418 Meadow Street Associates, LLC v. Clean Air Partners, LLC
CourtSupreme Court of Connecticut
Date FiledMay 22, 2012
DocketSC18699
JudgeRogers; Norcott; Palmer; Zarella; McLachlan; Harper
StatusPublished
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Full Opinion
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418 MEADOW STREET ASSOCIATES, LLC v.
CLEAN AIR PARTNERS, LLC
(SC 18699)
Rogers, C. J., and Norcott, Palmer, Zarella, McLachlan and Harper, Js.
Argued January 6—officially released May 22, 2012
Andrew M. McPherson, with whom, on the brief, was
William J. Kupinse, Jr., for the appellant (plaintiff).
Michael J. Leventhal, for the appellees (defendants).
Opinion
ZARELLA, J. This case requires us to define the con-
tours of the term ‘‘adverse’’ in General Statutes § 34-
187 (b), which excludes the vote of a member of a
limited liability company authorizing the company to
bring a lawsuit when that member has an interest in the
outcome of the lawsuit that is adverse to the company’s
interest. On appeal, the plaintiff, 418 Meadow Street
Associates, LLC, claims that the Appellate Court incor-
rectly concluded that the trial court properly had deter-
mined that the plaintiff lacked standing to bring the
present action against the defendant, Clean Air Part-
ners, LLC.1 The plaintiff argues specifically that the
Appellate Court incorrectly concluded that the trial
court properly had interpreted § 34-187 (b) narrowly
and that, under a correct interpretation of the statute,
the plaintiff has the requisite authorization and standing
to bring the present action. The defendant responds
that the Appellate Court properly upheld the trial court’s
interpretation of the statute and deferred to its findings
of fact, which support the determination that the plain-
tiff lacked standing. The defendant also advances an
alternative ground for affirmance of the Appellate
Court’s judgment, namely, that the plaintiff did not bring
the present action in accordance with its operating
agreement, and, therefore, the action was not properly
authorized. We conclude that the Appellate Court
improperly affirmed the trial court’s judgment because
an ‘‘adverse’’ interest, as that term is used in § 34-187
(b), is not limited to circumstances in which a member
has a direct, adverse proprietary interest. Accordingly,
we reverse the judgment of the Appellate Court.
The record reveals the following procedural history
and relevant facts as found by the trial court. The plain-
tiff, a Connecticut limited liability company, owns and
manages a commercial office building located at 418
Meadow Street in the town of Fairfield. From at least
1998 until 2005, Steven Levine and Barbara Levine, who
are spouses, held equal ownership interests in the plain-
tiff. In 2005, Steven Levine sold his 50 percent interest
to Michael Weinshel, with Barbara Levine retaining her
50 percent interest. Thereafter, Weinshel sold a 16.67
percent interest to Mark Wynnick, retaining a 33.33
percent interest. Thus, at the time the present action
was commenced, the plaintiff was owned by Barbara
Levine, Weinshel and Wynnick, who respectively held
50 percent, 33.33 percent, and 16.67 percent interests
in the plaintiff.
The defendant leases and occupies space in the plain-
tiff’s building, and pays monthly rent to the plaintiff
for use of the space. Steven Levine has a 20 percent
ownership interest in the defendant.2 Barbara Levine
holds no proprietary interest in the defendant. At some
point during the defendant’s occupancy of the plaintiff’s
building, a dispute arose between the plaintiff and the
defendant over the scope of the lease and payment of
rent.3 This dispute resulted in Weinshel and Wynnick
bringing the present action, in the name of the plaintiff,
against the defendant to enforce the lease and to collect
rent. Barbara Levine expressly disapproved of bringing
a lawsuit against the defendant, notified Weinshel and
Wynnick of her disapproval, and did not vote to bring
the action.
As a special defense to the plaintiff’s complaint, the
defendant asserted that the plaintiff lacked corporate
authority to bring the action and, therefore, lacked
standing. The defendant claimed that the plaintiff’s
operating agreement provides that the plaintiff shall not
undertake certain activities, including the bringing of
a lawsuit, without the approval of members holding a
majority ownership interest in the plaintiff.4 Because
Barbara Levine did not consent to retaining counsel
or to bringing the lawsuit, and because Weinshel and
Wynnick collectively hold only a 50 percent interest in
the plaintiff, there was no approval by members holding
a majority ownership interest. Thus, the defendant
argued, the plaintiff lacked standing to maintain the
present action.
