Klein v. Sussman

In 2018, carpenter John Klein (plaintiff) and real estate agent Jill Sussman (defendant) agreed to form a Delaware limited-liability company (LLC) to flip houses. Klein had tax issues that hindered his credit but could provide funding for purchase deposits. On March 25, Sussman emailed Klein an operating agreement for an LLC named DOUBLE J.R. LLC, which stood for Jill and John’s rentals, and noted that they could tweak the agreement if needed. The agreement identified Klein and Sussman as each owning a 50 percent membership interest. On March 29, Sussman asked Klein whether he had reviewed the agreement. Klein claimed they met outside Sussman’s house later that day and executed the agreement, with Sussman promising to send Klein an executed copy, which she did not. Sussman denied that meeting. On April 11, Sussman texted Klein that she would complete the LLC’s formation and then they would need to open a bank account for the LLC. Later that day, she filed a certificate of formation. It did not identify the LLC’s members or managers. On April 30, the LLC purchased its first property, with Klein and Sussman both attending the closing and signing documents on the LLC’s behalf as members. The LLC subsequently purchased other properties, with Klein consistently providing the down-payment funding. In 2019, Klein’s and Sussman’s relationship deteriorated, prompting Sussman to claim that Klein was never a member or manager in the LLC. She claimed that the parties intended for Klein to have only the potential to become a member after he resolved his tax issues. Klein sued Sussman, seeking a declaration that he was a 50 percent member and manager of the LLC.