permit€aÐ X ¨ Ðreasonable€person€to€reach€only€one€conclusion.€€òòSeeóó€òòMcCall€v.Ð D!” ÐWilderóó,€913€S.W.2d€150,€153€(Tenn.€1995);€òòCarvell€v.€Bottomsóó,€900Ð 0"€  ÐS.W.2d€23,€26€(Tenn.€1995).Ð#l!` x` x Ðà  àà ` àÌà  àWe€begin€with€the€Plaintiffsðð€assertion€that€the€majority€shareholders€in€a€member„managed,Ð ô$D # Ðclosely„held€LLC€stand€in€a€fiduciary€relationship€to€the€minority€shareholders,€such€as€Plaintiffs€inÐ à%0!$ Ðthis€case.€€We€quote€from€Plaintiffsðð€brief€as€follows€in€summarizing€their€argument€in€this€regard:€Ð Ì&"% ÐÌà8  àà8` Ð Ð à[I]t€is€well€settled€in€Tennessee€that€the€majority€shareholders€of€aÐ ¤(ô#' Ðcorporation€owe€a€fiduciary€duty€to€the€minority€shareholders.€€òòNelsonÐ )à$( Ðv.€Martinóó,€958€S.W.2d€643,€647€(Tenn.1997);€òòMike€v.€Po€Group,€Incóó.,Ð |*Ì%) Ð937€S.W.2d€790,€793€(Tenn.1996);€òòNelms€v.€Weaveróó,€681€S.W.2dÐ h+¸&* Ð547,€549€(Tenn.1984);€òòDale€v.€Thomas€H.€Temple€Co.óó,€208€S.W.2dÐ ° Ð344,€352€(Tenn.1948).€€While€corporations€areà8@ê` x` xà€ð ðfictionalðð€entities€created€by€statute,€the€fiduciary€duty€of€the€majority€shareholders€to€the€minorityÐ œì Ðis€a€matter€of€common€law.€€The€Tennessee€Business€Corporation€Act€at€T.C.A.€ðð€48„11„101€et€seq.Ð ˆØ Ðmentions€nothing€about€any€fiduciary€duty€owed€by€majority€shareholders€to€minority€shareholders.€Ð tÄ ÐAccordingly,€why€should€the€majority€members€of€a€member„managed€limited€liability€company€notÐ `° Ðowe€the€same€fiduciary€duty€to€the€minority?€€They€should.€€There€is€no€reason€to€distinguish€the€twoÐ L œ Ðforms€of€business€enterprise.€Indeed,€member„managed€limited€liability€companies€are€governedÐ 8 ˆ Ðmore€like€partnerships€than€conventional€corporations.€€Since€it€is€also€well€established€as€aÐ $ t Ðfundamental€rule€of€partnerships,€that€òòallóó€partners,€not€just€the€majority,€owe€each€other€fiduciaryÐ  ` Ðduties€(òòLightfoot€v.€Hardawayóó,€751€S.W.2d€844,€849€(Tenn.Ct.App.1988)),€it€logically€follows€thatÐ ü L  Ða€majority€of€the€members€of€an€ð ðLLCðð€should€owe€a€fiduciary€duty€to€the€minority€members€justÐ è 8  Ðlike€the€duty€a€majority€of€the€shareholders€of€an€ð ðInc.ðð€owe€the€minority€shareholders.€€Ð Ô$  ÐÌà  àAn€analysis€of€the€nature€and€history€of€the€limited€liability€company€is€helpful€in€addressingÐ ¬ü  Ðthis€fiduciary€duty€question.€€The€LLC€is€a€relatively€new€form€of€business€entity,€a€hybrid€whichÐ ˜è  Ðð ðincorporates€certain€beneficial€aspects€of€a€partnership€with€certain€beneficial€aspects€of€aÐ „Ô  Ðcorporation.ðð€€Annotation,€òòConstruction€and€Application€of€Limited€Liability€Company€Actsóó,€79Ð pÀ ÐA.L.R.5th€689.€€This€A.L.R.€annotation€contains€the€following€helpful€observations:Ð \¬ ÐÌà8  àà8` Ð Ð àIt€is€important€to€keep€the€history€of€LLC€development€in€perspectiveÐ 4„ Ðwhen€working€with€LLCs€and€court€interpretations€of€LLC€acts.Ð p` x` x Ðà8  àà8` Ð Ð à.€.€.€The€typical€LLC€act€is€usually€a€hybrid€of€provisions€culled€fromÐ  \ Ðthe€individual€stateððs€partnership€statutes€and€business€corporationÐ øH Ðlaw.Ðä4` x` x Ðà8  àà8` Ð Ð àà ¸ àà  à*à0h` x` xàà0Àhxhxà*à0ÀxÀxàà0pxxà*ÐÐ pxpx Ðà8  àà8` Ð Ð à[W]hen€a€court€is€interpreting€an€LLC€act€or€agreement,€the€court€willÐ ¼  Ðfocus€on€the€particular€aspect€of€the€LLC€that€gives€rise€to€theÐ ¨ø Ðproblem,€with€emphasis€on€the€foundational€business€form€fromÐ ”ä Ðwhich€that€characteristic€originated.€€Usually,€the€particular€aspect€canÐ €Ð Ðbe€traced€to€either€the€corporate€components€or€the€partnershipÐ l¼ Ðcomponents€of€the€LLC€act€or€agreement.€€In€such€cases€where€theÐ X ¨ Ðcharacteristic€originated€from€the€partnership€aspects€of€the€LLC,€theÐ D!” Ðcourt€will€use€the€established€princip[le]s€and€precedent€of€theÐ 0"€  Ðpartnership€law€to€resolve€the€issue.€.€.In€such€cases€where€theÐ #l! Ðcharacteristic€originated€from€the€corporate€aspects€of€the€LLC,€theÐ $X" Ðcourt€will€utilize€the€established€princip[le]s€and€precedent€ofÐ ô$D # Ðcorporate€law€to€resolve€the€issue.