The plaintiff, in response, claimed that it had standing
and was properly authorized to bring the action because
Barbara Levine had an interest in the outcome of the
action that was adverse to the interest of the plaintiff
by virtue of her husband’s ownership interest in the
defendant. Relying on § 34-187 (b),5 the plaintiff con-
tended that Barbara Levine’s vote was properly
excluded when Weinshel and Wynnick decided to bring
an action against the defendant because she had an
interest in the outcome of the action that was adverse
to the plaintiff’s due to her husband’s interest in the
defendant and due to another pending action in which
Weinshel and Wynnick had filed a counterclaim alleging
mismanagement by Barbara Levine.6 According to the
plaintiff, because Weinshel’s and Wynnick’s interests
comprised the majority ownership interests under these
circumstances, the lawsuit against the defendant was
properly authorized.
After holding a hearing on the plaintiff’s complaint
and receiving posttrial briefs on the defendant’s special
defense that the plaintiff lacked standing, the trial court
issued a memorandum of decision. The trial court inter-
preted the meaning of ‘‘an interest . . . adverse to the
interest of the limited liability company’’; General Stat-
utes § 34-187 (b); and concluded that a member must
have a proprietary, or ownership, interest in the defen-
dant in order for his or her vote to be excluded under
§ 34-187 (b). Finding that ‘‘Barbara Levine [was] not
a party to the action and [that] she [did] not have a
proprietary interest in [the defendant]’’; (emphasis
added); the trial court concluded that ‘‘[s]he [could not]
be assigned an interest in the case simply because she
is the wife of a co-owner of the defendant.’’ The court
determined that ‘‘the plaintiff lack[ed] standing because
Barbara Levine’s interest [was] insufficient to disqualify
her as a voting member’’ and rendered judgment for
the defendant.7
The plaintiff appealed to the Appellate Court from
the trial court’s judgment, arguing that the trial court
improperly found that the plaintiff lacked standing to
maintain this action. The Appellate Court noted that,
‘‘[a]lthough the determination that a plaintiff lacks
standing is a conclusion of law that is subject to plenary
review, [the court] conduct[s] that plenary review . . .
in light of the trial court’s findings of fact, which . . .
will not [be] overturn[ed] unless they are clearly errone-
ous. . . . A finding is clearly erroneous when either
there is no evidence in the record to support it, or
the reviewing court is left with the definite and firm
conviction that a mistake has been made.’’ (Citation
omitted; internal quotation marks omitted.) 418
Meadow Street Associates, LLC v. Clean Air Partners,
LLC, 123 Conn. App. 416, 421, 1 A.3d 1194 (2010).
The Appellate Court, applying the foregoing standard
of review, concluded that ‘‘the record support[ed] the
[trial] court’s finding that Barbara Levine had no individ-
ual proprietary interest in the outcome of the action
adverse to the plaintiff’s interest and that her husband’s
ownership interest was not significant enough to assign
her with an interest adverse to the outcome of the action
based on their personal relationship alone.’’ (Emphasis
added.) Id., 422. The Appellate Court concluded further
that, ‘‘[a]t the time the vote was taken to pursue litiga-
tion, Barbara Levine was not facing claims against her
by Weinshel and Wynnick, and, therefore, the [trial]
court could have found that those claims, which were
nonexistent at the time the present case was filed, did
not create an adverse interest to the outcome of the
action. Accordingly, the [trial] court’s decision was not
erroneous in light of the record.’’8 Id., 423.
Thereafter, this court granted the plaintiff’s petition
for certification to appeal, limited to the following issue:
‘‘Did the Appellate Court properly conclude that the
plaintiff lacked standing to bring this action, since one
of its member’s votes should not have been excluded
pursuant to . . . § 34-187 (b) on the ground that she
had ‘an interest in the outcome of the suit that is adverse
to the interest of the [plaintiff]?’ ’’ 418 Meadow Street
Associates, LLC v. Clean Air Partners, LLC, 298 Conn.
932, 5 A.3d 490 (2010). Additional facts will be set forth
as necessary.
