Parker v. U.S. Trust Company N.A.

CourtDistrict of Columbia Court of Appeals
DecidedSeptember 3, 2020
Docket18-CV-1349 +
StatusPublished

This text of Parker v. U.S. Trust Company N.A. (Parker v. U.S. Trust Company N.A.) is published on Counsel Stack Legal Research, covering District of Columbia Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Parker v. U.S. Trust Company N.A., (D.C. 2020).

Opinion

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DISTRICT OF COLUMBIA COURT OF APPEALS

Nos. 18-CV-1349 and 19-CV-1225

NANCY B. PARKER and ELLIS J. PARKER, APPELLANTS/CROSS-APPELLEES,

v.

U.S. TRUST COMPANY, N.A., and BANK OF AMERICA, N.A., APPELLEES/CROSS-APPELLANTS.

Appeals from the Superior Court of the District of Columbia (CAB-5433-05)

(Hon. John M. Mott, Motions Judge) (Hon. Michael L. Rankin, Trial Judge)

(Argued June 18, 2020 Decided September 3, 2020)

William J. Cornwell, with whom David J. Kaminow was on the brief, for appellants/cross-appellees.

Robert E. Grant, with whom James P. Lillis was on the brief, for appellees/cross-appellants.

Before BLACKBURNE-RIGSBY, Chief Judge, and MCLEESE and DEAHL, Associate Judges.

MCLEESE, Associate Judge: Appellants/cross-appellees Nancy B. Parker and

Ellis J. Parker jointly had an interest in a limited liability company (LLC), along

with Ms. Parker’s father, Hartford E. Bealer. Parker v. U.S. Trust Co., 30 A.3d 147, 2

149 (D.C. 2011). After Mr. Bealer’s death, appellee/cross-appellant U.S. Trust

Company, N.A., became a representative of Mr. Bealer’s estate. Id. Appellee/cross-

appellant Bank of America, N.A., subsequently merged with U.S. Trust, and we use

“the bank” in this opinion to refer to U.S. Trust and/or Bank of America. The Parkers

sued the bank, challenging various actions the bank took while acting as Mr. Bealer’s

representative. Id. at 150. The trial court initially granted summary judgment to the

bank, but this court reversed and remanded. Id. at 148-55. On remand, a jury

awarded the Parkers more than $1 million in damages relating to the bank’s failure

to distribute income from the LLC to the Parkers. The bank challenges that verdict,

arguing that it is entitled to judgment as a matter of law. The Parkers defend the jury

award but seek both additional damages and an award of prejudgment interest. We

affirm the jury award, vacate the judgment in part, and remand for further

proceedings.

I. Facts and Procedural Background

The following description of the facts and relevant proceedings borrows

substantially from our previous opinion in this case. Except as indicated, the facts

appear to be undisputed. 3

The LLC’s operating agreement contemplates that there would be three

members, Mr. Bealer and his two daughters, each with a one-third interest in the

LLC. Mr. Bealer’s other daughter never became a member, however, and only Ms.

Parker and Mr. Bealer executed the agreement as members. The agreement lists Mr.

Bealer as owning a one-third interest and the Parkers as owning a one-third interest

together, as tenants by entirety. Because the remaining one-third interest was not

explicitly allocated, the agreement resulted in two half interests, one held by Mr.

Bealer and the other held jointly by the Parkers. Parker, 30 A.3d at 149 n.1

The agreement does not define the term “Member,” but it includes various

provisions relating to membership. Paragraph 12(c) provides that no person or entity

may be considered a member unless named in the agreement or admitted to the LLC

in accordance with the terms of the agreement. Paragraph 12(c) further explains that

“[t]he Company [and] each Member . . . need deal only with Members so named or

so admitted; they shall not be required to deal with any other person or entity by

reason of . . . the death or termination of a Member, except as otherwise provided in

[the] Agreement.”

The agreement also contains provisions relating to the death or withdrawal of

a member. In Paragraph 15(a)(i), the agreement requires the LLC to dissolve upon 4

the death of a “Member,” unless “within ninety (90) days . . . the other Members

with voting rights elect to continue the legal existence of the Company,” provided

that the “Company shall not be continued by fewer than two (2) Members.” If the

members elect to continue the LLC after the death of a member, then “the estate or

other legal representative of the [deceased] shall have the obligation to transfer the

Interest of the [deceased Member] to the Members who have elected to continue the

Company.” The remaining members are required to pay an agreed-upon price for

the deceased member’s interest. Under the terms of the operating agreement, that

price is one third of the LLC’s assessed value minus ten percent.

Mr. Bealer died in January 2003, having designated the bank as the executor

of his estate. Parker, 30 A.3d at 149. According to the Parkers, Ms. Parker then

transferred half of her interest in the LLC to Mr. Parker, Mr. Parker became a

member of the LLC, and the two elected to continue the LLC. Ms. Parker’s attorney

later sent letters to the bank seeking to exercise a claimed right to purchase Mr.

Bealer’s interest in the LLC, but the bank did not sell Mr. Bealer’s interest. Parker,

30 A.3d at 149-50.

In 2005, the Parkers brought a breach-of-contract action in Superior Court,

seeking to compel the bank (1) to transfer Mr. Bealer’s interest in the LLC to the 5

Parkers, and (2) to pay the Parkers their share of income the LLC had generated.

Parker, 30 A.3d at 150 & n.3. The trial court granted summary judgment to the bank

in 2007, ruling that the LLC had terminated upon Mr. Bealer’s death. Id. at 150.

The trial court further stated that the LLC “is dissolved and shall be terminated in

accordance with paragraph 15 of the company’s Operating Agreement.”

On appeal, this court reversed. Parker, 30 A.3d at 150-55. We held that the

agreement is ambiguous on two issues: (1) whether Mr. Parker was a member of the

LLC before Mr. Bealer’s death, id. at 151-54; and (2) whether, in the alternative,

Mr. Parker could be added as a member during the ninety-day period after Mr.

Bealer’s death, so as to permit the Parkers to validly elect to continue the LLC, id.

at 154-55. We therefore remanded the case for the parties to present evidence to a

factfinder on those issues. Id.

During the pendency of the appeal, the bank -- presumably relying on the trial

court’s order granting summary judgment -- filed documents dissolving the LLC and

transferring properties out of the LLC to itself as a trustee, for no consideration. In

those documents, the bank described itself as the managing member of the LLC.

The Parkers filed another suit (CA-559-11) challenging the bank’s actions. The trial

court dismissed that case without prejudice, concluding that the issues presented 6

could not be adjudicated until the court resolved in the present case the questions

whether Mr. Parker became a member of the LLC and whether the LLC thus should

have continued rather than been dissolved.

On remand in the present case, the Parkers were permitted to amend the

complaint, adding claims of breach of fiduciary duty, conversion, and trespass to

personal property, and seeking an accounting. The trial court, however,

subsequently granted partial summary judgment to the bank, ruling that the Parkers

were precluded from basing any new cause of action on the bank’s actions

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