Ðà%0!$` x` x ÐÌ79€A.L.R.5th€at€page€698.€€Ð ¸'#& ÐÌà  àIt€is€well„recognized€that€a€fiduciary€relationship€exists€between€members€of€either€aÐ )à$( Ðâ âpartnership€or€a€closely„held€corporation€under€established€principles€of€both€partnership€law€andÐ |*Ì%) Ðcorporate€law.€€In€òòLightfoot€v.€Hardawayóó,€751€S.W.2d€844€(Tenn.App.1988),€the€court€stated€asÐ ° Ðfollows€regarding€business€partnerships:Ð œì Ðâ âÌà8  àà8` Ð Ð àThe€fundamental€rule€that€the€relationship€of€partners€is€fiduciary€andÐ tÄ Ðimposes€on€them€the€obligation€of€the€utmost€good€faith€and€integrityÐ `° Ðin€their€dealings€with€one€another€with€respect€to€partnership€affairsÐ L œ Ðis€universally€recognized€in€the€modern€cases€and€is€reinforced€by€theÐ 8 ˆ ÐUniform€Partnership€Act....€€Also€well€established€is€the€applicabilityÐ $ t Ðof€this€fiduciary€duty€on€the€sale€of€one€partner's€interest€to€anotherÐ  ` Ðpartner,€the€courts€often€characterizing€the€duty€as€being€"particularly"Ð ü L  Ðor€"especially"€applicable€to€this€situation.€€Although€it€is€no€longerÐ è 8  Ðdisputed,€at€least€in€theory,€that€such€a€sale€will€be€sustained€onlyÐ Ô$  Ðwhen€it€is€made€in€good€faith,€for€a€fair€consideration,€and€on€a€fullÐ À  Ðand€complete€disclosure€of€all€important€information€as€to€value,€theÐ ¬ü  Ðrule's€application€is€by€no€means€as€clear€and€simple€as€its€statement;€Ð ˜è  Ðand€the€specific€content€of€such€terms€as€"good",€"fair",€"full",€andÐ „Ô  Ð"important"€can€be€known€only€by€relating€the€particular€conduct€andÐ pÀ Ðcircumstances€of€the€parties€to€the€results€reached€in€the€cases.€€Ð\¬` x` x ÐÌòòLightfootóó,€751€S.W.2d€at€849€(quoting€4€A.L.R.4th€at€page€1128„29).€€The€General€Assembly€hasÐ 4„ Ðclarified€the€duties€owed€by€partners€by€passage€in€2001€of€T.C.A.€61„1„404,€which€provides€inÐ  p Ðrelevant€part€as€follows:Ð  \ ÐÌà8  àà8` Ð Ð à(a)€The€only€fiduciary€duties€a€partner€owes€to€the€partnership€and€theÐ ä4 Ðother€partners€are€the€duty€of€loyalty€and€the€duty€of€care€set€forth€inÐ Ð  Ðsubsections€(b)€and€(c).м ` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð à(b)€A€partner's€duty€of€loyalty€to€the€partnership€and€the€other€partnersÐ ”ä Ðis€limited€to€the€following:ЀÐ` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð à(1)€To€account€to€the€partnership€and€hold€as€trustee€for€it€anyÐ X ¨ Ðproperty,€profit,€or€benefit€derived€by€the€partner€in€the€conduct€andÐ D!” Ðwinding€up€of€the€partnership€business€or€derived€from€a€use€by€theÐ 0"€  Ðpartner€of€partnership€property,€including€the€appropriation€of€aÐ #l! Ðpartnership€opportunity;Ð$X"` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð à(2)€To€refrain€from€dealing€with€the€partnership€in€the€conduct€orÐ à%0!$ Ðwinding€up€of€the€partnership€business€as€or€on€behalf€of€a€partyÐ Ì&"% Ðhaving€an€interest€adverse€to€the€partnership;€€andи'#&` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð à(3)€To€refrain€from€competing€with€the€partnership€in€the€conduct€ofÐ )à$( Ðthe€partnership€business€before€the€dissolution€of€the€partnership.Ð|*Ì%)` x` x Ðà  àà ` àà ¸ àà  à*à0 h àà0Àh(#h(#à*à0À(#À(#àà0p(#(#à*Ðh+¸&*p(#p(# Ðà8  àà8` Ð Ð à(d)€A€partner€shall€discharge€the€duties€to€the€partnership€and€theÐ ° Ðother€partners€under€this€act€or€under€the€partnership€agreement€andÐ œì Ðexercise€any€rights€consistently€with€the€obligation€of€good€faith€andÐ ˆØ Ðfair€dealing.ÐtÄ` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð à(e)€A€partner€does€not€violate€a€duty€or€obligation€under€this€act€orÐ L œ Ðunder€the€partnership€agreement€merely€because€the€partner's€conductÐ 8 ˆ Ðfurthers€the€partner's€own€interest.Ð$ t` x` x Ðà8  à€Ð Ð Ð  ÐÌà  àThe€Supreme€Court€has€provided€the€following€guidance€as€regards€members€of€corporateÐ è 8  Ðassociations:Ð Ô$  ÐÌà8  àà8` Ð Ð àThis€Court€has€stated€that€majority€shareholders€owe€a€fiduciary€dutyÐ ¬ü  Ðto€minority€shareholders.€€òòMike€v.