Grove v. Brown

Marlene and Larry Grove (plaintiffs) and Melba and Hubert Brown (defendants) started home-healthcare agency Heartfelt Home Health, LLC (Heartfelt). Heartfelt succeeded for a year until disputes arose preparing its first tax returns. The operating agreement said each member owned 25 percent of Heartfelt and would contribute $10,000 initial capital and share profits equally. When Heartfelt’s accountant discovered not all four members contributed $10,000, the parties began disputing their ownership, and working relations soured. The Groves established other home-healthcare agencies Home MD and Home DE in Maryland and Delaware, respectively, without telling the Browns. Meanwhile, the Browns claimed 63 percent ownership of Heartfelt because of the disparate capital contributions and attempted to remove the Groves by creating another limited-liability company, Heartfelt II, owned by only the Browns, and purporting to merge Heartfelt with it. Marlene Grove learned about the merger when she was physically barred from entering Heartfelt’s offices. The Groves sued asserting that their 50 percent ownership made the merger invalid, while the Browns counterclaimed that they owned 63 percent and the Groves had breached fiduciary duties by usurping Heartfelt’s opportunity to expand into Maryland and Delaware. After a three-day trial, the court issued its written opinion.