Lynn Schieve, Individually and as a Member of the Carroll Meyer Family Limited Liability Company, LLC v. John Meyer

CourtMissouri Court of Appeals
DecidedJune 1, 2021
DocketWD83700
StatusPublished

This text of Lynn Schieve, Individually and as a Member of the Carroll Meyer Family Limited Liability Company, LLC v. John Meyer (Lynn Schieve, Individually and as a Member of the Carroll Meyer Family Limited Liability Company, LLC v. John Meyer) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lynn Schieve, Individually and as a Member of the Carroll Meyer Family Limited Liability Company, LLC v. John Meyer, (Mo. Ct. App. 2021).

Opinion

IN THE MISSOURI COURT OF APPEALS WESTERN DISTRICT

LYNN SCHIEVE, Individually and as a ) Member of the Carroll Meyer Family ) Limited Liability Company, LLC, ) ) WD83700 Respondent, ) v. ) OPINION FILED: ) June 1, 2021 ) JOHN MEYER, ) ) Appellant. )

Appeal from the Circuit Court of Clay County, Missouri The Honorable David P. Chamberlain, Judge

Before Division Two: Mark D. Pfeiffer, Presiding Judge, and Alok Ahuja and Karen King Mitchell, Judges

John Meyer appeals, following a bench trial, a judgment in the amount of $205,982.55 plus

court costs entered against him in favor of Lynn Schieve on her claim that Meyer, as acting

manager of the Carroll Meyer Family Limited Liability Company, breached his fiduciary duty to

the members of the LLC by taking the LLC’s money for his own personal use and failing to issue

distributions required by the LLC’s Operating Agreement. Meyer raises three points on appeal.

He argues first that Schieve lacked standing to bring a direct claim against Meyer and that she

could proceed only in a derivative action on behalf of the LLC, rather than as an individual member. Second, he argues that there was no substantial evidence to support the trial court’s

finding that Meyer owed any duties for which he could be personally liable. And, finally, he argues

that the court misapplied the law in awarding Schieve attorneys’ fees. Finding no error, we affirm.

Background

On November 3, 2010, siblings John Meyer, Brad Meyer, and Lynn Schieve filed Articles

of Organization with the Missouri Secretary of State to start the Carroll Meyer Family Limited

Liability Company, LLC. Meyer, who was both a member and the manager of the LLC, owned

39.1666 percent of the LLC, and Brad and Schieve, both designated as members, owned 30.4166

percent each.1

On September 30, 2013, the LLC sold a tract of land in Iowa to Hy-Vee for $640,000, with

net proceeds in the amount of $609,849.85; both the contract and the payments were written in the

LLC’s name. Meyer, Brad, and Schieve held discussions about how to distribute the funds, and

Meyer initially suggested funneling 95% of the money through another business of his (The

Classic Cup) to get a tax credit. Both Brad and Schieve were opposed, believing that Meyer’s

suggestion would constitute tax fraud; this opposition led to a rift in the family, and Meyer stopped

communicating with Brad and Schieve. On November 7, 2013, Schieve sent an email to Meyer,

demanding that he distribute the proceeds from the Hy-Vee land sale. Schieve and Brad, acting as

members holding a majority interest, subsequently drafted a declaration in the LLC’s name,

directing Meyer—as the manager—to distribute the funds by December 31, 2013. Meyer never

distributed the funds.

On December 31, 2013, Schieve and Brad, acting as members with a majority interest,

issued a resolution freezing the LLC’s bank account unless transactions were approved by a

1 To avoid confusion, Brad Meyer will be referred to by his first name. No familiarity or disrespect is intended.

2 majority of the members. In response, Meyer began threatening Schieve with tax penalty

payments if they did not unfreeze the account, so Schieve and Brad agreed to lift the freeze. On

March 12, 2014, Meyer wrote a check for $50,000 from the LLC to The Classic Cup, designating

the funds as a loan repayment. But the LLC had never taken a loan from The Classic Cup.

