Brinkley v. MJM Wildlife, LLC
CourtCourt of Appeals of North Carolina
Date FiledOctober 21, 2026
Docket25-414
JudgeJudge Michael Stading
StatusPublished
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Full Opinion
IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA25-414
Filed 21 October 2026
Alexander County, No. 23CVS000399-010
JACK ISSAC BRINKLEY, Plaintiff,
v.
MJM WILDLIFE, LLC, Defendant.
Appeal by Plaintiff from order entered 28 January 2025 by Judge L. Todd
Burke in Alexander County Superior Court. Heard in the Court of Appeals 19
November 2025.
Clodfelter Law, PLLC, by Attorney Christina Clodfelter, for plaintiff-appellant.
Bell, Davis & Pitt, P.A., by Attorneys Carson D. Schneider and Alan M. Ruley,
for defendant-appellee.
STADING, Judge.
This case concerns an action for judicial dissolution of a North Carolina limited
liability company (“LLC”). Jack Brinkley (“Plaintiff”) is one of three members of MJM
Wildlife, LLC (“Defendant”), which is a closely held family entity that owns real
property located on Lake Norman. After motions for summary judgment were heard,
the trial court dismissed the action. For the reasons below, we affirm.
BRINKLEY V. MJM WILDLIFE, LLC
Opinion of the Court
I. Factual and Procedural Background
On 12 September 2023, Plaintiff filed a complaint seeking judicial dissolution
of Defendant, which is a North Carolina limited liability company with three
members, one of which is Plaintiff. The complaint alleged that Defendant’s sole asset
was a parcel of real property consisting of 6.2520 acres (the “Property”). While
asserting that surrounding properties contain a variety of uses, the complaint
maintained that Defendant’s Property was not actively being used for “any significant
productive use.” The complaint also provided that Defendant does not generate any
cash flow or earn income from the Property but instead incurs costs to maintain its
sole asset. The complaint alleged that members were required to make capital
contributions to cover the Property’s expenses. According to the complaint, the
members have been unable to agree on how to both use the Property and continue to
provide capital to maintain it.
Additionally, the complaint alleged the following:
13. That Plaintiff Jack Brinkley is unable to
productively use the property . . . in any productive way as
the other members refuse to subdivide the property or
change the nature and use of the property in any way.
14. That Plaintiff Jack Brinkley does not want to
continue to allow the property to be used in a manner that
is [sic] contrary to the property’s highest and best use, in a
manner that requires members to make annual capital
contributions to maintain the property, and produces no
monetary benefit to ownership of the property.
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15. That Plaintiff has sought a buy-out of his interest in
the LLC or a partition of the property such that Plaintiff
would solely own a portion of the property.
....
18. That Plaintiff’s interest in the Defendant LLC is
being harmed because Defendant’s sole asset continues not
to be used according to its highest and best use and in a
manner that the asset produces no monetary benefit.
19. That there is no reasonable alternative to judicial
dissolution as the other members of the LLC have refused
to purchase Plaintiff’s interest for the fair market value of
Plaintiff’s interest or partition the property that is the
LLC’s sole asset.
20. That liquidation of the Defendant LLC is reasonably
necessary to protect the rights of Plaintiff.
21. That liquidation of the Defendant LLC is necessary
to prevent the LLC’s single asset from being wasted.
22. That fairness and equity require that the LLC be
dissolved.
On 19 October 2023, Defendant filed an answer and a motion to dismiss, which
was later denied. On 20 December 2024, Defendant filed a motion for summary
judgment and an affidavit from Matthew McPherson, who was a “member and the
manager of MJM Wildlife, LLC.” Mr. McPherson’s affidavit attached Defendant’s
operating agreement as “Exhibit A.” In support of its motion for summary judgment,
Defendant pointed to “the pleadings, depositions, written discovery responses,
answers to interrogatories, and admission on file.”
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On 6 January 2025, Plaintiff also filed a motion for summary judgment.
