ADDIEL LOPEZ v. GADI HUS
Not available in provided text (2020)
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Rule of Law:
When interpreting Florida's LLC Act, a specific statutory provision governing the removal of a manager in a manager-managed LLC takes precedence over a more general provision requiring unanimous consent for amendments to articles of organization.
Facts:
- Sling Broadband, LLC was formed in 2006 as a Florida limited liability company.
- Addiel Lopez and Gadi Hus were named as managers in Sling Broadband, LLC's articles of organization when it was formed.
- Eight years after the LLC's formation, Lopez and Gadi Hus entered into an investment agreement with Erez Hus.
- Erez Hus invested $50,000 in Sling Broadband, LLC in exchange for a 5% ownership interest.
- Gadi Hus and Erez Hus collectively maintained a 52.5% ownership interest in Sling Broadband, LLC.
- Gadi Hus and Erez Hus subsequently removed Lopez as a manager of Sling Broadband, LLC.
- Lopez did not consent to his own removal as manager.
Procedural Posture:
- Addiel Lopez filed a lawsuit in the Circuit Court for the Seventeenth Judicial Circuit, Broward County, challenging the authority of Gadi Hus and Erez Hus to remove him as a manager of Sling Broadband, LLC.
- The circuit court considered competing summary judgment motions filed by both Lopez and the appellees (Gadi Hus, Erez Hus, and Sling Broadband, LLC).
- The circuit court entered final summary judgment in favor of the appellees.
- Lopez (appellant) appealed the circuit court’s final summary judgment to the District Court of Appeal of the State of Florida, Fourth District.
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Issue:
Does the removal of a manager in a manager-managed Florida Limited Liability Company (LLC), where the managers are named in the articles of organization, require an amendment to the articles of organization with unanimous member consent under section 605.04073(2)(e), Florida Statutes, or can it be accomplished by a majority member vote under section 605.04072(4), Florida Statutes?
Opinions:
Majority - Kuntz, J.
No, the removal of a manager in a manager-managed Florida LLC does not require an amendment to the articles of organization with unanimous member consent if the specific statute governing manager removal is met. The court affirmed the circuit court's judgment, holding that section 605.04072(4), Florida Statutes, which allows for manager removal with the consent of members holding more than 50% of the LLC's profit interest, is the more specific statute governing this issue. While section 605.04073(2)(e) generally requires unanimous consent to amend articles of organization, the principle that a specific statute controls over a more general one dictates the application of section 605.04072(4). The court found that the plain language of section 605.04072(4) clearly permits such removal. Since Gadi Hus and Erez Hus together held a 52.5% interest, they met the statutory requirement to remove Lopez, given that the parties did not alter this default rule through an operating agreement.
Concurring - Ciklin, J.
Concurred without separate reasoning.
Concurring - Conner, J.
Concurred without separate reasoning.
Analysis:
This case clarifies the interpretation of Florida's LLC Act regarding manager removal, emphasizing the principle that specific statutory provisions trump general ones. It reinforces the idea that LLC operating agreements are crucial for altering statutory default rules; absent such an agreement, the default provisions will control. For law students, this case is significant for understanding statutory construction, particularly the 'specific over general' rule, and its application in the context of business organizations, highlighting the importance of drafting clear LLC agreements to define management structures and removal processes.