On October 14, 2014, Schieve and Brad sent Meyer a letter demanding an accounting from

the LLC no later than October 31, 2014, as Meyer still had not disbursed the proceeds from the

Hy-Vee sale. On October 15, 2014, Meyer wrote two checks from the LLC account; one went to

the Treasurer for the State of Iowa in the amount of $8,603.00 and the other went to the United

States Treasury in the amount of $20,204.00, both for payment of Meyer’s personal taxes. On

November 3, 2014, in response to the demand for an accounting, Meyer sent Schieve an email

stating, “I recently returned from my annual camping trip to find your letter. It is apparent that

you have yet to understand that all of the money that went into the LLC belongs to the Meyer

Family Partnership.”2 Meyer further indicated that there was no money in the LLC and that the

LLC had never purchased or been gifted any property (contrary to the multiple quitclaim deeds

showing property transferred from the Meyer Family Partnership to the LLC before the Hy-Vee

land sale).

On March 25, 2015, a $200,000 check issued from the LLC account to a holding company

for CrossFirst Bank, where Meyer held accounts. On March 21, 2016, a cashier’s check in the

amount of $109,444.35, payable to Meyer, was issued from the LLC account, bringing its balance

to zero and closing the account. Neither Schieve nor Brad knew anything about or authorized

either of these payments. Schieve and Brad contacted CrossFirst Bank and explained to them that

2 The Meyer Family Partnership included Carroll Meyer (the patriarch), John Meyer, Brad Meyer, Lynn Schieve, and Scott Meyer (another sibling). At the time of Meyer’s November 3, 2014 letter, Schieve owned 8.5% of the Meyer Family Partnership. The partnership predated the LLC.

3 Meyer had not been authorized to take the $200,000 from the LLC that he had deposited at

CrossFirst. CrossFirst indicated they did not wish to be involved and insisted Meyer take the

money out.

On November 3, 2017, Meyer created a new bank account at Country Club Bank in the

LLC’s name and deposited $224,500 in the new account.3 On November 6, 2017, Meyer withdrew

$224,480 from the LLC account and closed it. Schieve emailed back and forth with Meyer in

various attempts to resolve the dispute without avail.

Schieve filed suit, individually and as a member of the LLC, against Meyer in Clay County

on January 12, 2018. Schieve’s petition alleged a breach of fiduciary duty, conversion, breach of

contract, and unjust enrichment. Following a bench trial, the court entered judgment in favor of

Schieve, finding that Meyer “breached his fiduciary duty to the two members of the LLC, including

[Schieve], when he took the LLC’s money for his own personal use and benefit while not issuing

the required distributions per the LLC’s Operating Agreement.” The court awarded Schieve

$165,982.55 in damages and $40,000 in attorneys’ fees. Meyer appeals.

Analysis

Meyer raises three points on appeal. First, he argues that the trial court misapplied the law

in entering judgment in favor of Schieve because Schieve lacked standing to bring her claims

individually in a direct action rather than on behalf of the LLC in a derivative action. Second, he

argues that the trial court lacked substantial evidence to support its finding that Meyer owed any

duties to Schieve for which he could be personally liable. And, finally, Meyer argues that the court

misapplied the law in awarding Schieve attorneys’ fees because, he claims, they were not

authorized by the Operating Agreement.

3 This amount represented both the $200,000 Meyer initially deposited with CrossFirst, along with interest accrued on the CrossFirst account.

4 “Our review of a court-tried case is governed by Murphy v. Carron, 536 S.W.2d 30, 32

(Mo. banc 1976).” In Their Representative Capacity as Trs. for Indian Springs Owners Ass’n v.

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Lynn Schieve, Individually and as a Member of the Carroll Meyer Family Limited Liability Company, LLC v. John Meyer, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lynn-schieve-individually-and-as-a-member-of-the-carroll-meyer-family-moctapp-2021.