Flow Formulas v. Kulik Consulting

Colorado Court of Appeals·Decided November 21, 2024·No. 23CA1913·Unpublished

Opinion

23CA1913 Flow Formulas v Kulik Consulting 11-21-2024 COLORADO COURT OF APPEALS

Court of Appeals No. 23CA1913 Jefferson County District Court No. 22CV30530 Honorable Christopher Rhamey, Judge

Flow Formulas, LLC, a Virginia limited liability company, Hannah Reese, Caleb Reese, Ryan Mehaffey, and Bill Hannah,

Plaintiffs-Appellees, v. Kulik Consulting LLC, a Virginia limited liability company, Defendant-Appellant.

APPEAL DISMISSED AND CASE REMANDED WITH DIRECTIONS

Division VI

Opinion by JUDGE BROWN

Welling and Graham*, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)

Announced November 21, 2024

Spencer Fane, LLP, Jeremy A. Moseley, Denver, Colorado, for Plaintiffs- Appellees

Leland Shafer, LLP, Thomas D. Leland, Maxwell N. Shafer, Denver, Colorado, for Defendant-Appellant

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.S. 2024.

¶1 Defendant, Kulik Consulting LLC, appeals the district court’s order granting partial summary judgment in favor of plaintiffs and counterclaim defendants, Hannah Reese, Caleb Reese, and Ryan Mehaffey (collectively, the individual plaintiffs), and in favor of counterclaim defendants, Bill Hannah and RDM Business Solutions LLC (RDM). Hannah Reese, Caleb Reese, Ryan Mehaffey, and Bill Hannah (collectively, the individual owners) are members of Flow Formulas, LLC. Flow Formulas alone initiated this action against defendants and counterclaim plaintiffs, Robert Kulik and Kulik Consulting (collectively, the Kulik defendants).1 By stipulation several months later, the individual owners and RDM were joined as parties.2

1 Kulik Consulting is owned by Robert Kulik, who is a named

defendant to the claims asserted in the operative complaint and against whom partial summary judgment ultimately entered but who is not a party to this appeal. 2 The individual plaintiffs were joined as plaintiffs and counterclaim

defendants while Bill Hannah and RDM, which is owned by Ryan Mehaffey, were joined as “counterclaim defendants.” It is unclear how Hannah and RDM could be joined as “counterclaim defendants” without first being joined as plaintiffs; instead, it appears that they should have been joined as third-party defendants. In addition, as best we can tell, Kulik asserted no claims against RDM, and RDM asserted no claims against any other party, so query whether RDM is a proper party to the underlying litigation. RDM is not a party to this appeal.

¶2 After the individual owners and Kulik Consulting filed cross-motions for summary judgment, the district court entered an order granting partial summary judgment in favor of the individual owners. Six months later, the court certified the partial summary judgment order as a final judgment for purposes of appeal under C.R.C.P. 54(b). In doing so, the court confirmed that the partial summary judgment order resolved one claim in favor of the individual plaintiffs against the Kulik defendants, dismissed three other of the individual plaintiffs’ claims as moot, and dismissed or denied twelve of the Kulik defendants’ counterclaims against the individual owners.

¶3 On appeal, Kulik Consulting contends that (1) Flow Formulas lacked standing to bring the underlying civil suit; (2) the district court erred by granting partial summary judgment in favor of the individual owners; (3) the court erred by entering judgment on counterclaims that were not addressed in the cross-motions for summary judgment; and (4) the court erred by certifying its partial summary judgment order for immediate appeal under C.R.C.P. 54(b). Because we agree with Kulik Consulting’s last contention, we

dismiss the appeal and remand the case for further proceedings. As a result, we do not address the remaining contentions.

I. Background

¶4 Flow Formulas is a limited liability company formed under the Colorado Limited Liability Company Act. See §§ 7-80-101 to -1101, C.R.S. 2024. In 2020, Kulik Consulting joined Flow Formulas.3 Beginning in April 2022, after disagreements arose between the individual plaintiffs and Kulik, Kulik Consulting sought to buy out the individual owners’ interests pursuant to the company’s operating agreement. Each of the individual owners responded by offering to buy out Kulik Consulting’s interest. Ultimately, the parties refused to sell their respective interests.

¶5 In December 2022, Flow Formulas commenced the underlying lawsuit against the Kulik defendants. The operative complaint asserts the following claims:

Asserted

Claim Asserted By Against

Flow Kulik

1. Breach of Fiduciary Duty Formulas defendants

3 Kulik denies that he is the alter ego of Kulik Consulting or that he

was a member of Flow Formulas in an individual capacity. This issue does not affect our disposition, and our reference to Kulik Consulting here is not binding on the district court on remand.

Asserted

Claim Asserted By Against

Intentional Interference with Flow Kulik 2.

Athlete Promotional Contracts Formulas defendants Breach of the Operating Flow Kulik 3.

Agreement Formulas defendants Conversion of Company Flow Kulik 4.

Property Formulas defendants Declarations re: Kulik’s Capital Flow Kulik 5.

Account Formulas defendants Declaration that the Buy/Sell Flow Kulik

6. Provision Does Not Apply to Formulas defendants

Athlete Promotional Contracts Flow Kulik

7. Breach of Duty of Loyalty Formulas defendants

Declaration of the Ownership Sale that Kulik Must Make to Individual Kulik

8. Mehaffey, or Alternatively, to Plaintiffs defendants

Another Owner Who Elected to Purchase His Interest Breach of the Operating Kulik 9. Mehaffey Agreement with Mehaffey defendants Breach of the Operating Kulik 10. Caleb Reese Agreement with Caleb Reese defendants Breach of the Operating Hannah Kulik 11.

Agreement with Hannah Reese Reese defendants Breach of Duty of Loyalty to Individual Kulik 12.

Other Owners Plaintiffs defendants

¶6 The Kulik defendants assert the following counterclaims:

Asserted

Counterclaim Asserted By Against

Declaratory Judgment Regarding Kulik Consulting’s Kulik Ryan

1. Offer to Purchase Mehaffey’s Consulting Mehaffey

Membership Interest and Mehaffey’s Response

Asserted

Counterclaim Asserted By Against

Breach of the Operating Kulik Ryan 2.

Agreement Consulting Mehaffey Equitable Remedy of Specific Kulik Ryan 3.

Performance Consulting Mehaffey Declaratory Judgment Regarding Kulik Consulting’s Kulik

4. offer to Purchase Reese’s Caleb Reese Consulting

Membership Interest and Reese’s Response Breach of the Operating Kulik 5. Caleb Reese Agreement Consulting Equitable Remedy of Specific Kulik 6. Caleb Reese Performance Consulting Declaratory Judgment Regarding Kulik Consulting’s Kulik Hannah

7. offer to Purchase Reese’s Consulting Reese

Membership Interest and Reese’s Response Breach of the Operating Kulik Hannah 8.

Agreement Consulting Reese Equitable Remedy of Specific Kulik Hannah 9.

Performance Consulting Reese Declaratory Judgment Regarding Kulik Consulting’s Kulik

10. offer to Purchase Hannah’s Bill Hannah Consulting

Membership Interest and Hannah’s Response Breach of the Operating Kulik 11. Bill Hannah Agreement Consulting Equitable Remedy of Specific Kulik 12. Bill Hannah Performance Consulting Declaratory Judgment as to Kulik Individual 13.

Value of Capital Account Consulting Plaintiffs Breach of the Operating Kulik Individual

14. Agreement [Including Failing to Consulting Plaintiffs

Adjust Kulik’s Capital Account,

Asserted

Counterclaim Asserted By Against

Mishandling Corporate Finances, and Failing to Transfer Membership Interests]

Breach of the Operating Kulik Individual 15.

Agreement Article 5.4 Consulting Plaintiffs Kulik Individual

16. Breach of Fiduciary Duty Consulting Plaintiffs

Fraud/Fraudulent Inducement Kulik Individual 17.

(Pled in the Alternative) defendants Plaintiffs Flow

Formulas

Unjust Enrichment (Pled in the Kulik 18. and Alternative) defendants Individual

Plaintiffs

¶7 In January 2023, the individual plaintiffs moved for partial

Free access — add to your briefcase to read the full text and ask questions with AI

Flow Formulas v. Kulik Consulting, (Colo. Ct. App. 2024).

Flow Formulas v. Kulik Consulting (Flow Formulas v. Kulik Consulting) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Curtiss-Wright Corp. v. General Electric Co.
446 U.S. 1 (Supreme Court, 1980)
Broyles v. Fort Lyon Canal Co.
695 P.2d 1136 (Supreme Court of Colorado, 1985)
In Re the Marriage of Van Inwegen
757 P.2d 1118 (Colorado Court of Appeals, 1988)
Ovation Plumbing, Inc. v. Furton
33 P.3d 1221 (Colorado Court of Appeals, 2001)
Musick v. Woznicki
136 P.3d 244 (Supreme Court of Colorado, 2006)
In Re Bass
142 P.3d 1259 (Supreme Court of Colorado, 2006)
Horton v. Suthers
43 P.3d 611 (Supreme Court of Colorado, 2002)
In Re Marriage of Rozzi
190 P.3d 815 (Colorado Court of Appeals, 2008)
People v. Darlington
105 P.3d 230 (Supreme Court of Colorado, 2005)
Harding Glass Co. v. Jones
640 P.2d 1123 (Supreme Court of Colorado, 1982)
DCP Midstream, LP v. Anadarko Petroleum Corp.
2013 CO 36 (Supreme Court of Colorado, 2013)
Lytle v. Kite
728 P.2d 305 (Supreme Court of Colorado, 1986)
Core-Mark Midcontinent Inc. v. Sonitrol Corp.
2016 COA 22 (Colorado Court of Appeals, 2016)