LLC membership admission; MCL 450.4501; Patel v FisherBroyles, LLP; Agency authority; Meretta v Peach; Declaratory relief standing; MCR 2.605; League of Women Voters of MI v Secretary of State; Requests for admission; Res judicata; MCR 2.116(C)(7); Adair v Michigan

The court held that the circuit court correctly resolved three consolidated LLC disputes by enforcing the operating agreements as written and applying preclusion principles to bar relitigation. In Docket No. 366285, the court agreed that Sattam (a defendant in one of the cases and a plaintiff in the other two) was a transferee, not an admitted member of plaintiff-Value Save Property, LLC (VSP), because the VSP operating agreement required majority-member consent to admit a substitute member, including that “Members holding a majority of the outstanding Shares in the Company consent to the Qualified Transferee’s admission as a Member.” Consent could not be obtained through only one 50% owner’s signature. And whether a defendant in the other two cases (Yousef) had authority to independently bind plaintiff-Barash Yousef Holdings, LLC (BYH) depended on the language of BYH’s operating agreement. Because Yousef and plaintiff-Barash “were equal members of BYH at the time that Sattam purchased the shares of the remaining members, neither held a majority interest in BYH. Therefore, § 6.2 of BYH’s operating agreement required both members to approve Sattam’s admission as a member in VSP.” The court rejected Sattam’s theories of implied or apparent authority because the record contained “no evidence that Yousef was Barash’s agent, that Barash took any actions to manifest that Yousef could act on his behalf, or that there was any act that would lead a third party to reasonably believe that Yousef was acting as Barash’s agent.” The court also upheld Barash, BYH, and VSP’s declaratory standing because an “actual controversy” existed to guide future conduct where the parties disputed who could manage VSP and make tenant and property decisions. In Docket No. 369975, the court held that Sattam lacked standing to sue defendant-BYH II because he failed to establish admission as a member under the operating agreement, and tax forms “were not proof of membership in a” LLC. In Docket No. 370472, the court held that Sattam and VSP’s later claims were barred by res judicata because the membership-status judgment was decided first and “‘a judgment pending on appeal is deemed res judicata,’” and the later case arose from the same transaction. Affirmed.