I
The issue in this appeal is whether the Appellate
Court properly concluded that the plaintiff lacked
standing on the basis of its interpretation of § 34-187
(b).9 We conclude that the Appellate Court improperly
interpreted the statute, and, therefore, we reverse the
judgment of the Appellate Court.
The plaintiff’s appeal requires us to interpret § 34-
187 (b), specifically, the meaning of the phrase, ‘‘an
interest in the outcome of the suit that is adverse to
the interest of the limited liability company . . . .’’ In
other words, we must determine when a member’s
interest is sufficiently adverse to the limited liability
company’s interest such that the member’s vote is
excluded pursuant to § 34-187 (b).10
We begin with the applicable standards of review.
First, issues of statutory construction are questions of
law over which we exercise plenary review. E.g., Stew-
art v. Watertown, 303 Conn. 699, 710, 38 A.3d 72 (2012).
‘‘The principles that govern statutory construction are
well established. When construing a statute, [o]ur fun-
damental objective is to ascertain and give effect to the
apparent intent of the legislature. . . . In other words,
we seek to determine, in a reasoned manner, the mean-
ing of the statutory language as applied to the facts
of [the] case, including the question of whether the
language actually does apply. . . . In seeking to deter-
mine that meaning, General Statutes § 1-2z directs us
first to consider the text of the statute itself and its
relationship to other statutes. If, after examining such
text and considering such relationship, the meaning of
such text is plain and unambiguous and does not yield
absurd or unworkable results, extratextual evidence of
the meaning of the statute shall not be considered. . . .
When a statute is not plain and unambiguous, we also
look for interpretive guidance to the legislative history
and circumstances surrounding its enactment, to the
legislative policy it was designed to implement, and to
its relationship to existing legislation and common law
principles governing the same general subject matter
. . . .’’ (Internal quotation marks omitted.) Wilcox v.
Schwartz, 303 Conn. 630, 638–39 n.5, 37 A.3d 133 (2012).
Conversely, when reviewing findings of fact, we defer
to the trial court’s determination unless it is clearly
erroneous. See, e.g., Goodspeed Airport, LLC v. East
Haddam, 302 Conn. 70, 76, 24 A.3d 1205 (2011). ‘‘A
finding of fact is clearly erroneous when there is no
evidence in the record to support it . . . or when
although there is evidence to support it, the reviewing
court on the entire evidence is left with the definite and
firm conviction that a mistake has been committed.’’
(Internal quotation marks omitted.) Id. ‘‘Under the
clearly erroneous standard of review, a finding of fact
must stand if, on the basis of the evidence before the
court and the reasonable inferences to be drawn from
that evidence, a trier of fact reasonably could have
found as it did.’’ (Internal quotation marks omitted.)
McBurney v. Paquin, 302 Conn. 359, 368, 28 A.3d 272
(2011).
According to the trial court, ‘‘Barbara Levine is not
a party to the action, and she does not have a proprietary
interest in [the defendant]. She cannot be assigned an
interest in the case simply because she is the wife of
a co-owner of the defendant.’’ In upholding the trial
court’s conclusion, the Appellate Court stated that ‘‘the
record support[ed] the [trial] court’s finding that . . .
[Barbara Levine’s] husband’s ownership interest was
not significant enough to assign her with an interest
adverse to the outcome of the action based on their
personal relationship alone.’’ 418 Meadow Street Asso-
ciates, LLC v. Clean Air Partners, LLC, supra, 123
Conn. App. 422. Thus, the Appellate Court’s conclusion
is slightly different from the conclusion that the trial
court reached. The trial court’s decision suggests that,
under the facts of this case, § 34-187 (b) would not have
excluded Barbara Levine’s vote because she did not
have a direct, proprietary interest in the defendant.
Furthermore, the trial court stated that the spousal rela-
tionship alone was not enough to support a claim that
a member has an interest adverse to the interest of the
limited liability company. The Appellate Court’s deci-
sion, on the other hand, suggests that a spousal relation-
ship may be sufficient to support an adverse interest
claim in some circumstances, depending on the extent
of the spouse’s interest in the defendant company. In
other words, the Appellate Court apparently accepted
the proposition that a member’s interest could be con-
sidered adverse by virtue of his or her spouse’s interest
but that, in the present case, Steven Levine’s interest
in the defendant was too minor to attribute it to Barbara
Levine. We need not address the differences between
the trial court’s and Appellate Court’s decisions, how-
ever, because our decision turns solely on a matter of
statutory interpretation.
