Court of Appeals of Missouri, Southern District, Second Division
CYNTHIA J. UNDERWOOD, Plaintiff-Appellant,
KAHALA, LLC, ROBERT W. NUNN, and ROBERT C. BLAIR, Defendants-Respondents.
FROM THE CIRCUIT COURT OF GREENE COUNTY Honorable Jason R.
Brown, Circuit Judge
REVERSED AND REMANDED FOR FURTHER
WILLIAM W. FRANCIS, JR., J.
J. Underwood ("Underwood") appeals the trial
court's judgment dismissing her first amended petition,
pursuant to motions to dismiss filed jointly by Robert W.
Nunn and Robert C. Blair ("Nunn and Blair"), and
separately by Kahala, LLC ("Kahala") (collectively
"Respondents"). On appeal, Underwood asserts the
trial court erred in sustaining the motions to dismiss. We
reverse and remand for further proceedings consistent with
and Procedural History
"facts"-for purposes of our review-are the factual
averments in Underwood's amended petition. See Ward
v. West County Motor Co., Inc., 403 S.W.3d 82, 84 (Mo.
banc 2013). We recite such other facts as are necessary for
November 13, 2013, Underwood, Nunn and Blair formed Kahala.
Underwood, Nunn, and Blair were equal members of Kahala,
each holding a 33-1/3 percent ownership interest. The parties
also executed an "Operating Agreement."
was the owner of real estate that it leased to American
Professional Driver Academy, LLC ("APDA").
Underwood operated and managed APDA. Underwood, Nunn, and
Blair were also the sole members of APDA.
November 6, 2015, Nunn and Blair filed a lawsuit in the
Circuit Court of Greene County, entitled Robert W. Nunn
and Robert C. Blair v. Cynthia J. Underwood and Kahala,
LLC, Case No. 1531-CC01365. In the petition, Nunn and
Blair sought judicial dissolution of Kahala, "[i]n
accordance with the provisions of Section 347.143.2 RSMo.,
" for Underwood's failure "to
properly manage and operate APDA[.]" Nunn and Blair
asserted they were the holders of "a majority of the
membership interests in [Kahala]; and, by reasons thereof,
have the authority to make all decisions of [Kahala, ]"
in reliance on Article II of the Operating Agreement.
petition also asserted, in part, that: (1) Nunn and Blair had
"contributed substantial sums of money toward the
acquisition of the assets of [Kahala], but [Underwood] had
made no financial contributions, or no substantial
contributions toward the acquisition of same"; (2)
Nunn and Blair filed a separate lawsuit in Greene County
"to dissolve APDA as a result of the failure of
[Underwood] to properly manage and operate APDA"; (3)
if APDA no longer conducted business, then Kahala could
"no longer have a tenant or lessee from which to receive
rental or lease payments[, ]" and it could not pay
expenses involved in maintaining the real estate without
loans or contributions from Nunn, Blair, and/or Underwood;
and (4) it was "not reasonably practical to continue to
own and to hold the real property owned by [Kahala], so that
[Kahala] should be dissolved under supervision" of the
lawsuit remained pending for 120 days at which time Nunn and
Blair voluntarily dismissed the suit.
5, 2017, Underwood filed a four-count "Petition for
Judicial Dissolution" against Kahala, Nunn, and Blair.
That petition was amended on August 23, 2017. In her
"First Amended Petition," Underwood asserted that
Nunn and Blair had constructively expelled Underwood as a
member of Kahala; barred Underwood from the records and
premises of APDA; and withheld Underwood's
"distribution of her share of the profits and/or other
tax attributes of [Kahala]."
Count I (Breach of Contract), Underwood asserted that Nunn
and Blair breached the Operating Agreement by expelling
Underwood as a member on March 6, 2016, without the written
consent of all the members; by dissolving Kahala without the
withdrawal of any member; by continuing to carry on the
business after the purported dissolution; by denying
Underwood access to Kahala's books and records; by
denying Underwood access to the business premises of Kahala;
and by failing to pay Underwood the value of her membership
interest. Underwood requested relief by way of judgment
against Nunn and Blair, individually, in an undetermined
amount equal to her actual damages, plus 9 percent interest
from March 6, 2016, through the date of judgment.
Count II (Tortious Interference with Contract), Underwood
asserted Nunn and Blair had caused Kahala to breach and/or
terminate its contract with her by filing a lawsuit seeking
dissolution of Kahala, dismissing the lawsuit, and then
claiming the lawsuit was Underwood's withdrawal from
Kahala. Underwood requested relief by way of
judgment against Nunn and Blair, individually, in an
undetermined amount equal to her actual damages, plus 9
percent interest from March 6, 2016, through the date of
judgment, and punitive damages.
Count III (Breach of Fiduciary Duty), Underwood asserted that
Nunn and Blair, as majority members of Kahala, breached their
fiduciary duty by expelling Underwood as a member on March 6,
2016, without the written consent of all the members; by
continuing to carry on the business after the purported
dissolution; by denying Underwood access to Kahala's
books and records; by denying Underwood access to the
business premises of Kahala; by failing to pay Underwood the
value of her membership interest; and by filing a lawsuit
seeking dissolution of Kahala, dismissing the lawsuit, and
then claiming the lawsuit was Underwood's withdrawal from
Kahala. Underwood requested relief by way of judgment against
Nunn and Blair, individually, in an undetermined amount equal
to her actual damages, plus 9 percent interest from March 6,
2016, through the date of judgment, and for punitive damages.
Count IV (Action for Judicial Dissolution), Underwood
asserted that Nunn and Blair exceeded the authority conferred
upon them by law; carried on, conducted and/or transacted
business of Kahala in a fraudulent and/or illegal manner; and
abused their powers contrary to public policy of the state of
Missouri. Underwood requested relief by way of judgment
dissolving Kahala, liquidation of Kahala's assets, and
judgment against Nunn and Blair, individually, in an
undetermined amount equaling the value of her 33-1/3 percent
ownership interest, plus 9 percent interest from March 6,
2016, through the date of judgment.
September 21, 2017, Nunn and Blair filed a joint motion to
dismiss Underwood's First Amended Petition, along with
suggestions, asserting Underwood did not have legal capacity
to sue, pursuant to Rule 55.27(a)(3),  and that
Underwood failed to state a claim upon which relief could be
granted, pursuant to Rule 55.27(a)(6). In their suggestions
in support, Nunn and Blair asserted they had filed a petition
on November 6, 2015, requesting judicial dissolution of
Kahala due to Underwood's failure to properly operate and
manage APDA. Nunn and Blair argued that "120 days after
the commencement of the lawsuit discussed above,"
Underwood "ceased to be a member of [Kahala], and the
company was dissolved[, ]" pursuant to section
347.123(5). Exhibits A and B (the alleged Nunn and
Blair petition, and the alleged Operating Agreement,
respectively) were attached to the suggestions.
and Blair further argued that Article V of the Operating
Agreement provided that "[Kahala] is dissolved upon the
withdrawal of any member[, ]" and that upon dissolution,
the company "continues until the winding up of the
affairs of the Company is completed and articles of
termination have been filed with the Secretary of
and Blair also asserted that Kahala was "in the
'winding up' phase" and that they were
"following all Missouri laws and abiding by the
filed a separate motion to dismiss that incorporated the
suggestions of Nunn and Blair.
October 31, 2017, the trial court heard argument on the
motions to dismiss, and took the matter under advisement. The
trial court requested additional suggestions from the
their supplemental suggestions, Nunn and Blair again
incorporated a copy of their petition filed in Nunn v.
Underwood, et al., Case No. 1531-CC01365, and reiterated
some of the same arguments made in their initial suggestions.
and Blair made additional arguments concerning the effect of
section 347.123(5), the language of the Operating Agreement;
the Missouri Limited Liability Company Act
("MLLCA"); and Underwood's rights as an
"assignee" under section 347.121(3).
suggestions in opposition to the motions to dismiss addressed
"the issue of the construction and intent of Section
347.123(5)." Underwood argued that the statute
"must not be read to provide a nonsensical result[,
]" because the "rule of statutory construction,
alone, resolves the issue before the Court." Underwood
argued that it would be "nonsensical" that the
legislature would have intended to allow "any managing
member of a limited liability company in Missouri to bring a
dissolution action against the company, name the other . . .
managing members as defendants, seek no relief against any of
his/her fellow managing members, and somehow become the sole
decision maker on behalf of the company simply by keeping
his/her dissolution alive for 120 days[, ] and "would
also be inconsistent with the statutory duty each managing
member owes to all members of a limited liability company[,
]" under section 347.088.
trial court entered its judgment on November 21, 2017,
sustaining the motions to dismiss. ...