Sunday, November 24, 2013

McConnell v. Hunt Sports Enterprises case brief

McConnell v. Hunt Sports Enterprises case brief summary
725 N.E.2d 1193 (Ohio App. 1999)


CASE SYNOPSIS
Franklin County Court of Common Pleas (Ohio) held that appellees did not wrongfully obtain hockey franchise because operating agreement of appellant limited liability company (LLC) unambiguously allowed appellees to compete. Finding appellants breached agreement by unilaterally rejecting arena lease proposal and usurping control of LLC, court awarded attorney fees to appellees under Declaratory Judgments Act, Ohio Rev. Code Ann. § 2721.09.

CASE FACTS
After breaking away from original limited liability company (LLC), appellees obtained National Hockey League (NHL) franchise. Appellees sought declaratory judgment that LLC operating agreement permitted members to compete for NHL franchise as well as judicial dissolution of LLC. Appellants' counterclaim alleged interference with prospective business relationships and breach of contract and fiduciary duty.

DISCUSSION

  • After declaring that operating agreement unambiguously allowed competition, the trial court granted appellant's voluntary dismissal of counterclaim. 
  • Trial court later declared that appellees had not violated any fiduciary duties or committed any tortious or wrongful acts, holding that appellants breached operating agreement by unilaterally rejecting arena lease proposal and usurping control of LLC. 
  • Further, trial court awarded attorney fees to appellees under Declaratory Judgments Act, Ohio Rev. Code Ann. § 2721.09. 
  • Except for award of attorney fees and costs, court affirmed lower court's judgment. 
  • Although appellants' rejection of lease did not wrongfully cause dissolution of LLC, court approved dissolution because it was no longer practicable to carry on LLC business.

CONCLUSION
Court affirmed lower court judgments in appellees' favor, holding that operating agreement of appellant limited liability company (LLC) allowed appellee members to compete for hockey franchise. Court approved dissolution of LLC because it was no longer reasonably practicable to carry on LLC business even though appellants' rejection of lease did not wrongfully cause dissolution. Court reversed award of attorney fees and costs to appellee.

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