We begin with the plain language of the statute. Sec-
tion 34-187 (b) does not define what constitutes an
adverse interest, nor is that concept defined elsewhere
in the Connecticut Limited Liability Company Act, of
which § 34-187 (b) is a part.11 ‘‘When a statute does not
provide a definition, words and phrases in a particular
statute are to be construed according to their common
usage. . . . To ascertain that usage, we look to the
dictionary definition of the term.’’ (Internal quotation
marks omitted.) Potvin v. Lincoln Service & Equip-
ment Co., 298 Conn. 620, 633, 6 A.3d 60 (2010); see
also General Statutes § 1-1 (a). As almost universally
defined, ‘‘adverse’’ means opposed to one’s interest.
See, e.g., Merriam-Webster’s Collegiate Dictionary (11th
Ed. 2003) (defining ‘‘adverse’’ as ‘‘acting against or in
a contrary direction: hostile,’’ or ‘‘opposed to one’s inter-
ests . . . unfavorable,’’ or ‘‘opposite in position’’); see
also Black’s Law Dictionary (9th Ed. 2009) (defining
‘‘adverse’’ as ‘‘[a]gainst; opposed [to],’’ or ‘‘[h]aving an
opposing or contrary interest, concern, or position,’’ or
‘‘[c]ontrary [to] or in opposition [to],’’ or ‘‘[h]ostile’’);
cf. Black’s Law Dictionary, supra (defining ‘‘adverse
interest’’ as ‘‘[a]n interest that is opposed to or contrary
to that of someone else’’).
We need not go beyond the plain language of the
statute, as the common usage of the term ‘‘adverse,’’
as well as the common definition of ‘‘adverse interest,’’
when applied to § 34-187 (b), does not lead to absurd
or unworkable results.12 See General Statutes § 1-2z.
Simply put, the term ‘‘adverse’’ in § 34-187 (b) encom-
passes any interest of a member that is contrary or
opposed to the limited liability company’s interest in
the outcome of the litigation. We therefore conclude,
contrary to the trial court, that the statute’s application
is not limited to circumstances in which a member’s
adverse interest is a proprietary one.
We also conclude that, when a spouse of a limited
liability company member holds an interest or main-
tains a position of control in a defendant company, as
in the present case, that member’s interest properly is
considered adverse to the outcome of a lawsuit that the
limited liability company brings against the defendant
company. The law generally affords a different treat-
ment to spouses than to other parties, and we see no
reason to deviate from that treatment in the present
case. For example, under our fraudulent transfer law,
a spouse is considered an insider to the transferee and
treated specially. See General Statutes § 52-552b (7)
(‘‘ ‘[i]nsider’ includes: [A] [i]f the debtor is an individual,
[i] a relative of the debtor or of a general partner of
the debtor . . . [B] if the debtor is a corporation . . .
[vi] a relative of a general partner, director, officer or
person in control of the debtor; [C] if the debtor is a
partnership . . . [ii] a relative of a general partner in,
a general partner of, or a person in control of the
debtor’’); see also General Statutes § 52-552e (a) (‘‘[a]
transfer made or obligation incurred by a debtor is
fraudulent as to a creditor, if the creditor’s claim arose
before the transfer was made or the obligation was
incurred and if the debtor made the transfer or incurred
the obligation: [1] With actual intent to hinder, delay
or defraud any creditor of the debtor’’); General Statutes
§ 52-552e (b) ([i]n determining actual intent under sub-
division [1] of subsection [a] of this section, consider-
ation may be given, among other factors, to whether:
[1] The transfer or obligation was to an insider’’). Also
instructive is the statutory scheme governing conflict-
ing interest transactions for nonstock corporations,
which presumes a conflict of interest in transactions
between a corporation and any person related to the
corporation’s director. See General Statutes § 33-1127
(1) (‘‘ ‘[d]irector’s conflicting interest transaction’
means a transaction effected or proposed to be effected
by the corporation, or by an entity controlled by the
corporation . . . [C] respecting which, at the relevant
time, the director knew that a related person was a
party or had a material financial interest’’); General
Statutes § 33-1127 (5) (‘‘ ‘[r]elated person’ means: [A]
The director’s spouse, or a parent or sibling thereof’’).
