Gagne v. Gagne

459 P.3d 686 (2019)

From our private database of 45,900+ case briefs, written and edited by humans—never with AI.

Gagne v. Gagne

Colorado Court of Appeals
459 P.3d 686 (2019)

KD

Facts

Paula Gagne (defendant) and her son, Richard Gagne (plaintiff), were the only members of four limited-liability companies. Paula and Richard formed each limited-liability company (LLC) with the intent that Paula would buy apartment complexes and that Richard would manage them. Under the operative operating agreements, Paula and Richard owned the LLCs 50/50, but Paula had 51 percent of the voting rights. Paula and Richard’s relationship deteriorated to the point that Richard sued to dissolve the LLCs pursuant to a Colorado statute that provided that an LLC could be dissolved in a proceeding by or for a member or manager of the LLC if it was not reasonably practicable to carry on the LLC’s business in conformity with its operating agreement. Richard also sought a declaration of the parties’ rights and obligations. Both parties were dissatisfied with the results of the first trial and appealed to the Colorado Court of Appeals. In an earlier opinion known as Gagne I, the appellate court had found that the trial court applied the wrong test to determine whether dissolution was proper. The appellate court articulated the proper test, which involved the consideration of seven nonexclusive factors: (1) whether the LLC’s managers were unable or unwilling to pursue the LLC’s purpose; (2) whether a member or manager had committed misconduct; (3) whether the members were unable to work together to pursue the LLC’s purpose; (4) whether the members were deadlocked; (5) whether the operating agreement provided a means of resolving a deadlock; (6) whether, given the LLC’s finances, there remained a company to operate; and (7) whether continuation was financially feasible. After considering these factors, the trial court found that dissolution was warranted and entered an order setting forth how dissolution would proceed. The trial court found that the LLCs had failed their purposes because Paula refused to give Richard any role in managing the properties. Moreover, Paula and Richard could not work together. The court also found that Paula had engaged in serious misconduct by, among other things, reimbursing herself from LLC funds for extravagant personal expenses. Finally, the court found that Paula and Richard were deadlocked, with no apparent way around the deadlock. Paula appealed to the Colorado Court of Appeals.

Rule of Law

Issue

Holding and Reasoning (Jones, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 741,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 741,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 45,900 briefs, keyed to 984 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 741,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 45,900 briefs - keyed to 984 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership