Bennett v. Bennett

Bennett v. Bennett, 2019 NCBC 18.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
FORSYTH COUNTY 18 CVS 48

BERT L. BENNETT III and TERRY
BENNETT ALLEN,

Plaintiffs,

v.

GRAHAM F. BENNETT; ANN ORDER AND OPINION ON
BENNETT-PHILLIPS; JAMES H. MOTION TO DISMISS SECOND
BENNETT; and LOUISE BENNETT, AMENDED COMPLAINT

Defendants,

and

BENNETT LINVILLE FARM, LLC;
JOHN J. BENNETT; and JEANNE R.
BENNETT,

Nominal Defendants.

1. This case arises out of a dispute between siblings, all of whom are members

or former members of Bennett Linville Farm, LLC (“Bennett Farm”). Formed as an

estate-planning vehicle, Bennett Farm’s initial members included most of the

Bennett family—both parents and six of their children. The family’s intent, according

to Plaintiffs, was for each of Bennett Farm’s members to have an equal say in its

affairs.

2. Instead, Plaintiffs contend, they have been denied a voice on nearly every

company decision in recent years. In this action, they allege that three of the Bennett

siblings—Graham Bennett, Ann Bennett-Phillips, and Jim Bennett—conspired to
seize managerial authority without the other members’ knowledge or approval. The

three then fraudulently amended Bennett Farm’s operating agreement to consolidate

their control and, having done so, began taking actions on the company’s behalf

without member approval. Plaintiffs now claim that Graham, Ann, and Jim breached

a fiduciary duty owed to the other members, seek declarations that their actions were

unauthorized and invalid, and request a decree judicially dissolving Bennett Farm.

3. In response, Graham, Ann, and Jim seek to dismiss this action in its

entirety. They contend that Plaintiffs lack standing to bring many of the asserted

claims as direct claims, rather than as derivative claims on behalf of Bennett Farm.

They also contend that Plaintiffs fail to state any claim upon which relief can be

granted. For the reasons stated below, the Court GRANTS in part and DENIES in

part the motion.

Fitzgerald Litigation, by Andrew L. Fitzgerald, Lee Denton, and D.
Stuart Punger, for Plaintiffs.

Bell, Davis & Pitt, P.A., by Allison B. Parker and Kevin G. Williams, for
Defendants Graham F. Bennett, Ann Bennett-Phillips, James H.
Bennett, and Bennett Linville Farm, LLC.

Roberson Haworth & Reese, PLLC, by Andrew D. Irby, for Defendant
Louise Bennett.

No counsel appeared for Nominal Defendants John J. Bennett and
Jeanne R. Bennett.

Conrad, Judge.
I.
BACKGROUND1

4. The history of this case begins nearly 40 years ago with Bert Bennett, Jr.,

his wife Lillian Bennett, and their eight children: Bert III, Graham, Joy, John, Louise,

Terry, Ann, and Jim. (Second Am. Compl. ¶ 12, ECF No. 25 [“Compl.”].) In the early

1980s, the Bennett parents began giving real estate to their children. (Compl. ¶ 14.)

Over the course of several years, each of the Bennett children received a one-eighth

undivided interest in several parcels in Avery County—a tract that eventually grew

to hundreds of acres. (Compl. ¶¶ 14, 15.)

5. Such was the status quo until 2001, when Joy gave up her interest in the

property, transferring it to her seven siblings. (Compl. ¶ 16.) Around the same time,

John and his wife, Jeanne, requested that they be given a portion of the property to

own separate and apart from the others. (Compl. ¶ 17.) The Bennett parents agreed,

and the other Bennett children deeded their interests in a 35-acre tract to John and

Jeanne. (Compl. ¶ 19.) Although somewhat unclear, it appears that John in return

gave up his interest in the rest of the Avery County property. (See Compl. ¶ 20.)

6. The second amended complaint says little about how the Bennett family

managed the jointly held property at first. The Bennett parents, though having given

the property to their children, seem to have exercised continued decision-making

authority for a time. (See Compl. ¶¶ 18, 24.) That changed in 2007 with the creation

of Bennett Farm, a limited liability company formed to facilitate the parents’ estate

1 This summary is drawn from relevant allegations in the second amended complaint and the

attached exhibits. It is intended only to provide context for the Court’s decision and does not
constitute findings of fact.
planning. (See Compl. ¶ 24.) The founding members of Bennett Farm were the

Bennett parents (each with a 23% interest), along with Bert III, Graham, Louise,

Terry, Ann, and Jim (each with a 9% interest). (Compl. ¶ 24; see also Ex. 2 at

Schedule I [“Op. Agr.”].) All of the members transferred their ownership interests in

the Avery County property to Bennett Farm. (Compl. ¶ 28.)

7. According to Bert III and Terry (the plaintiffs here), the family intended

Bennett Farm to be a member-managed LLC. (Compl. ¶ 24.) They allege, though,

that Graham and Ann designated Bennett Farm as a manager-managed LLC—

without the knowledge of the other members—in certain Articles of Incorporation.2

(Compl. ¶ 25.) The company’s Operating Agreement was then executed in February

2007. (Compl. ¶ 26.) It also states that Bennett Farm “shall be managed by the

Managers,” a term defined as “those individuals set forth in Schedule II” or

individuals “who are elected to act as Managers.” (Op. Agr. §§ 2.1, 12.1(p).) As

executed, though, the Operating Agreement included no Schedule II, and no election

of managers ever took place. (See Compl. ¶¶ 26, 27.) Bert III and Terry allege that

a document labeled as Schedule II, which lists Graham and Ann as managers, was

added later without the approval of Bennett Farm’s members. (Compl. ¶ 26.)

8. In 2010, Graham and Ann, joined by Jim, amended the Operating

Agreement, again without the others’ knowledge, to include new terms designed to

consolidate their control. (See Compl. ¶ 30.) Among other changes, the Amended

Operating Agreement designates Jim as a third manager, authorizes the managers

2 It is unclear why Articles of Incorporation were adopted for Bennett Farm, which is a limited

liability company and not a corporation.
to make capital calls without member consent, loosens the restrictions on a member’s

right to transfer his or her interest, and permits Bennett Farm to redeem any

member’s interest upon the consent of members owning at least 75% of the company.

(See Compl. Ex. 4 §§ 7.2, 9.2, 9.6 [“Am. Op. Agr.”].) Bert III and Terry signed the

Amended Operating Agreement but allege that they were never provided a copy of

the document apart from the signature page, that the terms were never disclosed,

and that Graham falsely represented that their signatures were needed for

administrative purposes. (Compl. ¶ 31.) They saw the new terms for the first time

more than five years later. (See Compl. ¶ 33.)

9. In 2012, Lillian Bennett died. (Compl. ¶ 34.) She passed her interest in

Bennett Farm to Bert III, Graham, Louise, Terry, Ann, and Jim—the six children

with membership interests in the company. (Compl. ¶ 34.) Bert Bennett, Jr., though

still living, did the same a few months later. (Compl. ¶ 35.) Thus, as of June 2012,

Bennett Farm had six remaining members, all with equal interests. (Compl. ¶ 36.)

10. Not long after, Graham, Ann, and Jim asked John and Jeanne to give

Bennett Farm a right of first refusal on their separate 35-acre tract. (Compl. ¶ 37.)

John and Jeanne agreed. (Compl. ¶ 38.) When John later learned that the right of

first refusal would interfere with his plan to incorporate his property into an adjacent

subdivision, he requested that Bennett Farm terminate the then-unexercised right.

(Compl. ¶ 40.) This prompted a heated family disagreement. Bert III, Terry, and

Louise had received no notice of the right of first refusal in the first place and favored

granting John’s request to terminate it. (Compl. ¶¶ 39, 46.) Graham, Ann, and Jim
disagreed and, claiming managerial authority, decided to exercise and enforce the

right of first refusal even in the absence of majority approval of the members. (Compl.

¶¶ 46–48.) John and Jeanne responded by suing Bennett Farm. (Compl. ¶ 50.)

11. The litigation deepened the family divide. The siblings disputed who should

pay for Bennett Farm’s litigation expenses. (See Compl. ¶¶ 61, 78, 90(f).) Bert III’s

refusal to pay his share of the expenses prompted a backlash by Graham, Ann, and

Jim, resulting in his exclusion from the Bennett Farm property. (See Compl. ¶¶ 78,

79.)

12. There were also discussions about how to pay for John and Jeanne’s land if

Bennett Farm succeeded in exercising the right of first refusal. Bert III and Terry

now allege that the others used the issue as leverage to force Terry out of the

company. In an e-mail to Graham and Ann, Jim expressed his “wish” to “find a way

to get Terry to sell out of the entire property now.” (Compl. ¶ 52.) Ann agreed and

observed that Terry likely would not or could not pay her pro rata share of any cost

to buy John and Jeanne’s land. (See Compl. ¶ 52.) Graham later informed Terry that

she would have to make such a contribution—an amount over $100,000—or consider

selling her interest in Bennett Farm to the other members. (Compl. ¶ 54.) To satisfy

any capital call to buy out John and Jeanne, Terry would have needed access to funds

in a trust that had been created by her mother’s will. (Compl. ¶ 51.) Ann, one of the

two trustees, refused to assure Terry that she would have access to the trust funds.

(Compl. ¶ 57.) Unable to afford a capital call, Terry negotiated a sale of her
membership interest in February 2016 to the other five remaining members of

Bennett Farm. (Compl. ¶ 58.)

13. As the litigation with John lingered, Bert III commenced this action in

January 2018 against Graham, Ann, Jim, and Louise, along with Bennett Farm as a

nominal defendant. (ECF No. 4.) His original complaint sought a declaration that

Graham, Ann, and Jim are not managers of Bennett Farm and that many of their

actions on the company’s behalf were invalid. In addition, he brought claims for

breach of fiduciary duty, civil conspiracy, constructive fraud, and judicial dissolution

of Bennett Farm. The complaint was later amended to add Terry as a plaintiff. (ECF

No. 5.) Terry joined in Bert III’s original claims and added new allegations that Ann

breached her fiduciary duty in her role as trustee for Terry.

14. A motion to dismiss the amended complaint was filed but became moot when

Bert III and Terry were granted leave to amend for a second time. (ECF No. 24.) The

second amended complaint adds John and Jeanne as nominal defendants. It also

adds new claims for breach of contract and breach of the implied covenant of good

faith and fair dealing, both relating to Louise’s sale of her membership interest in

April 2018. (See Compl. ¶ 68.) Louise, apparently fed up with family litigiousness,

invited offers to purchase her membership interest from all her siblings but

ultimately sold it to Graham, Ann, and Jim. (See Compl. ¶¶ 63–69.) The transaction

gave Graham, Ann, and Jim a combined 80% of Bennett Farm and left Bert III with

the remaining 20% interest. (Compl. ¶ 68.) Bert III and Terry allege that the transfer
failed to comply with the terms of the Operating Agreement, or the Amended

Operating Agreement if it controls. (See Compl. ¶¶ 103–09.)

15. Graham, Ann, and Jim moved to dismiss the second amended complaint in

its entirety on July 10, 2018. (ECF No. 32.) The motion has been fully briefed, and

the Court held a hearing on August 16, 2018. The motion is ripe for resolution.3

II.
ANALYSIS

16. Bert III and Terry allege that three of their siblings—Graham, Ann, and

Jim—“have undertaken a crusade” to gain control of Bennett Farm and its property

to the exclusion of the other Bennett children. (Pl.’s Br. Opp’n. Mot. Dismiss 6–7,

ECF No. 38 [“Opp’n”].) According to Bert III and Terry, all or nearly all of the actions

taken by Graham, Ann, and Jim on behalf of Bennett Farm were unauthorized and

in violation of fiduciary and contractual duties owed to the other members. Bert III

and Terry have brought each of their eight claims for relief as direct claims and not

as derivative claims on behalf of Bennett Farm.

17. Graham, Ann, and Jim seek to dismiss the second amended complaint in its

entirety. They press a mix of jurisdictional and merits-related arguments. Among

other things, Graham, Ann, and Jim contend that they owed no fiduciary duties to

Bert III and Terry as either co-members or managers of Bennett Farm and that the

3 Louise filed her own motion to dismiss on July 26, 2018.
(ECF No. 36.) In response, Bert
III and Terry voluntarily dismissed any demand for monetary relief against Louise, though
maintaining that she must remain a party because their claims could affect the transfer of
her membership interest in Bennett Farm. (ECF No. 40.) Louise withdrew her motion on
August 10, 2018. (ECF No. 41.)
requested declaratory judgments are largely improper efforts to nullify contracts,

including the Amended Operating Agreement.