Simply put, under § 34-187 (b), the sweeping scope of
the term ‘‘adverse’’ requires that the interests of a mem-
ber’s spouse be imputed to the member.
Affording § 34-187 (b) broad treatment is consistent
with the principle that limited liability company law
provides a set of default rules governing such compa-
nies, which organizers and members can elect to modify
at their discretion through the company’s operating
agreement.13 Under § 34-187 (b), the default rule is that
a member will be ascribed the interests of his or her
spouse. Thus, a member’s vote to bring or not to bring
a lawsuit will be excluded when the limited liability
company’s interest in the outcome of the lawsuit is
adverse, or contrary to, the interest of that member
or the interest of that member’s spouse. Of course,
organizers and members can always elect to proceed
differently by drafting or amending the limited liability
company’s operating agreement so as to allow a mem-
ber’s vote to be included even when his or her spouse’s
interest may conflict with the company’s interest. See
General Statutes § 34-187 (a) (‘‘[e]xcept as otherwise
provided in an operating agreement’’). Thus, even
though we read § 34-187 (b) as categorically disqualify-
ing a member’s vote when his or her spouse has an
interest in the outcome of a lawsuit that is adverse to
the limited liability company’s interest, members can
always elect whether they want to be bound by that
statute.
For that reason, we envision no situation in which
this categorical rule would have an inequitable effect on
a limited liability company’s operation, and, therefore, it
will not lead to an unworkable result. Cf. General Stat-
utes § 1-2z. A categorical rule is preferable to the alter-
native because limited liability company members will
be aware from the outset whether their votes may be
excluded because of a spouse’s interest. It avoids any
need to determine the nature of the relationship
between the member and his or her spouse (e.g., the
extent to which they share in each other’s financial
gains and losses), and the nature of the relationship
between the spouse and the defendant company (e.g.,
whether the spouse holds a sufficient interest in the
company). Simply put, such a rule prevents unnecessary
debate, which likely may lead to litigation among mem-
bers as to whether their votes should be counted.
Should the limited liability company members not wish
to be bound by this rule, the statute allows them to
modify the operating agreement to provide for a differ-
ent rule in calculating votes when deciding to bring a
lawsuit in the name of the limited liability company.
Accordingly, we conclude that the Appellate Court
improperly upheld the trial court’s determination that
the plaintiff lacked standing because § 34-187 (b)
encompasses only adverse proprietary interests.
II
The defendant offers an alternative ground for
affirming the judgment of the Appellate Court.14 The
thrust of the defendant’s argument is that, because the
operating agreement is silent as to whether it adopts
or incorporates by reference § 34-187, the statute does
not apply to the plaintiff.15 Although we conclude that
the defendant’s argument is meritless, we explain why
it is in the interest of providing additional clarity to the
law governing limited liability companies.
The defendant’s argument misconstrues both the
meaning of the phrase, ‘‘[e]xcept as otherwise provided
in an operating agreement,’’ in § 34-187 (a), as well
as the general operation of the law governing limited
liability companies. Contrary to the defendant’s claim,
§ 34-187 applies to all limited liability companies unless
the operating agreement provides for a different rule
that conflicts with the statute or provides that the stat-
ute does not apply at all. That is the plain meaning of
the statutory language, ‘‘[e]xcept as otherwise provided
. . . .’’ (Emphasis added.) General Statutes § 34-187 (a).
Thus, if the operating agreement is silent as to the
applicability of the statute, the statute controls.16 See,
e.g., Ott v. Monroe, 282 Va. 403, 410, 719 S.E.2d 309
(2011) (holding that statutory provision governing dis-
sociation was applicable to limited liability company
because operating agreement did not ‘‘address statutory
dissociation and [did] not state an intent to supersede’’
statutory provision and, therefore, that ‘‘it lack[ed] spe-
cific language that would constitute an exception to
the rule of dissociation set forth in [the statute]’’). In
other words, and as we stated previously; see part I of
this opinion; the statutory scheme controls and pro-
vides for the default method of operation, unless the
organizers or members of the limited liability company
contract, through the operating agreement, for another
method of operation. Indeed, this is one of the founda-
tional principles of the law governing limited liability
companies.17
In the present case, the operating agreement does
not include any provision concerning how to calculate
votes for the purpose of bringing a lawsuit in the plain-
tiff’s name. Thus, § 34-187 controls. Accordingly, we
reject the defendant’s alternative ground for affirmance.