€Po€Group,€Inc.óó,€937€S.W.2d€790,Ð ˜è  Ð793€(Tenn.1996);€€òòNelms€v.€Weaveróó,€681€S.W.2d€547,€549Ð „Ô  Ð(Tenn.1984),€òòcert.€deniedóó,€476€U.S.€1118,€106€S.Ct.€1976,€90€L.Ed.2dÐ pÀ Ð660€(1986);€òòDale€v.€Thomas€H.€Temple€Co.óó,€186€Tenn.€69,€208Ð \¬ ÐS.W.2d€344,€352€(1948).€€The€Court€of€Appeals€stated€in€òòJohns€v.Ð H˜ ÐCaldwellóó,€601€S.W.2d€37€(Tenn.App.1980),€"Our€courts€are€promptÐ 4„ Ðto€redress€the€injuries€to€minority€stockholders€caused€by€theÐ  p Ðwrongdoings€of€majority€stockholders."€òòId.€óóat€41€(citing€òòMcCampbellÐ  \ Ðv.€Fountain€Head€Railroad€Co.óó,€111€Tenn.€55,€77€S.W.€1070€(1903)).€Ð øH Ѐ€€€€€€€€€€€€€€€€€€€€€€€€*à h àà À à*à  àà p à*Ðä4` x` x Ðà8  àà8` Ð Ð àIn€òòIntertherm€v.€Olympic€Homes€Systemsóó,€569€S.W.2d€467Ð Ð  Ð(Tenn.App.1978),€the€court€noted€that€the€transactions€of€majority€orÐ ¼  Ðdominant€shareholders€will€be€closely€scrutinized€for€good€faith€andÐ ¨ø Ðfairness€if€challenged.€€The€court€stated€that€it€would€"apply€the€ruleÐ ”ä Ðof€close€scrutiny€and€place€the€burden€on€the€shareholder€to€justify€aÐ €Ð Ðtransaction€with€his€corporation€only€when€the€shareholder€owns€aÐ l¼ Ðmajority€of€stock,€or€is€shown€to€dominate€or€control€the€corporationÐ X ¨ Ðto€a€significant€degree€in€some€other€way."€€òòId.óó€at€472.€€€€à8@` x` xàÐ D!” Ðà  àà ` à*à0 ¸ àà0¸ (#¸ (#à*à0h(#(#àà0Àh(#h(#à*Ð0"€ À(#À(# Ðà8  àà8` Ð Ð àThe€Court€has€not€addressed€specifically€the€issues€presented€in€thisÐ #l! Ðcase,€the€relationship€between€shareholders€in€a€close€corporationÐ $X" Ðwhere€there€is€no€majority€or€dominant€shareholder€and€the€disputeÐ ô$D # Ðrelates€to€the€shareholders'€interests€as€shareholders.€€The€Court€ofÐ à%0!$ ÐAppeals€relied€upon€the€decision€in€òòWilkes€v.€Springside€NursingÐ Ì&"% ÐHome,€Inc.óó,€370€Mass.€842,€353€N.E.2d€657€(1976),€in€which€theÐ ¸'#& ÐMassachusetts€court€held€there€is€a€fiduciary€relationship€betweenÐ ¤(ô#' Ðshareholders€of€a€close€corporation.€€In€òòWilkesóó,€the€Court€stated€thatÐ )à$( Ð"stockholders€in€the€close€corporation€owe€one€another€substantiallyÐ |*Ì%) Ðthe€same€fiduciary€duty€in€the€operation€of€the€enterprise€that€partnersÐ h+¸&* Ðowe€to€one€another."€€òòId.€óó353€N.E.2d€at€661€(quoting€òòDonahue€v.Ð ° ÐRodd€Electrotype€Co.óó,€367€Mass.€578,€328€N.E.2d€505,€515€(1975)).€Ð œì ÐThat€standard€of€duty€is€one€of€"utmost€good€faith€and€loyalty."€€€ÐˆØ` x` x Ðà  àà ` àà ¸ àà  à*à0 h àà0Àh(#h(#à*à0À(#À(#àà0p(#(#à*ÐtÄp(#p(# Ðà8  àà8` Ð Ð àBased€on€these€principles,€[defendants]€Martin€and€Gammon,Ð `° Ðtogether€and€separately,€were€obligated€to€deal€fairly€and€honestlyÐ L œ Ðwith€[plaintiff]€Nelson€and€could€not€act€out€of€avarice,€malice,€orÐ 8 ˆ Ðself-interest€in€violation€of€their€fiduciary€duty€to€him€as€aÐ $ t Ðshareholder.Ð `` x` x ÐÌ€òòNelson€v.€Martinóó,€958€S.W.2d€643,€647„49€(Tenn.1997),€òòoverruled€in€part€on€other€grounds€óóbyÐ è 8  ÐòòÔ_ÔTrauÔ_Ô„Med€of€America,€Inc.€v.€Allstate€Ins.€Co.,€óó71€S.W.3d€692€(Tenn.2002).Ð Ô$  ÐÌà  àDefendants€in€the€present€case€argue€that€an€LLC€is€a€ð ðcreature€of€statuteðð€and€because€theÐ ¬ü  ÐLLC€Act,€found€at€T.C.A.€48„201„101€òòet€seq.óó,€does€not€specifically€prescribe€a€fiduciary€duty€of€Ð ˜è  Ðmajority€shareholders€to€a€minority,€this€Court€should€not€recognize€such€a€duty.€€Defendants€citeÐ „Ô  Ðthe€case€of€òòMcGee€v.€Bestóó,€106€S.W.3d€48€(Tenn.App.2002)€in€support€of€their€argument.€TheÐ pÀ ÐòòMcGeeóó€court€stated€as€follows€regarding€the€LLC€Act:Ð \¬ ÐÌà8  àà8` Ð Ð àThe€statute€in€question€defines€the€fiduciary€duty€of€members€of€aÐ 4„ Ðmember„managed€LLC€as€one€owing€to€the€LLC,€not€to€individualÐ  p Ðmembers.€€We€cannot€contravene€the€intent€of€the€Legislature.Ð \` x` x ÐÌMcGee,€106€S.W.3d€at€64.€€The€òòMcGeeóó€case€was€in€essence€an€employment€dispute€and€did€notÐ ä4 Ðinvolve€an€allegation€of€oppression€by€a€majority€shareholder€group.€€The€òòMcGee€óóCourt€noted€thatÐ Ð  Ðð ðthis€case€boils€down€to€a€rather€uncomplicated€dispute€controlled€by€the€employment€contract€andÐ ¼  Ðthe€Operating€Agreement.