Adelsperger v. Elkside Dev. LLC

“ORS 63.165 immunizes members and managers of an LLC from vicarious liability for the debts, obligations, and liabilities of that LLC. LLC members and managers, however, remain personally liable for their acts and omissions to the extent those acts or omissions would be actionable against the member or manager if that person were acting in individual capacity.” Cortez v. Nacco Materials Handling Group, 356 Or. 254, 280, 337 P3d 111 (2014).

Petitioners are a group of 71 people who entered membership contracts with Respondent, Elkside Development, LLC (Elkside) for of the Osprey Point RV Resort (Osprey) campground which Elkside owned. Following a sale of Osprey to Barnett Resorts, LLC (Barnett Resorts), owned by Stefani Barnett and Chris Barnett (the Barnetts), the Barnetts sent letters to Petitioners indicating that they would no longer honor Elkside’s membership contracts. Petitioners sued Elkside, Barnett Resorts, and the Barnetts individually claiming: 1) breach of contract; 2) intentional interference with a contract; 3) elder abuse. The trial court granted summary judgment to the Barnetts individually for all three claims. The Court of Appeals affirmed the decision. On appeal, Petitioners argued that the trial court erred in its understanding of ORS 63.165. “ORS 63.165 immunizes members and managers of an LLC from vicarious liability for the debts, obligations, and liabilities of that LLC. LLC members and managers, however, remain personally liable for their acts and omissions to the extent those acts or omissions would be actionable against the member or manager if that person were acting in individual capacity.” Cortez v. Nacco Materials Handling Group, 356 Or. 254, 280, 337 P3d 111 (2014). Upon review, the Court affirmed summary judgment of the breach of contract claim, and reversed summary judgment of the intentional interference and elder abuse claims. The Court reasoned that because ORS 63.165(1) only immunizes LLC members from vicarious liability, it was not a bar to asserting a claim for elder abuse against the Barnetts individually. The trial court, therefore, erred in granting summary judgment as to this claim. As to breach of contract claim, the Court held that there was no evidence that the Barnetts individually were in contractual privity with any of the Petitioners, and thus Petitioners could only assert that claim against the LLC. Finally, for intentional interference claim, the Court held that ORS 63.165 was not a bar to individual liability for an LLC member, thus the lower courts’ summary judgment was error without consideration of the Barnett’s individual motive. Affirmed in part, affirmed in part by an equally divided court, and reversed in part.