For the foregoing reasons, we conclude that the
Appellate Court incorrectly determined that the trial
court properly interpreted § 34-187 (b) in finding that
the plaintiff lacked standing. Instead, it is clear, as a
matter of law, that the plaintiff properly excluded Bar-
bara Levine from voting her interest in determining
whether to bring the present action because her interest
in the outcome of the action was adverse to that of the
plaintiff’s in light of her husband’s ownership interest
in the defendant.
The judgment of the Appellate Court is reversed and
the case is remanded to that court with direction to
reverse the trial court’s judgment and to remand the
case to that court for further proceedings according
to law.
In this opinion the other justices concurred.
1
Clean Air Group, Inc., which was added as a defendant in the present
action, is the successor in interest to the defendant, Clear Air Partners, LLC.
In the interest of simplicity, we refer to them collectively as the defendant
throughout this opinion.
2
Neither party disputes that Steven Levine holds an ownership interest
in the defendant, although the defendant, in its brief and at oral argument,
represents that Steven Levine’s ownership interest was only 1 percent when
the present action was commenced; the trial court, however, found his
interest to be 20 percent at that time. To the extent that the defendant is
challenging the trial court’s finding on appeal, we conclude that the finding
is not clearly erroneous. See, e.g., Brymer v. Clinton, 302 Conn. 755, 765,
31 A.3d 353 (2011) (‘‘[a] factual finding is clearly erroneous only in cases
in which the record contains no evidence to support it, or in cases in which
there is evidence, but the reviewing court is left with the definite and
firm conviction that a mistake has been made’’ [internal quotation marks
omitted]). The record reveals that Steven Levine, Barbara Levine and James
McManus, the defendant’s chief financial officer, all testified that Steven
Levine’s ownership interest in the defendant has ranged from 1 percent to
100 percent, and McManus specifically testified that Steven Levine owned
a 20 percent interest when the present action was commenced.
3
The nature of the dispute is not relevant for purposes of this opinion
but can be found in the trial court’s memorandum of decision. See 418
Meadow Street, LLC v. Clean Air Partners, LLC, Superior Court, judicial
district of Fairfield, Docket No. FBT-CV-XX-XXXXXXX-S (January 8, 2009).
4
The operating agreement provides in relevant part: ‘‘5.1.2. General Pow-
ers. . . . Notwithstanding anything to the contrary in this [a]greement, the
[m]anagers shall not undertake any of the following without the approval
of those [m]embers holding a majority of the [p]ercentages:
***
‘‘5.1.2.10. make any and all expenditures . . . including, without limita-
tion, all legal, accounting and other related expenses incurred in connection
with the organization and financing and operation of the [c]ompany . . . .’’
The operating agreement is silent, however, as to whether and when a
member may be disqualified from voting his or her interest.
5
General Statutes § 34-187 provides: ‘‘(a) Except as otherwise provided
in an operating agreement, suit on behalf of the limited liability company
may be brought in the name of the limited liability company by: (1) Any
member or members of a limited liability company, whether or not the
articles of organization vest management of the limited liability company
in one or more managers, who are authorized to sue by the vote of a majority
in interest of the members, unless the vote of all members shall be required
pursuant to subsection (b) of section 34-142; or (2) any manager or managers
of a limited liability company, if the articles of organization vest management
of the limited liability company in one or more managers, who are authorized
to sue by the vote required pursuant to section 34-142.
‘‘(b) In determining the vote required under section 34-142 for purposes
of this section, the vote of any member or manager who has an interest in
the outcome of the suit that is adverse to the interest of the limited liability
company shall be excluded.’’
6
In the other pending action, Barbara Levine was seeking to dissolve
the plaintiff.
7
After determining that the plaintiff lacked standing, the trial court never-
theless ruled on the merits of the plaintiff’s claim in the defendant’s favor.