Plaintiff’s motion for summary judgment stated it relied on: “1. Plaintiff’s Responses
to Defendant’s First Set of Interrogatories, Request for Production of Documents, and
Request for Admissions[;] 2. Defendant’s Responses to Plaintiff’s First Set of
Interrogatories and Request for Production of Documents[;] 3. Deposition of Jack
Brinkley[;] Deposition of Jennifer Brinkley[;] [and] 5. Affidavit of Jack Brinkley[.]”
On 17 January 2025, Defendant moved to strike portions of Plaintiff’s affidavit on the
grounds that it did not contain statements of “fact” based on “personal knowledge.”
Both motions for summary judgment and the motion to strike were set to be
heard on 27 January 2025. On 23 January 2025, in addition to Plaintiff’s own
affidavit, Plaintiff submitted an affidavit of Tim Cress, an appraiser, with an
attached appraisal report. Likewise, before the hearing, Defendant filed the
following: (1) an affidavit of Jason Albert Walser, who was a friend and advisor of the
LLC creator; (2) a supplemental affidavit of Mr. McPherson, the sole managing-
member of the LLC; (3) an affidavit of Molly McPherson Weathers, the third member
of the LLC; (4) an affidavit of Damon C. Bidenscope, an appraiser, with an attached
appraisal; and (5) an affidavit of William T. Duffy, an appraiser, with an attached
appraisal report.
On 27 January 2025, the hearing began as follows:
THE COURT: Good morning. What motion is this?
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[DEFENDANT’S COUNSEL]: Your Honor, we have
cross-motions for summary judgment. Plaintiff filed a
motion in January. We represent the defendant, we filed in
December. We also have a motion to strike an affidavit.
THE COURT: All right.
Defendant’s counsel then began by recounting that:
The defendant LLC was formed in 2011 by Albert
Schneider to own a piece of real estate on Lake Norman.
He gifted three equal membership interests to his
grandchildren in 2011. The LLC has the same three
members today; Matt, Molly, and Jack.
Matt is the sole manager. The plaintiff, Jack
Brinkley, is one of the grandchildren. . . . He owns one-
third share, just like his cousins.
During its argument at the hearing, Defendant’s counsel contended that the
operating agreement governed. According to Defendant, the operating agreement
provided that “[t]he purpose and business of the company shall be to engage in the
ownership, possession, enjoyment of real property, specifically including, but not
limited to, the 6.25-acre parcel.” With that, Defendant’s counsel maintained that
Plaintiff failed to show that “ownership, possession, and enjoyment means anything
other than their common meanings[ ] . . . . And other evidence in the record shows
that Mr. Schneider’s purpose in creating the LLC, and gifting membership interests
to his grandchildren, was to preserve the property for future generations.”
Pointing to Jennifer Brinkley’s deposition, Defendant asserted that, at the
time of the LLC creation, Plaintiff’s mother signed the operating agreement on behalf
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of Plaintiff, who was a minor at the time, in her capacity as a custodian under the
North Carolina Uniform Transfers to Minors Act. During Mrs. Brinkley’s deposition,
she admitted to understanding that when she signed the operating agreement, she
agreed on Plaintiff’s behalf that Plaintiff would be “bound by and perform all the
terms of the operating agreement.” Further, Defendant noted that Plaintiff admitted
that the operating agreement is a contract that “binds the parties.” Once again
turning to the operating agreement, Defendant explained that:
The purpose is ownership, possession, and enjoyment of
real property. Matt is the sole manager. Members don’t get
to manage the company. The property cannot be sold or
subdivided without consent of all of the members. And, as
we just saw, Matt, Molly, Jack, and his mother all signed
and agreed to the terms of the operating agreement.
[Plaintiff] confirmed in his deposition that he
understood the property couldn’t be sold without the
consent of all the members. In addition, he confirmed that
he was not the manager and he did not make business
decisions for the company.