€.€.The€only€issue€involved€is€whether€termination€of€the€employment€wasÐ ¨ø Ðfor€cause.ðð€òòMcGeeóó,€106€S.W.3d€at€67.Ð ”ä ÐÌà  àThe€statute€at€issue€here€is€T.C.A.€48„240„102,€and€it€provides€in€pertinent€part€as€follows:Ð l¼ ÐÌà8  àà8` Ð Ð à(a)€òòFIDUCIARY€€DUTY€OF€MEMBERS€OF€MEMBER-MANAGEDÐ D!” ÐLLC.€óó€Except€as€provided€in€the€articles€or€operating€agreement,€everyÐ 0"€  Ðmember€of€a€member„managed€LLC€must€account€to€the€LLC€for€anyÐ #l! Ðbenefit,€and€hold€as€trustee€for€it€any€profits€derived€by€the€memberÐ $X" Ðwithout€the€consent€of€the€other€members€from€any€transactionÐ ô$D # Ðconnected€with€the€formation,€conduct,€or€liquidation€of€the€LLC€orÐ à%0!$ Ðfrom€any€use€by€the€member€of€its€property€including,€but€not€limitedÐ Ì&"% Ðto,€confidential€or€proprietary€information€of€the€LLC€or€other€mattersÐ ¸'#& Ðentrusted€to€the€member€as€a€result€of€such€person's€status€as€aÐ ¤(ô#' Ðmember.Ð)à$(` x` x Ðâ âÐ |*Ì%) Ðà8  àà8` Ð Ð à(b)€STANDARD€OF€CONDUCT.€€A€member€of€a€member-managedÐ ° Ðâ âLLC€shall€discharge€such€member's€duties€as€a€member,€including€allÐ œì Ðduties€as€a€member€of€a€committee:ЈØ` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð à(1)€In€good€faith;Ð`°` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð à(2)€With€the€care€an€ordinarily€prudent€person€in€a€like€position€wouldÐ 8 ˆ Ðexercise€under€similar€circumstances;€€andÐ$ t` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð à(3)€In€a€manner€the€member€reasonably€believes€to€be€in€the€bestÐ ü L  Ðinterest€of€the€LLC.Ðè 8 ` x` x ÐÌà  àPursuant€to€the€above€analysis,€we€are€of€the€opinion€that€finding€a€majority€shareholder€ofÐ À  Ðan€LLC€stands€in€a€fiduciary€relationship€to€the€minority,€similar€to€the€Supreme€Courtððs€teachingÐ ¬ü  Ðin€òòNelsonóó€regarding€a€corporation,€is€warranted€in€this€case.€Such€a€holding€does€not€conflict€withÐ ˜è  Ðthe€statute,€and€is€in€keeping€with€the€statutory€requirement€that€each€LLC€member€discharge€all€ofÐ „Ô  Ðhis€or€her€duties€in€good€faith.€€Ð pÀ ÐÌà  àWe€now€turn€to€the€question€of€whether€Defendantsðð€actions,€viewed€in€the€light€mostÐ H˜ Ðfavorable€to€Plaintiffs€under€our€summary€judgment€standard,€could€reasonably€be€said€to€haveÐ 4„ Ðviolated€their€fiduciary€duty€of€dealing€fairly€and€honestly€with€the€minority€Plaintiffs,€and€actingÐ  p Ðin€good€faith€toward€them.€€Ð  \ ÐÌà  àIn€support€of€their€motion€for€summary€judgment,€Defendants€Mr.€Wilder,€Mr.€Cox,€Mr.Ð ä4 ÐStout,€Mr.€Freeman,€Mr.€Welles,€and€Ms.€Shockley€each€filed€an€affidavit,€identical€in€every€aspect,Ð Ð  Ðwhich€alleged€as€follows:Ð ¼  ÐÌà8  àà8` Ð Ð àPrior€to€the€vote€being€taken€to€expel€Plaintiff€members,€I€was€awareÐ ”ä Ðthat€the€Plaintiff€members€of€the€management€committee€wereÐ €Ð Ðplanning€to€vote€to€distribute€the€remaining€cash€of€the€company,Ð l¼ Ðapproximately€$60,000,€to€the€members,€including€themselves.€€I€didÐ X ¨ Ðnot€believe€this€would€be€beneficial€to€the€company€as€it€would€notÐ D!” Ðallow€the€company€to€meet€payroll€and€other€financial€obligations,Ð 0"€  Ðwithout€most,€if€not€all,€of€the€members€agreeing€to€loan€that€moneyÐ #l! Ðback€to€the€company.€€Ð$X"` x` x ÐÌà  àAs€noted€above,€the€members€of€FuturePoint€met€on€September€10,€2001,€to€discuss€twoÐ à%0!$ Ðdistinct€offers€to€purchase€ownership€units€in€the€company,€one€from€Healthcare€Economics€Group,Ð Ì&"% ÐLLC,€and€one€from€Don€Allen,€who€eventually€purchased€499€ownership€units.€€Plaintiff€Mr.€AtkinsÐ ¸'#& Ðfiled€an€affidavit€stating€in€relevant€part€as€follows:Ð ¤(ô#' ÐÌà8  àà8` Ð Ð àMy€position€on€the€subject€of€FuturePointððs€cash€in€the€bank€had€toÐ |*Ì%) Ðdo€with€the€general€offer€from€Health€Care€Economics€(HCE)€toÐ h+¸&* Ðpurchase€interests€in€the€company€that€was€being€discussedÐ ° ÐSeptember€10,€2001,€as€set€forth€in€paragraph€24€of€the€Complaint.