Connors v. Howe Elegant, LLC

In February 2001, beauticians Rosa Connors (plaintiff) and Jennifer Kiman (defendant) created Howe Elegant, LLC (Howe) (defendant). Connors and Kiman were Howe’s sole members, and Howe employed six other employees on a commission basis. Connors, Kiman, and Howe’s other employees all brought their own clients to Howe. In February 2005, Connors and Kiman decided to end their partnership after an argument. In March 2005, Connors told Kiman that she would be starting a new business, Sona Bella Salon and Spa, LLC (Sona Bella). Howe’s employees told Connors that they would be joining her at Sona Bella. Howe’s employees also began talking to their customers about going to Sona Bella, and Connors used Howe’s customer information to mail information about Sona Bella to Connors’s customers and the employees’ customers. Connors made a copy of Howe’s appointment book and sold a gift certificate for Sona Bella while she was still working at Howe. Throughout this time, Connors and Kiman discussed how they would dissolve Howe but could not agree on terms. On May 19, 2005, Kiman changed the locks to Howe’s premises and refused to provide Connors with a key. Kiman then stopped doing business at Howe’s premises under the Howe name and started doing business as Jennifer Lee, LLC. Kiman assumed the lease, took over Howe’s bank account, and transferred the $23,000 in the account to a new account. Kiman used the money to pay Howe’s obligations and a small-business loan that Connors and Kiman had obtained for Howe. Connors sued Kiman and Howe, asserting claims for breach of contract and various torts based on Kiman transferring inventory, equipment, and the lease to Jennifer Lee, LLC and locking Connors out of Howe. Kiman and Howe asserted a counterclaim against Connors for breach of fiduciary duties, asserting that Connors’s actions had caused Howe to lose customers and sales and suffer damage to its business reputation. Following a bench trial, the trial court ruled on (1) whether Connors had standing to bring the tort claims in her individual capacity and (2) whether Connors had breached any fiduciary duties to Howe.