Stephen Bushi, M.D. v. Sage Health Care, PLLC

Stephen Bushi (plaintiff), a psychiatrist, was a member of Sage Health Care, PLLC (Sage) (defendant), a limited-liability company (LLC), along with three other psychiatrists, Charles C. Novak, David A. Kent, and Roberto Negron (defendants). Sage’s operating agreement set forth various grounds for member dissociation and the method for calculating the value of a member’s interest upon dissociation. The operating agreement also provided the procedure by which the operating agreement could be amended. Bushi began dating a nurse practitioner employed by Sage and took out what he believed to be a personal loan on Sage’s business line of credit with a bank. Fearing that he would be forced out of Sage, Bushi began working for a competitor. At a member meeting, Novak, Kent, and Negron voted to amend the operating agreement to require the mandatory dissociation of a member upon an affirmative vote by a majority of the members. Following the amendment, Novak, Kent, and Negron voted to compel Bushi’s dissociation from Sage. Bushi was presented with checks for the value of Bushi’s membership interest, pursuant to the formula set forth in the operating agreement, but Bushi refused to accept the checks. Sage, Novak, Kent, and Negron sued Bushi for taking out the personal loan but withdrew the suit after Bushi repaid the loan. Bushi filed suit, asserting a claim for breach of fiduciary duty and arguing that the other members’ conduct in forcing Bushi out of Sage was motivated by financial gain. Sage, Novak, Kent, and Negron motioned for summary judgment on the grounds that the acts taken against Bushi complied with Sage’s operating agreement. The trial court granted the motion. Bushi appealed.