8
Noting that the trial court also reached the merits of the plaintiff’s
complaint; see footnote 7 of this opinion; the Appellate Court set aside the
trial court’s judgment and remanded the case with direction to modify the
judgment in accordance with the trial court’s decision that it lacked subject
matter jurisdiction. See 418 Meadow Street Associates, LLC v. Clean Air
Partners, LLC, supra, 123 Conn. 424 (‘‘[t]he form of the judgment is improper,
the judgment is set aside and the case is remanded with direction to render
judgment dismissing the action for lack of subject matter jurisdiction’’); see
also id., 418 n.4 (‘‘[a]fter concluding that the plaintiff lacked standing, the
[trial] court should have dismissed the action for lack of subject matter
jurisdiction and proceeded no further’’).
9
The parties present arguments concerning the proper standard of review
applied by the Appellate Court. Because our decision turns solely on the
proper interpretation of the statute, we need not address the parties’ argu-
ments with regard to the standard of review applicable to other issues
presented in the trial court or on appeal to the Appellate Court.
10
For purposes of clarity, and even though it is not directed disputed by
the parties, we repeat the Appellate Court’s conclusion that ‘‘the language
of § 34-187 (b) provides that an individual is excluded from a vote ‘for
purposes of this section’ when such individual has an interest in the outcome
of ‘the suit . . . .’ General Statutes § 34-187 (b). The statute’s reference to
the ‘purposes of this section’ and ‘the suit’ . . . suggest[s] that the adverse
interest must be in the outcome of the action that is being voted on pursuant
to § 34-187 [a], not in another action pending with different parties and
separate issues. The statute, on its face, indicates that an individual’s exclu-
sion for an adverse interest in the outcome of the suit must pertain to the
litigation in question for the vote.’’ 418 Meadow Street Associates, LLC v.
Clean Air Partners, LLC, supra, 123 Conn. App. 423.
We note that the plaintiff argues that the court, in determining whether
Barbara Levine’s interest was adverse to the interest of the plaintiff, may
take notice of other pending litigation between the plaintiff and Barbara
Levine. The plaintiff’s argument is problematic for two reasons. First, it
asks the court retroactively to impute an adverse inference to Barbara
Levine’s objection to bringing the present action on the basis of a lawsuit
filed by the plaintiff against her after the plaintiff decided to bring the
present action. Second, it seeks to apply the standards for breach of fiduciary
duty, as alleged in the subsequent lawsuit, to § 34-187 (b). Whether Barbara
Levine breached her fiduciary duty by objecting to bringing the present
action is an inquiry wholly separate from whether she had an interest in
the outcome of the present litigation that is adverse to the interest of the
plaintiff. Although we need not reach the merits of the plaintiff’s argument
in this regard, we are skeptical that such reasoning could prevail in
another case.
11
We note that General Statutes § 34-101 provides definitions for terms
in the act, including the following: ‘‘[U]nless the context otherwise requires:
***
‘‘(11) ‘Limited liability company membership interest’ or ‘interest’ or ‘inter-
est in the limited liability company’ means a member’s share of the profits
and losses of the limited liability company and a member’s right to receive
distributions of the limited liability company’s assets, unless otherwise pro-
vided in the operating agreement.’’
We conclude that this definition does not apply to the use of the word
‘‘interest’’ in § 34-187 (b), quite simply because such an application would
be nonsensical, as the context specifically refers to an interest in the outcome
of a lawsuit. See, e.g., Barrett v. Montesano, 269 Conn. 787, 797, 849 A.2d
839 (2004) (‘‘we interpret statutes to avoid bizarre or nonsensical results’’
[internal quotation marks omitted]).
12
Similarly, we conclude that the common definition of the word ‘‘interest’’
as an ‘‘advantage’’ or ‘‘benefit’’; Merriam-Webster’s Collegiate Dictionary,
supra; also applies to the statute. Although the term ‘‘interest’’ is subject to
more than one definition, and is also defined more specifically in other
statutes governing different types of business organizations; see, e.g., Gen-
eral Statutes § 34-9 (8); General Statutes § 34-301 (5); see also footnote 11
of this opinion; we conclude that the context of § 34-187 (b), combined with
the lack of a more specific definition in this statute, demonstrates the
legislature’s intent that the common meaning of this term should apply. See,
e.g., State v. Desimone, 241 Conn. 439, 455, 696 A.2d 1235 (1997) (in absence
of compelling reason, court will not impute to legislature intent that is
contrary to plain statutory language).
13
Because the present case concerns a relatively recent statutory develop-
ment, we pause to summarize the background of limited liability companies.
‘‘A limited liability company . . . has been described as an unincorporated
association of investors, called members in [common] parlance, whose per-
sonal liability for obligations of the venture are limited to the amount
invested. . . . It is a distinct business entity that adopts and combines
features of both partnership and corporate forms. . . .
‘‘From the partnership form, the [limited liability company] borrows char-
acteristics of informality of organization and operation, internal governance
by contract, direct participation by members in the company, and no taxation
at the entity level. . . . From the corporate form, the [limited liability com-
pany] borrows the characteristic of protection of members from investor-
level liability. . . . Flexible in nature, the [limited liability company] allows
direct involvement and control by its members yet also permits a corporate
representative form of governance if the entity elects to be governed by
managers.’’ Gottsacker v. Monnier, 281 Wis. 2d 361, 370–71, 697 N.W.2d
436 (2005).
Wisconsin’s limited liability company law is similar in many regards to
Connecticut’s, and Wisconsin has a statute identical in all material respects
to § 34-187 (b). See Wis. Stat. § 183.1101 (1) (2009–10). The key defining
feature or purpose of a limited liability company, as distinguished from
other corporate forms, is that it is ‘‘a business entity providing limited
liability, flow-through taxation, and simplicity.’’ (Internal quotation marks
omitted.) Gottsacker v. Monnier, supra, 281 Wis. 2d 372; see also Ott v.
Monroe, 282 Va. 403, 408, 719 S.E.2d 309 (2011) (‘‘[t]he [limited liability
company] is a hybrid entity, borrowing from both the corporate and partner-
ship models to combine a corporation’s limited liability for its owners with
a partnership’s pass-through treatment for income tax purposes’’ [internal
quotation marks omitted]).
14
We note that the plaintiff claims that the defendant did not properly
raise its alternative ground for affirmance. Our analysis of the defendant’s
alternative ground for affirmance is not prejudicial to the plaintiff, however,
because we reject it, and, therefore, we need not address the plaintiff’s
claim. Cf. Furs v. Superior Court, 298 Conn. 404, 413, 3 A.3d 912 (2010) (‘‘[w]e
have the discretion to review [improperly presented] claims [of alternative
grounds for affirmance] . . . but do not review them when such review
would prejudice the opposing party’’ [citation omitted]).
15
In the defendant’s own words, ‘‘[t]he language in the operating
agreement does not include any provision for the exclusion of a member’s
vote due to an adverse interest. The operating agreement does not incorpo-
rate the provisions of . . . § 34-187 (b), and [§] 34-187 (a) [provides] that the
statute applies ‘[e]xcept as otherwise provided in an operating agreement.’ ’’
16
If the defendant’s argument were taken to its logical end, then only those
statutory provisions explicitly mentioned or referenced in the operating
agreement would control. Yet, the Limited Liability Company Act does not
even require that a limited liability company have an operating agreement.
17
As the Supreme Court of Wyoming recently stated: ‘‘It is not fatal to an
operating agreement that it does not cover all pertinent concerns. If certain
subjects are not addressed in the operating agreement, the limited liability
company is guided in regard thereto by the default provisions of the statutes.
Perhaps because of the statutory default concept, limited liability statutes
typically do not mandate a particular structure or particular provisions for
operating agreements:
‘‘The statutes allow the owners of the business to use the operating
agreement to set up the management of the entity pretty much as they
please, and in a manner far less restrictive than the special close corporation
statutes, which generally share the same goal of circumventing the manda-
tory provisions of the general corporation statute to facilitate managerial
flexibility.’’ (Citation omitted; internal quotation marks omitted.) In re Kite
Ranch, LLC, 234 P.3d 351, 360 (Wyo. 2010).
We perceive statements by this court to be particularly significant with
respect to foundational principles of limited liability company law because
Wyoming was the first state to enact laws governing such companies. See,
e.g., S. Hamill, ‘‘The Origins Behind the Limited Liability Company,’’ 59 Ohio
St. L.J. 1459, 1460 (1998).