So where does this lawsuit come from, Your Honor?
We found this email in discovery. It’s from [Plaintiff’s]
mother in March of 2023 to [Plaintiff’s counsel] and a
person at Wells Fargo. She says, “I’m heading to Arlington
to look at a condo with Jack. If I purchase it, proceeds from
the lake property will reimburse me.”
That is what this lawsuit is all about, Your Honor.
[Plaintiff] wants to dissolve the LLC and have that real
property sold to pay his mother back for his $850,000
condominium in Arlington, Virginia. And we took
[Plaintiff] through this in his deposition, and he confirmed
it.
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[Plaintiff] was asked, “did you look at the condos
with your mother in Arlington?”
“Yes.”
“Did you end up buying that condo?”
“Yes.”
“And did your mother give you money to buy that
condo?”
“A loan, yes.”
“So she loaned you money to buy this condo, and you
have an understanding that this is a loan that you will
have to pay her back?”
“Correct.”
Now, in the email, she says, “Proceeds from the lake
property will reimburse me.”
“Yeah.”
“Is that her plan or your plan or some combination?”
“A combination.”
“When did you guys make that plan?”
“Around the time we bought the condo.”
And continuing, [Plaintiff] was asked, “so as you sit
here today, it’s your intent to use the proceeds from the sale
of the lake property to pay back the loan your mother gave
you?”
Answer: “Correct.”
So that’s why we have this lawsuit, Your Honor.
[Plaintiff’s] mother loaned [Plaintiff], age 26, $850,000 to
buy a condo in Arlington, Viriginia. And [Plaintiff] now
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wants to dissolve the LLC and sell the property to pay his
mother back. [Plaintiff’s] mother confirmed that plan.
The following colloquy occurred when the trial court asked whether Plaintiff
“even want[s] to be part of this LLC anymore? Does he still want to own an interest
in it?”:
[DEFENDANT’S COUNSEL]: No, he wants it dissolved,
property sold.
THE COURT: Well, why couldn’t the other members just
not buy his interest out?
[DEFENDANT’S COUNSEL]: They’ve tried.
THE COURT: What does that mean?
[DEFENDANT’S COUNSEL]: It means they haven’t been
able to agree on a price.
The trial court then heard from Plaintiff’s counsel. Plaintiff’s counsel began
by stating that Plaintiff is from Iredell County, is currently in graduate school at
George Mason, and has no intention on returning to Iredell County. Plaintiff’s
counsel then asserted that Plaintiff “doesn’t want to own [the Property] anymore. He
wants to put his money in something else. He doesn’t want to be held hostage owning
something that he doesn’t have an interest in.” The trial court responded that:
He’s just going to have to be patient. But if they don’t want
to buy his interest out, that’s not the purpose of dissolution,
just because he doesn’t want to own interest in it anymore,
ma’am. Unless you can point me to some law to that effect,
I’ll hear that. I know what the law is, I don’t – I understand
what the facts are.
Plaintiff’s counsel then contended that:
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[T]here are expenses associated with the Property, that
include property taxes, insurance, and the Secretary of
State expenses. And every year, Mr. McPherson, who’s the
sole manager of the property has sent an email. And he has
requested funds from Mr. Brinkley in his capacity as the
manager of the LLC. And he’s requested between –
typically, somewhere between $3500 and $4,000 because
this LLC has expenses. And so, every year [Plaintiff] is
being asked to contribute financially to something that he
doesn’t have an interest in.
From there, Plaintiff maintained that according to the operating agreement,
the LLC is a business. Plaintiff then argued that according to federal case law, a
“business is not just owning land. Owning land and paying taxes is not business.”
The trial court engaged in following colloquy:
THE COURT: Do you have a case that if one party no
longer wants interest in an LLC, they can force the other
members of the LLC to purchase it? Do you have a case
that dictates that? Because that’s what the facts are.
