Chapman v. Chapman
Connecticut General Statutes §34-141 does not provide a cause of action against a limited liability company for the alleged wrongful conduct of members or managers. The plaintiff and the individual defendants are members of a limited liability company known as Route 6 Realty LLC. The plaintiff owns 25 percent, and the individual defendants own 75 percent. The defendant limited liability company leases property to the defendants' company, Chapman Lumber Inc. The plaintiff's complaint alleged that the individual defendants, who manage the limited liability company, reduced the rent paid to the limited liability company by Chapman Lumber from $15,000 per month to $11,500 per month. The plaintiff maintained that the individual defendants and the limited liability company violated C.G.S. §34-141. The statute provides in part, "A member or manager shall discharge his duties under section 34-140 and the operating agreement, in good faith, with the care an ordinary prudent person in a like position would exercise under similar circumstances, and in the manner he reasonably believes to be in the best interests of the limited liability company, and shall not be liable for any action taken as a member or manager, or any failure to take such action, if he performs such duties in compliance with the provisions of this section." The statute, wrote the court, does not make the limited liability company legally responsible, if members or managers act in bad faith. The court granted the motion to strike the claim that the limited liability company violated §34-141. Allegations that the majority members excluded the plaintiff from the decision making process and reduced the rent to another company they own and acted in bad faith, to benefit themselves, were sufficient to state a claim against the individual defendants, and that count survived. Allegations that the defendants violated C.G.S. §34-141, that the defendants engaged in deceptive acts or practices, that the defendants' conduct violated public policy and that the plaintiff suffered an ascertainable loss were sufficient to state a claim that the defendants violated the Connecticut Unfair Trade Practices Act. The court denied the defendants' motion to strike the CUTPA count.