€Ð œì ÐBy€the€September€10,€2001,€members€meeting,€that€HCE€offer€wasÐ ˆØ Ðfor€$250.00€per€unit€and€contemplated€the€FuturePoint€membersÐ tÄ Ðretaining€the€excess€cash€on€hand€of€about€$63,000.00.€€Therefore,€theÐ `° ÐHCE€offer€had€a€value€of€$313.00€per€unit€for€anyone€who€wanted€toÐ L œ Ðsell.€The€offer€presented€by€Mr.€Wilder€from€Don€Allen€was€forÐ 8 ˆ Ð$250.00€per€unit€but€was€silent€on€the€subject€of€the€excess€cash.€IÐ $ t Ðthen€suggested,€as€a€point€of€discussion,€that€to€make€the€two€offersÐ  ` Ðcomparable,€òòifóó€persons€were€to€be€authorized€by€the€members€to€sellÐ ü L  Ðtheir€interests€to€Allen,€òòthenóó€perhaps€those€persons€should€receiveÐ è 8  Ðtheir€share€of€the€excess€cash.€€Their€investments€had€earned€it,€theyÐ Ô$  Ðdeserved€it,€there€had€never€been€a€previous€draw,€and€since€theyÐ À  Ðwould€be€taxed€on€it,€then€they€ought€to€have€it.€€This€is€what€I€saidÐ ¬ü  Ðat€the€September€10,€2001,€members€meeting€as€a€point€of€discussion.€Ð ˜è  ÐAs€Allenððs€offer€was€for€50%€of€the€Company€or€less,€not€everyoneÐ „Ô  Ðwould€be€selling,€and€therefore€not€all€the€cash€would€be€drawn.€Ð pÀ ÐThere€would€be€ample€cash€on€hand€to€operate€FuturePoint.€€à @d àTheÐ \¬ Ðinsinuation€that€I€would€advocate€taking€out€òòallóó€the€cash€to€causeÐ H˜ ÐFuturePoint€to€go€out€of€business€is€absurd.€€Ð4„` x` x Ðà8  àà8` Ð Ð àà ¸ àI€requested€a€management€committee€meeting€for€SeptemberÐ  p Ð12,€2001.€€On€Wednesday€September€12,€2001€Defendant€BrettÐ  \ ÐWilder€represented€to€me€that€he€would€arrange€to€pay€anyone€whoÐ øH Ðwanted€to€sell€the€amount€of€$300€per€unit€which€was€comparable€toÐ ä4 Ðthe€value€of€the€Allen€offer€($313.00€per€unit).€€That€same€day€I€spokeÐ Ð  Ðto€Defendant€Tim€Welles€and€Welles€confirmed€this.€€In€relianceÐ ¼  Ðupon€these€representations,€I€dropped€my€insistence€on€holding€aÐ ¨ø ÐManagement€Committee€meeting€that€day,€and€the€meeting€wasÐ ”ä Ðagreed€to€be€held€the€morning€of€September€14,€2001.ЀÐ` x` x Ðà8  àà8` Ð Ð àà ¸ àNo€management€committee€meeting€took€place€September€14,Ð l¼ Ð2001.€€As€relayed€to€me€after€the€fact,€prior€to€the€scheduledÐ X ¨ ÐManagement€Committee€meeting,€on€the€morning€of€FridayÐ D!” ÐSeptember€14,€2001€the€Defendants€conducted€a€secret€membersÐ 0"€  Ðmeeting€without€notice€to€me€and€voted€to€disband€the€ManagementÐ #l! ÐCommittee€and€expel€myself€and€the€other€Plaintiffs€as€membersÐ $X" Ðfrom€FuturePoint.Ðô$D #` x` x ÐÌ€à0  àPlaintiff€Mr.€Quade€testified€by€affidavit€as€follows:ÐÌ&"%(#(# ÐÌà8  àà8` Ð Ð àI€have€first€hand€knowledge€of€Brett€Wilderððs€real€reason€for€causingÐ ¤(ô#' Ðmyself€and€the€others€to€be€expelled.€€In€general,€that€reason€was€toÐ )à$( Ðexpel€us€at€a€low€price€and€sell€the€interests€taken€at€a€high€price.€€AsÐ |*Ì%) Ðit€specifically€pertained€to€Bill€Thompson€and€I,€his€reason€no€doubtÐ h+¸&* Ðincluded€the€fact€that€Bill€and€I€would€not€go€along€with€the€plan€heÐ ° Ðpresented€to€us€May€31,€2001,€to€expel€certain€members€and€take€theirÐ œì Ðinterests€and€sell€them€at€a€higher€price€to€one€of€the€offerors€at€theÐ ˆØ Ðtime.€€Mr.€Wilder€even€reduced€his€plan€to€a€spreadsheet,€a€copy€ofÐ tÄ Ðwhich€is€attached€as€Exhibit€A.€€He€had€it€all€figured€out.€€ThatÐ `° Ðspreadsheet€reflects€how€we€would€all€gain€by€expelling€30%€of€theÐ L œ Ðinterests€of€the€company.€€Those€selected€for€the€chopping€block€byÐ 8 ˆ ÐMr.€Wilder€were€Mike€Atkins,€Pat€Martin,€Rhonda€Shockley,€DennisÐ $ t ÐFreeman,€the€Zimmermans,€and€Ô_ÔMelindaÔ_Ô€Anderson.€€It€was€my€viewÐ  ` Ðthat€these€offers€to€purchase€interests€in€the€company€were€offers€inÐ ü L  Ðgeneral,€and€therefore€to€the€members€as€a€whole,€and€not€just€for€aÐ è 8  Ðfew€of€us€to€usurp€ð!ð€simply€because€we€knew€about€the€offers€and€theÐ Ô$  Ðother€members€at€the€time€did€not.€€Bill€Thompson€and€I€told€Mr.Ð À  ÐWilder€that€we€would€not€go€along€with€that€scheme,€it€was€notÐ ¬ü  Ðethical,€and€that€these€offers€needed€to€[be]€presented€to€all€membersÐ ˜è  Ðfor€discussion.