Padawer v. Yur
The plaintiff's position as sole member of a limited liability company did not provide him with standing to recover individually for harm to the limited liability company. The pro se plaintiff, Lucien Padawer, brought this action alleging that the defendants, Ronen Yur and Yurway Design, LLC, breached an oral agreement to purchase Clare Jones, LLC, a retail business selling women's clothing and accessories and that the defendants were unjustly enriched to the plaintiff's detriment. The defendants denied the allegations. During trial, the plaintiff introduced as exhibits documents and proposed drafts of sales contracts, all indicating that he was acting as an agent of Clare Jones, LLC, not as an individual. The trial court denied the defendants' motion to dismiss for failure to make out a prima facie case claiming that the plaintiff lacked standing to bring the claims as it was the limited liability company that suffered the alleged harm, rather than the plaintiff individually. Ultimately the court rendered judgment for the plaintiff, awarding $44,000, representing the $50,000 value of the business assets minus a $6000 credit for "partial payment of inventory sold" while the store was under Yur's control. The defendants appealed raising multiple claims including, dispositively, that the court erred in denying their motion to dismiss. The Appellate Court reversed the judgment and remanded the case with direction to dismiss the action. Viewing the evidence offered during the plaintiff's case-in-chief in the light most favorable to him and drawing every reasonable inference in his favor, it could not be concluded that the plaintiff had standing to bring the action. The documents admitted into evidence and the plaintiff's own testimony, indicated that Clare Jones, LLC was the contemplated party to the contract with the defendants and that the assets intended to be transferred were assets belonging to the company rather than the plaintiff individually. If the defendant's alleged breach caused harm, it was to Clare Jones, LLC, not to the plaintiff in his individual capacity. Although the plaintiff is the sole member of Clare Jones, LLC, it did not impute ownership of the company's assets to him or provide him with standing to recover individually for harm to the limited liability company.