Argued, May 21, 2014
Appeal from the Judgment of the Court of Common Pleas, Montgomery County, Civil Division, No(s): 2006-30412. Before TILSON, J.
Elizabeth D. Lubker, Paoli, for appellant.
H. Jeffrey Brahin, Doylestown, for 200 East Airy Street and Green and Airy Laundromat, appellees.
Samantha A. Millrood, Jenkintown, for Holohan, appellee.
BEFORE: PANELLA, J., LAZARUS, J., and JENKINS, J.
Michael Staiger appeals from the judgment entered on December 24, 2013, in the Court of Common Pleas of Montgomery County, which denied his post-trial motion to remove the judgment of nonsuit entered against him on April 3, 2012. After careful review, we reverse and remand for the trial court to hold a new trial.
Staiger and Kevin Holohan are business partners, each fifty-percent members of two limited liability companies, Appellants 200 E. Airy, LLC and Green & Airy Laundromat, LLC. Staiger provided $165,000 in start-up capital for 200 E. Airy, LLC. According to an investment agreement signed by the parties on May 26, 2003, this start-up capital amount was to be repaid to Staiger within four years. On May 30, 2003, Staiger and Holohan formed 200 E. Airy, LLC and executed an operating agreement for the purpose of developing the property at 200 E. Airy Street, Norristown, Pennsylvania. The parties renovated the property for the operation of a laundromat and convenience store. On December 23, 2004, after the renovation had been completed, Staiger and Holohan formed Green and Airy, LLC for the purpose of operating the laundromat. The operating agreement for Green and Airy, LLC and the operating agreement for 200 E. Airy, LLC contain identical language indicating that the members have the authority to make business decisions and the decisions of a majority are controlling.
Staiger and Holohan signed a management agreement for Green and Airy, LLC on May 13, 2005, which provided that an unnamed LLC of Holohan's was to manage Green and Airy, LLC for a fee for an initial term of five years, then continue for two additional five-year periods. However, the business relationship between Staiger and Holohan deteriorated, such that in 2006 they exchanged emails in which they agreed to dissolve their partnership. Despite agreeing they did not wish to continue doing business together, the parties were unsuccessful in negotiating a buy-out agreement. Since then, Holohan has unilaterally operated the LLCs, to the extent that " [Staiger] will not receive any further money nor information regarding the operations of the business." Plaintiff's Exhibit 11. Holohan has allegedly refused to repay Staiger for his initial investment. Holohan also hired legal counsel for the LLCs and caused the LLCs to pay for his personal legal fees without Staiger's consent. Staiger thus asserts that he has been " frozen out" from operating the LLCs and receiving any return on his investment.
On January 16, 2007, Staiger commenced the instant action by filing a complaint seeking judicial dissolution of the LLCs. The LLCs were declared to be indispensable parties by order dated March 25, 2010, and, thereafter, Staiger joined the LLCs as additional defendants to the action. On January 17, 2012, Staiger filed a motion for summary judgment. Without ruling on the motion, the trial court commenced a bench trial on April 2, 2012. After Staiger presented his evidence, Holohan moved for a nonsuit, which the trial court granted.
Staiger then filed a post-trial motion seeking to remove the nonsuit. On September 21, 2012, the trial court entered an order granting Staiger's post-trial motion, vacating the order granting the nonsuit, granting Staiger's motion for summary judgment, ...