[PLAINTIFF’S COUNSEL]: Judge, I have the -- I have two
cases that I cited --
THE COURT: Yeah. But --
[PLAINTIFF’S COUNSEL]: -- but I don’t think--
THE COURT: Do you have a case as to which I’ve just
described? Do you have a case that stands for that
proposition, that they could be forced to buy his interest
just because -- or the LLC can be dissolved just because
[Plaintiff] no longer wants to have interest in it?
[PLAINTIFF’S COUNSEL]: What I have, Judge, is not that
-- not in those terms. What I have is the Meiselman case,
and also another case that looks at those two statutory
grounds and talks about when those two statutory grounds
and the requirements of those grounds are met. And so,
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does it specifically say if one person wants his ownership
interest to be sold? That’s not the case Judge.
Plaintiff’s counsel then argued that the operating agreement in this case
cannot be followed because there is no business and no source of income to pay
expenses. It was also emphasized that the members cannot agree on the use of the
Property. Specifically, Plaintiff’s counsel asserted that Plaintiff wishes to use the
Property in a productive manner, rather than merely recreational use that generates
no income and is “sitting there incurring expenses that have to be paid.” By
attempting to analogize the LLC to a corporation, Plaintiff’s counsel then argued that
judicial dissolution is reasonably necessary to protect Plaintiff’s interest.
At the end of Plaintiff’s argument, the hearing concluded as follows:
THE COURT: All right. I get the picture.
So, Counsel, this seems like this is beyond just a
disagreement. It seems like they’re deadlocked as to what
to do with the property. Is there a plan to develop the
property? What do they do with the property? Why – how
far are they apart as far as you try to divide this interest?
What are they doing so that they don’t have to use their
personal income to pay these taxes, rather than there being
some business on the property that would pay the business
expense related to the LLC?
[DEFENDANT’S COUNSEL]: Yeah. There is no deadlock,
Your Honor, because it is a three-member LLC, and two of
the three agree that it should be used just exactly as the
operating says it should be used; enjoyed by the family,
possessed by the family, not sold.
The operating agreement talks about developing it
and says, sure, you can develop it, sell it, partition it, divide
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it, if everybody agrees. But it takes a unanimous
agreement from every person. That is not here. If I could
respond to just a couple of --
THE COURT: Sure.
[DEFENDANT’S COUNSEL]: -- the things that
[Plaintiff’s] counsel said.
She said that there is no source of income to pay the
expenses. Well, here is the affidavit of Matt McPherson.
Molly submitted a similar affidavit. As you will see, it says
the annual expenses of property taxes, the filing fee for the
annual report, insurance, and electricity. Every year from
2011 to 2022, Your Honor, the members voluntarily paid a
third of the expenses, including [Plaintiff].
Then in 2023 when [Plaintiff] bought the condo,
[Plaintiff] decided he didn’t want to pay a third. And so you
know what has happened, they’ve paid it. Matt and Molly
have paid it. The company has gone on operating just like
it has since 2011, so there’s no --
THE COURT: All right. I’m going to allow your motion to
suppress and deny your motion to suppress. If you will
prepare an order, Counsel.
[DEFENDANT’S COUNSEL]: I have an order, Your
Honor.
THE COURT: All right.
[DEFENDANT’S COUNSEL]: And on the motion to strike,
Your Honor, I just said, “The Court has not considered
inadmissible portions of the affidavit of [Plaintiff]. And
accordingly, defendant’s motion to strike that affidavit is
denied as moot.”
THE COURT: So noted. Thank you, Counsel.
[DEFENDANT’S COUNSEL]: Thank you, Your Honor.
Plaintiff timely appealed.
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II. Analysis
On appeal, Plaintiff contends that the trial court erred by granting summary
judgment for Defendant and against Plaintiff. Further, Plaintiff contends that the
trial court erred by entering an order inconsistent with judgment rendered in open
court. That is, Plaintiff maintains that the trial court erred by ordering summary
judgment when, at the hearing, the trial court stated: “I’m going to allow your motion
to suppress and deny your motion to suppress.” For the reasons below, we conclude
that both contentions are meritless.
