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Corporate — LLC Operating Agreements – Member’s Death – Dissolution – Estate’s Interest

Although there were only two members of the three defendant-limited liability companies at the time their founder died, their operating agreements included a member’s death as a mandatory dissolution event “unless within 90 days following the occurrence, the Members mutually agree in writing otherwise.” Once the founding member died, the surviving member could not “mutually agree” with himself to continue to operate the LLCs.

The court grants the defendant-estate’s motion for judgment on the pleadings and dissolves the defendant LLCs.

Nothing in the language of the operating agreements establishes that the parties intended for the number of members in the LLCs to be capped at two. Indeed, defendant Wendover Donuts, LLC, had a third member for a short period of time.

Although a jury might decide that some of the provisions of the operating agreements could be read to transfer the interest of a deceased member to his estate, but the court does not find the language sufficiently clear to declare this as a matter of law. The court declines to declare that the decedent’s estate is a member of the LLCs.

Agarwal v. Estate of Agarwal 2022 NCBC 7.pdf ( (Lawyers Weekly No. 020-007-22, 17 pp.) (Julianna Theall Earp, J.) William West for plaintiff; Kevin Rust for the estate. 2022 NCBC 7

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