€€Ð„Ô ` x` x Ðà8  àà8` Ð Ð àà ¸ àIt€seems€that€my€efforts€to€do€right€by€my€fellow€partners€inÐ pÀ Ðthe€company€got€me€expelled€and€without€a€job€at€FuturePoint.€€ThisÐ \¬ Ðwas€most€disappointing,€especially€to€see€that€Rhonda€[Shockley]€andÐ H˜ ÐDennis€[Freeman]€voted€to€expel€me€after€I€had€stood€up€for€notÐ 4„ Ðexpelling€them.Ð p` x` x ÐÌà  àDefendant€Mr.€Wilder€testified€by€deposition€regarding€the€spreadsheet€referred€to€above€andÐ øH Ðhis€plan€to€expel€certain€members€of€the€company€as€follows:Ð ä4 ÐÌà8  àà8` Ð Ð àA:€[Mr.€Wilder]€During€the€meeting€when€we€discussed€the€potentialÐ ¼  Ðexpulsion€and€the€guilt€by€association€topics,€during€that€meeting€weÐ ¨ø Ðwere€brainstorming,€all€of€us,€about€what€would€we€do,€and€weÐ ”ä Ðrealized€it€was€a€more€complicated€thing€than€we€envisioned,Ð €Ð Ðexpulsion€of€someone.€€And€we€were€discussing€various€scenarios€ofÐ l¼ Ðwait€a€minute,€when€you€do€that,€how€do€you€do€that€in€an€LLC.€€IÐ X ¨ Ðmean,€we€had€an€agreement€there,€we€were€reading,€we€were€sayingÐ D!” Ðwell,€you€know,€those€shares€would€have€to€become€the€ownership€ofÐ 0"€  Ðpersons€who€arenððt€expelled.€€This€was€a€worksheet€where€we€wereÐ #l! Ðtrying€to€do€the€math€on€that,€what€kind€of€scenario.Ð$X"` x` x Ðà8  àà8` Ð Ð àà ¸ àà  à*à0h` x` xàà0Àhxhxà*à0ÀxÀxàà0pxxà*Ðô$D #pxpx Ðà8  àà8` Ð Ð àQ:€And€thereððs€no€names€on€any€of€these€rows,€but€are€you€talkingÐ à%0!$ Ðabout€expelling€three€members€with€a€10€percent€interest?ÐÌ&"%` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àA:€No.€As€I€recall,€we€were€talking€about€expelling€Martin,€AtkinsÐ ¤(ô#' Ðand€the€10€percent€represented€by€the€other€small€members,€smallerÐ )à$( Ðshareholders€that€combined€to€10.€€Ð|*Ì%)` x` x Ðà8  àà8` Ð Ð àÐh+¸&*` x` x Ðà8  àà8` Ð Ð àQ:€Letððs€see€who€those€might€be.а` x` x Ðà8  àà8` Ð Ð àà ¸ àà  à*à  àà0h` x` xàà0Àhxhxà*à0ÀxÀxàà0pxxà*Ðœìpxpx Ðà8  àà8` Ð Ð àQ:€Because€[Plaintiff]€Anderson€is€three€[percent]?ЈØ` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àA:€Uh„huh.Ð`°` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àQ:€Zimmermans€were€four,€Freeman€and€Shockley€were€three,€thatÐ 8 ˆ Ðadds€up€to€10?Ð$ t` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àA:€Correct.€€During€that€meeting€we€were€talking€about€what€if€thisÐ ü L  Ðoccurred,€how€would€it€work.Ðè 8 ` x` x Ðà8  àà8` Ð Ð àà8¸ ` x` xàÐ ¸ ¸  Ðà8  àà8` Ð Ð àQ:€Tell€me€about€the€next€line€here,€says€total€sale€price,€$50,000;Ð À  Ðwhat€is€that?€€Is€that€the€sale€of€interests€to€Mr.€Allen?€€And€are€youÐ ¬ü  Ðnot€saying€that€weððre€going€to€sell€30€percent€of€the€company€to€Mr.Ð ˜è  ÐAllen€for€$50,000?Ð„Ô ` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àA:€I€donððt€remember€that€$50,000€figure.€€But,€I€do€know€that€duringÐ \¬ Ðthe€meeting€as€we€were€discussing€this€scenario,€we€knew€that€atÐ H˜ Ðsome€point€we€would€be€selling€interests€and€if€we€boughtð!ðÐ4„` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àQ:€If€you€bought€low,€you€could€sell€high?Ð \` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àA:€In€this€particular€situation,€thatððs€what€this€is€showing€you,€yes.Ðä4` x` x Ðà8  àà8` Ð Ð àà ¸ àà  à*à0h` x` xàà0Àhxhxà*à0ÀxÀxàà0pxxà*ÐÐ pxpx Ðà8  àà8` Ð Ð àQ:€The€first€gain€would€be€that€if€you€repurchase€30€percent€of€theÐ ¼  Ðinterests,€but€sell€20€percent€of€the€company,€the€first€gain€is€aÐ ¨ø Ðreallocation€of€membership€percentages€amongst€the€remainingÐ ”ä Ðmembers?ЀÐ` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àA:€Thatððs€correct.€ÐX ¨` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àQ:€Thatððs€reflected€in€the€final€column€that€says€final€percentageÐ 0"€  Ðinterest?Ð#l!` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àA:€Correct.Ðô$D #` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àQ:€For€example,€your€interest€would€go€up€from€20€percent€to€22.86Ð Ì&"% Ðpercent?и'#&` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àA:€Yes.