A. Summary Judgment
First, Plaintiff argues that the trial court erred by granting summary judgment
for Defendant and against Plaintiff. Specifically, Plaintiff maintains the trial court
erred because it is not practicable to conduct the LLC in conformity with the
operating agreement. Plaintiff also maintains that liquidation is necessary to protect
his rights and interests. We address each contention in turn.
This case presents cross-motions for summary judgment. N.C. Gen. Stat. § 1A-
1, Rule 56 (2025) provides the rules and procedures pertaining to summary judgment
in North Carolina. Rule 56 states that summary judgment “shall be rendered
forthwith if the pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there is no genuine issue as to any
material fact and that any party is entitled to a judgment as a matter of law.” N.C.
Gen. Stat. § 1A-1, Rule 56(c) (2025).
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“[A] fact is ‘material’ if it would constitute or irrevocably establish any material
element of a claim or a defense.” Lowe v. Bradford, 305 N.C. 366, 369, 289 S.E.2d
363, 366 (1982). On the other hand, “[a] ‘genuine issue’ is one that can be maintained
by substantial evidence.” Dobson v. Harris, 352 N.C. 77, 83, 83, 530 S.E.2d 829, 835,
835 (2000) (quoting Kessing v. Nat’l Mortg. Corp., 278 N.C. 523, 534, 180 S.E.2d 823,
830 (1971)); see generally DeWitt v. Eveready Battery Co., 355 N.C. 672, 681, 565
S.E.2d 140, 146 (2002) (“Substantial evidence is such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion and means more
than a scintilla or a permissible inference[.]” (citation modified)).
“The party moving for summary judgment bears the burden of bringing forth
a forecast of evidence which tends to establish that there is no triable issue of material
fact.” Creech v. Melnik, 347 N.C. 520, 526, 495 S.E.2d 907, 911 (1998); see also Liberty
Mut. Ins. Co. v. Pennington, 356 N.C. 571, 579, 573 S.E.2d 118, 124 (2002) (“The party
seeking summary judgment bears the initial burden of demonstrating the absence of
a genuine issue of material fact.” (citation omitted)). “The movant is entitled to
summary judgment . . . when only a question of law arises based on undisputed
facts.” Daughtridge v. Tanager Land, LLC, 373 N.C. 182, 186, 835 S.E.2d 411, 415
(2019) (quoting Ussery v. Branch Banking & Tr., 368 N.C. 325, 335, 777 S.E.2d 272,
278 (2015)); see also Parkes v. Hermann, 376 N.C. 320, 323, 852 S.E.2d 322, 324
(2020). Indeed, the purpose of summary judgment “is to eliminate formal trials where
only questions of law are involved.” Kessing, 278 N.C. at 534, 180 S.E.2d at 830.
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The showing required for summary judgment “may be accomplished by proving
an essential element of the opposing party’s claim does not exist, cannot be proven at
trial, or would be barred by an affirmative defense, or by showing through discovery
that the opposing party cannot produce evidence to support an essential element of
her claim.” Dobson, 352 N.C. at 83, 530 S.E.2d at 835; see also Bernick v. Jurden, 306
N.C. 435, 440–41, 293 S.E.2d 405, 409 (1982). “Generally[,] this means that on
‘undisputed aspects of the opposing evidential forecast,’ where there is no genuine
issue of fact, the moving party is entitled to judgment as a matter of law.” Lowe, 305
N.C. at 369, 289 S.E.2d at 366 (citation omitted).
That said, “all inferences of fact . . . must be drawn against the movant and in
favor of the party opposing the motion.” Caldwell v. Deese, 288 N.C. 375, 378, 218
S.E.2d 379, 381 (1975) (citations omitted). In other words, “[t]he court must view the
evidence presented by both parties in the light most favorable to the nonmoving
party.” Wilmington Star-News v. New Hanover Reg’l Medical Ctr., 125 N.C. App. 174,
178, 480 S.E.2d 53, 55 (1997) (citation omitted).
