Lieberman v. Wyoming.Com LLC

82 P.3d 274 (2004)

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Nature of the Case

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Facts

Steve and Sandra Mossbrook, and D created Wyoming.com LLC Initial capital contributions to Wyoming.com were valued at $50,000. D was vested with an initial capital contribution of $20,000, to consist of services rendered and to be rendered. D's contribution represented a 40% ownership interest in the LLC. The Mossbrooks were vested with the remaining $30,000 capital contribution and 60% ownership interest. In August of 1995, the Articles were amended to reflect an increase in capitalization to $100,000. The increase in capitalization was the result of the addition of two members, each of whom was vested with a capital contribution of $25,000, representing a 2.5% ownership interest for each new member. D's ownership interest, as well as his stated capital contribution, remained the same. D was terminated as vice president of Wyoming.com and required to leave the business premises. D then served Wyoming.com and its members with a document titled 'Notice of Withdrawal of Member Upon Expulsion: Demand for Return of Contributions to Capital.' D demanded the immediate return of 'his share of the current value of the company,' estimating the value of his share at $400,000, 'based on a recent offer from the Majority Shareholder.' P accepted the withdrawal. They also approved the return of the $20,000, but D refused. P filed a declaratory action and D filed an action for dissolution. The court rules for P and allowed P to continue in business and to return D’s stated capital contribution. D appealed. The court held that D was entitled to the return of his capital contribution, regardless of his status as a member of Wyoming.com. The case was remanded to determine the true value of D's membership. No new evidence was introduced. P relied upon language in the Operating Agreement to argue that D's equity interest should be limited to the value of his capital account. The district court agreed and also determined that D's equity interest should be valued as of the date of his withdrawal as a member. D appealed again.