Ð)à$(` x` x Ðâ âÐ |*Ì%) Ðà  àThe€record€contains€a€written€offer€from€Mr.€Wilder€to€Mr.€Freeman€and€Ms.€Shockley,€datedÐ ° Ðâ âSeptember€14,€2001,€which€states€in€its€entirety€as€follows:€Ð œì ÐÌà8  àà8` Ð Ð àI€do€hereby€offer€to€purchase€30€units€of€your€ownership€(includingÐ tÄ Ðfinancial€rights€and€governing€rights)€of€FuturePoint€AdministrativeÐ `° ÐServices,€LLC€for€the€sum€of€$10,000.00.€€This€purchase€offer€is€validÐ L œ Ðfor€a€period€of€10€days,€with€closing€of€sale€to€be€completed€withinÐ 8 ˆ Ð10€days€of€your€written€acceptance€of€this€offer.€€This€purchase€willÐ $ t Ðcomply€with€all€terms€of€the€FuturePoint€Administrative€Services,Ð  ` ÐLLC€Operating€Agreement.€€In€the€event€that€any€member€exercisesÐ ü L  Ðtheir€right€to€purchase€said€shares€at€the€agreed€price€($4,500.00),€IÐ è 8  Ðagree€to€pay€you€the€difference€of€$5,500.00€within€10€days€of€saidÐ Ô$  Ðpurchase.ÐÀ ` x` x ÐÌMr.€Freeman€and€Ms.€Shockley€returned€a€signed€letter€of€acceptance€the€same€day,€September€14,Ð ˜è  Ð2001,€stating€ð ð[w]e€accept€your€offer€as€written€and€verbally€described€to€each€of€us€on€this€date.ðð€Ð „Ô  ÐThe€same€day,€the€Defendants,€who€along€with€the€votes€of€Mr.€Freeman€and€Ms.€ShockleyÐ pÀ Ðcontrolled€53€percent€of€the€membership€units€and€voting€power€of€the€company,€voted€to€expel€theÐ \¬ ÐPlaintiffs€as€described€above.€€Ð H˜ ÐÌà  àThe€basis€for€Defendantsðð€argument€that€they€expelled€the€Plaintiffs€in€good€faith€is€theirÐ  p Ðassertion€that€ð ðthe€Plaintiff€members€of€the€management€committee€were€planning€to€vote€toÐ  \ Ðdistribute€the€remaining€cash€of€the€company,€approximately€$60,000,€to€the€members,€includingÐ øH Ðthemselves.ðð€€FuturePointððs€management€committee€had€the€authority€and€responsibility€to€distributeÐ ä4 Ðthe€net€cash€flow€of€the€company€to€the€members.€€Up€until€this€point,€it€appears€that€no€cashÐ Ð  Ðdistributions€had€been€made€to€any€member€of€the€company.€€The€record€reflects€that€after€PlaintiffsÐ ¼  Ðwere€expelled,€the€company€made€cash€distributions€to€the€remaining€members€in€amounts€ofÐ ¨ø Ð$13,405.20€on€March€27,€2002€and€$40,000.00€on€April€4,€2002.€In€their€affidavits,€Plaintiffs€Mr.Ð ”ä ÐQuade€and€Mr.€Atkins€deny€Defendantsðð€allegation€that€they€intended€to€distribute€the€remainingÐ €Ð Ðcash€among€the€members.€Ð l¼ Ðà  àÌà  àPlaintiffs€further€argue€that€Defendantsðð€assertion€is€false€and€pretextual€for€at€least€twoÐ D!” Ðreasons.€€First,€several€of€the€expelled€members,€Ms.€Anderson,€Mr.€and€Mrs.€Zimmerman,€and€Mr.Ð 0"€  ÐMartin,€were€not€on€the€management€committee€and€thus€had€no€role€in€any€alleged€decision€to€makeÐ #l! Ða€cash€distribution.€€Mr.€Quade€offered€another€reason€in€somewhat€colorful€fashion€in€his€affidavit:Ð $X" ÐÌà8  àà8` Ð Ð àThe€Defendants€claim€in€their€affidavits€that€myself,€Mike€Atkins,Ð à%0!$ Ðand€Bill€Thompson,€as€members€of€the€management€committee,€wereÐ Ì&"% Ðplanning€to€vote€to€distribute€all€the€remaining€cash€of€the€companyÐ ¸'#& Ðso€as€to€cause€the€company€to€not€meet€its€payroll€and€other€financialÐ ¤(ô#' Ðobligations.€€This€is€just€not€true.€€For€one€thing,€I€WAS€ONE€SUCHÐ )à$( Ðâ âPAYROLL€OBLIGATION.€€That€is,€I€worked€at€FuturePoint.€€TheÐ |*Ì%) Ðnotion€that€òòIóó€would€vote€to€ruin€my€investment€and€put€myself€out€ofÐ ° Ða€job€is€nuts!Ðœì` x` x Ðâ âÌà  àWe€find€that€there€exists€a€genuine€issue€of€material€fact€regarding€whether€the€DefendantsððÐ tÄ Ðactions€in€expelling€the€minority€Plaintiffs€were€taken€in€good€faith,€as€required€by€the€LLC€Act,€orÐ `° Ðwhether€they€expelled€Plaintiffs€solely€in€order€to€force€the€acquisition€of€their€membership€units€atÐ L œ Ða€price€of€$150.00€in€order€to€sell€them€at€$250.00€per€unit,€in€violation€of€their€fiduciary€duty.€€Ð 8 ˆ ÐÌà  àIn€addition,€there€is€a€legitimate€issue€raised€as€to€whether€the€sale€of€Mr.€Freeman€and€Ms.Ð  ` ÐShockleyððs€ownership€units€to€Mr.€Wilder€€violated€the€operating€agreement,€as€alleged€by€Plaintiffs.