When “the moving party meets this burden, the non-moving party must in turn
either show that a genuine issue of material fact exists for trial or must provide an
excuse for not doing so.” Lowe, 305 N.C. at 369, 289 S.E.2d at 366. If a motion for
summary judgment is made and supported as provided in Rule 56:
[A]n adverse party may not rest upon the mere allegations
or denials of his pleading, but his response, by affidavits or
as otherwise provided in this rule, must set forth specific
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facts showing that there is a genuine issue for trial. If he
does not so respond, summary judgment, if appropriate,
shall be entered against him.
N.C. Gen. Stat. § 1A-1, Rule 56(e) (2025). But “[i]f the moving party fails to meet his
burden, summary judgment is improper regardless of whether the opponent
responds. The goal of this procedural device is to allow penetration of an unfounded
claim or defense before trial.” Lowe, 305 N.C. at 369, 289 S.E.2d at 366 (citation
omitted). Similarly, “[i]f there is any question as to the credibility of witnesses or the
weight of evidence, a summary judgment should be denied[.]” Kessing, 278 N.C. at
535, 180 S.E.2d at 830 (citation omitted).
“The standard of review of an appeal from summary judgment is de novo.”
Morrell v. Hardin Creek, Inc., 371 N.C. 672, 680, 821 S.E.2d 360, 366 (2018); see also
Forbis v. Neal, 361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007). “Likewise, whether
the language of a contract is ambiguous is a question of law to be reviewed de novo.”
Morrell, 371 N.C. at 680, 821 S.E.2d at 366; see generally N. Carolina State Bar v.
Merrell, 243 N.C. App. 356, 370, 777 S.E.2d 103, 114 (2015) (“An operating agreement
is a contract[.]”). “ ‘Under a de novo review, the court considers the matter anew and
freely substitutes its own judgment’ for that of the lower tribunal.” Craig v. New
Hanover Cnty. Bd. of Educ., 363 N.C. 334, 337, 678 S.E.2d 351, 354 (2009) (citations
omitted). Again, “[a] ruling on a motion for summary judgment must consider the
evidence in the light most favorable to the non-movant, drawing all inferences in the
non-movant’s favor.” Morrell, 371 N.C. at 680, 821 S.E.2d at 366. However, as
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judicial dissolutions are discretionary, we review the trial court’s decisions to dissolve
an LLC for abuse of discretion. See Chisum v. Campagna, 376 N.C. 680, 699, 855
S.E.2d 173, 187 (2021). Under this standard, the trial court will not be overturned
for an abuse of discretion “in the absence of a showing that its ruling was manifestly
unsupported by reason and could not have been the result of a reasoned decision.”
Id.
In this case, Plaintiff sought judicial dissolution of an LLC. With respect to
judicial dissolution, the North Carolina Limited Liability Company Act (the “Act”)
provides that: “If after a hearing the court determines that one or more grounds for
judicial dissolution described in G.S. 57D-6-02 exist and the alternative to judicial
dissolution under G.S. 57D-6-03(d) is not applicable, it may enter a decree dissolving
the LLC . . . .” N.C. Gen. Stat. § 57D-6-05(a) (2025) (emphasis added). As discussed,
the ultimate decision to judicially dissolve an LLC is discretionary and thus is
reviewed for abuse of discretion. See Chisum, 376 N.C. at 699, 855 S.E.2d at 187.
Turning to the grounds for judicial dissolution, the Act provides that:
The superior court may dissolve an LLC in a proceeding
brought by either of the following:
(1) The Attorney General, if it is established that (i)
the LLC obtained its articles of organization through fraud
or (ii) the LLC continued to exceed or abuse the authority
conferred on it by law 20 or more days after the date the
Attorney General delivered to the LLC written notice of the
LLC’s unauthorized acts.