€Ð ü L  ÐThe€operating€agreement€contains€the€following€provision€regarding€the€transfer€of€financial€rightsÐ è 8  Ðin€the€company:Ð Ô$  ÐÌà8  àà8` Ð Ð à13.3€€òòVoluntary€Lifetime€Transfersóó.€€No€Member€may€make€aÐ ¬ü  ÐVoluntary€Lifetime€Transfer€of€Financial€Rights€except€pursuant€toÐ ˜è  Ðthis€Section.€€Any€Member€who€wishes€to€make€said€VoluntaryÐ „Ô  ÐLifetime€Transfer€must€promptly€send€a€notice€to€each€other€Member.€Ð pÀ ÐSuch€notice€shall€include€a€description€of€the€proposed€Transfer,€theÐ \¬ Ðprice€and€terms€on€which€the€Financial€Rights€are€to€be€Transferred,Ð H˜ Ðthe€name,€address€and€business€or€occupation€of€the€proposedÐ 4„ Ðtransferee,€and€any€other€facts€that€are,€or€would€reasonably€beÐ  p Ðdeemed€to€be,€material€to€the€proposed€Transfer.€€The€MemberÐ  \ Ðwishing€to€make€a€Voluntary€Lifetime€Transfer€shall€be€deemed€toÐ øH Ðhave€offered€to€sell€his€or€her€Financial€Rights€otherwise€to€beÐ ä4 Ðtransferred€to€the€other€Members.€€The€other€Members€shall€have€theÐ Ð  Ðoption€to€buy€the€Offered€Financial€Rights€at€either€(a)€the€price€andÐ ¼  Ðterms€set€forth€in€the€notice€of€proposed€Transfer€or€(b)€at€the€AgreedÐ ¨ø ÐPrice€and€on€the€Agreed€Terms.€€Each€other€Member€shall€have€sixtyÐ ”ä Ð(60)€days€from€such€notice€in€which€to€elect€to€buy€all€or€any€portionÐ €Ð Ðof€the€Offered€Financial€Rights.€€The€other€Members€may€elect€to€buyÐ l¼ Ðthe€Offered€Financial€Rights€in€proportion€to€their€respectiveÐ X ¨ ÐFinancial€Rights€(excluding€the€Offered€Financial€Rights),€or€in€suchÐ D!” Ðother€proportion€as€they€may€agree.€Ð0"€ ` x` x ÐÌIt€is€not€clear€from€the€record€whether€Plaintiffs€were€given€any€opportunity€to€purchase€theÐ $X" Ðmembership€units€and€financial€rights€of€Mr.€Freeman€and€Ms.€Shockley.€€There€is€nothing€in€theÐ ô$D # Ðrecord€to€suggest€that€they€were€offered€this€opportunity,€and€Plaintiffsðð€brief€argues€that€they€wereÐ à%0!$ Ðnot.€€There€thus€exists€an€issue€of€whether€the€sale€of€Mr.€Freeman€and€Ms.€Shockleyððs€financialÐ Ì&"% Ðrights€to€Mr.€Wilder€comported€with€the€terms€of€the€operating€agreement.€Ð ¸'#& ÐÌà  àFinally,€it€is€not€entirely€clear€from€the€record€exactly€who€paid€the€$10,000.00€to€Mr.Ð )à$( ÐFreeman€and€Ms.€Shockley.€€Mr.€Wilder€testified€as€follows€in€his€deposition:Ð |*Ì%) ÐÐ h+¸&* Ðà8  àà8` Ð Ð àQ:€Were€the€Freemans€and€the€Shockleys€[sic]€paid€with€aÐ ° ÐFuturePoint€check?Ðœì` x` x Ðà8  àà8` Ð Ð àÐ ` x` x Ðà8  àà8` Ð Ð àA:€I€believe€so,€but€Iððm€not€certain.ÐtÄ` x` x ÐÌIf€the€purchase€price€of€the€30€units€owned€by€Mr.€Freeman€and€Ms.€Shockley€was€paid€by€Mr.Ð L œ ÐWilder€out€of€company€funds,€it€would€not€only€be€a€potential€violation€of€Mr.€Wilderððs€duty€to€theÐ 8 ˆ Ðminority€shareholders,€but€also€a€potential€violation€of€his€duty€to€the€LLC€itself.€€In€addition€to€theÐ $ t Ðfact€that€the€$333.33€per€unit€paid€to€Mr.€Freeman€and€Ms.€Shockley€arguably€was€more€than€marketÐ  ` Ðvalue,€the€transaction€itself€was€one€which€would€quite€foreseeably€embroil€the€company€and€itsÐ ü L  Ðmembers€in€litigation.€€The€question€of€the€source€of€the€purchase€price€of€Mr.€Freeman€and€Ms.Ð è 8  ÐShockleyððs€ownership€units€is€to€be€determined€by€the€trier€of€fact€on€remand.€€Ð Ô$  ÐÌà  àFor€the€foregoing€reasons,€we€find€there€are€questions€of€material€fact€regarding€whether€theÐ ¬ü  ÐDefendantððs€actions€in€expelling€the€minority€Plaintiffs€were€taken€in€good€faith€and€in€accordanceÐ ˜è  Ðwith€their€fiduciary€duty€to€them.€€The€Trial€Courtððs€grant€of€summary€judgment€is€vacated,€and€theÐ „Ô  Ðcause€remanded€for€proceedings€consistent€with€this€opinion.€€Costs€on€appeal€are€adjudged€againstÐ pÀ Ðthe€Appellees€Brett€Wilder,€Michael€E.€Cox,€Lamarr€Stout,€Timothy€Welles,€Dennis€Freeman,€andÐ \¬ ÐRhonda€Shockley.Ð H˜ ÐÌÌÌà  àà ` àà ¸ àà  àà h àà À à_________________________________________Ð øH Ðà  àà ` àà ¸ àà  àà h àà À àHOUSTON€M.€GODDARD,€PRESIDING€JUDGEÐ ä4 ÐÌ