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(2) A member, if it is established that (i) it is not
practicable to conduct the LLC’s business in conformance
with the operating agreement and this Chapter or (ii)
liquidation of the LLC is necessary to protect the rights and
interests of the member.
N.C. Gen. Stat. § 57D-6-02 (2025).
As discussed, Plaintiff asserts it is not practicable to conduct the LLC in
conformity with the operating agreement and that liquidation is necessary to protect
his rights and interests. We therefore consider both N.C. Gen. Stat. § 57D-6-02(2)(i)
and (ii).
1. Practicability of Conducting the LLC
With respect to whether “it is not practicable to conduct the LLC’s business in
conformance with the operating agreement,” the North Carolina Supreme Court has
held that “ ‘not practicable,’ as used in N.C.G.S. § 57D-6-02(2)(i), means unfeasible.”
N.C. Gen. Stat. § 57D-6-02(2)(i); James H.Q. Davis Tr. v. JHD Props., LLC, 387 N.C.
19, 26, 910 S.E.2d 652, 658 (2025). In doing so, the Court elaborated that
“ ‘practicable’ is synonymous with ‘feasible’ and does not mean simply ‘possible.’
Something may be possible but not feasible without extra time or resources in a
certain circumstance. By that same logic, ‘not practicable’ is synonymous with
‘unfeasible’ and does not mean ‘impossible.’ ” Id.
After reviewing persuasive authority, the Court adopted the following factors
to determine whether it is “not practicable” for the
managers to continue operating [an] LLC[ ] . . . : (1)
whether the management of the company is unable or
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unwilling to work together to reasonably engage in or
promote the purpose for which the company was formed;
(2) whether there is deadlock between the managers [or
members within a member-managed LLC]; (3) whether the
operating agreement provides a means of navigating
around such deadlock; (4) whether, due to the company’s
financial position, there is still a business to operate; (5)
whether continuing the company is financially feasible;
and (6) whether a member or manager has engaged in
misconduct.
Id. at 29, 910 S.E.2d at 660. Notably, courts “are not constrained by any one factor
and do not need to find that all of these factors apply to conclude that it is ‘not
practicable’ to operate an LLC in accordance with its operating agreement.” Id.
Instead, the Court noted that these factors should be weighed “to determine if judicial
dissolution is an appropriate remedy.” Id.
In James, a father established four trusts, one for each of his sons, and two
LLCs as part of his estate plan. Id. at 20, 910 S.E.2d at 655. The LLCs owned
approximately 68 acres of undeveloped land. Id. Each trust owned a 25% interest in
both LLCs, and two of the brothers served as the LLCs’ managers. Id. “Under the
nearly identical operating agreements . . . , neither LLC [could] take binding action
without a majority of the managers coming to an agreement.” Id. Thus, the operating
agreements “effectively require[d] unanimous agreement of the two managers.” Id.
Additionally, the operating agreement provided that “[t]he purpose and business of
the LLCs shall be to engage in the purchase, development, rental, ownership and sale
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of real property and in any other lawful business for which the limited liability
companies may be organized under the Act.” Id. at 20–21, 910 S.E.2d at 655.
The two managers disagreed on the use and disposition of the property held
within the LLCs. Id. at 21, 910 S.E.2d at 655. One manager along with the two other
members wished to sell the property, while the other manager consistently opposed
selling to any outside party. Id. at 21, 910 S.E.2d at 656. The opposing manager
believed that he had no obligation to consider or approve a sale and instead urged the
LLCs to “ ‘stay the course with their existing businesses, consider new or additional
types of business activities, or that the LLCs should negotiate a deal’ for him to
purchase the [p]roperty.” Id. The manager who wished to sell sought judicial
dissolution under N.C. Gen. Stat. § 57D-6-02(2)(i). Id. at 22, 910 S.E.2d at 656. After
cross-motions for summary judgment were filed, the trial court granted plaintiffs’
motion since
the managers of the LLCs were unable to agree “on the use
or disposition of the Property and were unable to reach
agreement for at least three years, that there was no
mechanism in the [o]perating [a]greements to break the
deadlock, that the LLCs had not conducted any
economically useful activity since 2004, and that there was
no way for the LLCs to conduct any business, realize any
profit, or dispose of any assets so long as the unbreakable
deadlock persisted.” Based on these findings, the Business
Court concluded that it was not practicable to conduct the
LLCs’ business in conformance with the [o]perating
[a]greements, and therefore, judicial dissolution was
appropriate.
Id. at 22–23, 910 S.E.2d at 656–57 (citation modified).
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Opinion of the Court
The North Carolina Supreme Court held that “[t]he absence of a mechanism to
break the managerial deadlock present . . . made it “not practicable” for the managers
to operate the LLCs in accordance with the [o]perating [a]greements.” Id. at 33, 910
S.E.2d at 663. First, the Court agreed with the trial court that the operating
agreements showed the property “was to be used as an active real estate business in
order to maximize its value.” Id. at 30, 910 S.E.2d at 661. It reasoned that the
operating agreement’s active language providing “ ‘purchase, development, rental,
ownership and sale’ clearly demonstrate that the estate plan was intended to be used
to provide monetary value . . . through an active real estate business.” Id. The Court
further reasoned that “[f]or these LLCs to engage in active use of the [p]roperty, there
must at least be an opportunity for the LLCs to develop, rent, sell, or otherwise make
use of the land.” Id. After reviewing the record, the Court concluded the evidence
demonstrates that management “is unable or unwilling to work together to
reasonably engage in or promote the purpose for which the company was formed”;
that although both managers expressed a desire to resolve their disagreement, their
actions prove otherwise with a resulting deadlock; and that the operating agreements
“provide[d] no mechanism to break this deadlock” especially given its requirement of
unanimous consent which placed the managers at an unbreakable impasse. Id. at
33, 910 S.E.2d at 662–63.
Likewise, in Chisum, the North Carolina Supreme Court affirmed the
dissolution of an LLC with the following findings of fact:
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BRINKLEY V. MJM WILDLIFE, LLC
Opinion of the Court
a. The [defendants] and [the plaintiff] had no direct
contact or communications with one another from
approximately October of 2010, when [the plaintiff]
walked out of the [members meeting of a third LLC],
and the filing of [the] lawsuit in July 2016.
b. The [defendants] treated [the plaintiff] as if his
membership interests in [the LLCs] had been
extinguished beginning in July 2012, but never
communicated to [the plaintiff] that they considered
his memberships terminated. [One of the
defendants] admitted [the plaintiff] did not fail to
meet a capital call or take any specific action which
would have terminated [the plaintiff’s] membership
in [one of the LLCs].
c. The [defendants] filed documents with the Secretary
of State of North Carolina representing that [one of
the LLCs] was dissolved without notifying [the
plaintiff], seeking his consent, or making any
distribution to [the plaintiff].
d. The [defendants] ceased providing [the plaintiff]
with required report and financial information
regarding [the LLCs].
e. [The plaintiff’s] wife . . . testified that she attempted
to visit the [defendants’] offices sometime in 2012–
2013 to get information regarding the LLCs, but that
[one of the defendants] ordered her to leave the
premises in a threatening manner.
Chisum, 376 N.C. at 714, 855 S.E.2d at 196. Given the “level of acrimony and
distrust,” the trial court was “convinced that these parties could not ever again be
associated with one another in a jointly owned business, let alone conduct the
business of [the LLCs].” Id. at 714–15, 855 S.E.2d at 196–97. The North Carolina
Supreme Court held there was “ample support for a determination that it is not
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Opinion of the Court
practicable to conduct the LLCs’ business in conformance with the operating
agreement . . . and that the [trial court] properly ordered the judicial
dissoluti