A. Legal Standard

18. “Subject matter jurisdiction is a prerequisite for the exercise of judicial

authority over any case or controversy.” Intersal, Inc. v. Hamilton, 2017 NCBC

LEXIS 97, at *16 (N.C. Super. Ct. Oct. 12, 2017). Matters outside the pleadings may

be considered by the Court. See State v. Seneca-Cayuga Tobacco Co., 197 N.C. App.

176, 177, 676 S.E.2d 579, 583 (2009). If the Court does not consider matters outside

the pleadings, “the court must accept plaintiff’s allegations as true and construe them

in the light most favorable to the plaintiff.” DiCesare v. Charlotte-Mecklenburg Hosp.

Auth., 2017 NCBC LEXIS 33, at *18 (N.C. Super. Ct. Apr. 11, 2017).

19. A motion to dismiss under North Carolina Rule of Civil Procedure 12(b)(6)

“tests the legal sufficiency of the complaint.” Concrete Serv. Corp. v. Inv’rs Grp., Inc.,

79 N.C. App. 678, 681, 340 S.E.2d 755, 758 (1986). Dismissal pursuant to Rule

12(b)(6) is appropriate when “(1) the complaint on its face reveals that no law

supports the plaintiff’s claim; (2) the complaint on its face reveals the absence of facts

sufficient to make a good claim; or (3) the complaint discloses some fact that

necessarily defeats the plaintiff’s claim.” Corwin v. British Am. Tobacco PLC, 821

S.E.2d 729, 736–37 (N.C. 2018) (citation and quotation marks omitted).

20. In deciding a Rule 12(b)(6) motion, the Court must treat the well-pleaded

allegations of the complaint as true and view the facts and permissible inferences “in

the light most favorable to” the nonmoving party. Ford v. Peaches Entm’t Corp., 83
N.C. App. 155, 156, 349 S.E.2d 82, 83 (1986). “[T]he court is not required to accept

as true any conclusions of law or unwarranted deductions of fact.” Oberlin Capital,

L.P. v. Slavin, 147 N.C. App. 52, 56, 554 S.E.2d 840, 844 (2001). The Court “may

properly consider documents which are the subject of a plaintiff’s complaint and to

which the complaint specifically refers” without converting a Rule 12(b)(6) motion

into a motion for summary judgment. Weaver v. St. Joseph of the Pines, Inc., 187 N.C.

App. 198, 204, 652 S.E.2d 701, 707 (2007) (quoting Oberlin Capital, 147 N.C. App. at

60, 554 S.E.2d at 847).4

B. Fiduciary Claims

21. The Court begins with the claims based on fiduciary relationships. The

second amended complaint includes two distinct claims for breach of fiduciary duty:

one related to actions taken by Graham, Ann, and Jim on behalf of Bennett Farm;

and the other against Ann in her role as trustee for Terry. There is also a single claim

for constructive fraud that is premised on the same facts underlying the two

fiduciary-duty claims. The Court considers each in turn.

1. Breach of Fiduciary Duty Based on Actions by Graham, Ann, and Jim on Behalf of

Bennett Farm

22. As alleged in the second amended complaint, Graham, Ann, and Jim

breached their fiduciary duties owed to Bert III and Terry by seizing control of

Bennett Farm without the authorization of its members and then taking a series of

4 Bert III and Terry object to any consideration of the exhibits to the motion to dismiss and

other extrinsic matter introduced in the briefing. (See Opp’n 28–29.) These materials are
not pertinent to the disputed issues, and the Court therefore has not considered them.
actions designed to consolidate their control. (See Compl. ¶¶ 84–96.) Graham, Ann,

and Jim contend that Bert III and Terry lack standing to pursue a direct claim for

breach of fiduciary duty and that the complaint does not adequately allege the

existence of a fiduciary relationship between the parties. (See Def.’s Br. in Supp. Mot.

Dismiss 7–10 [“Br. in Supp.”].)

23. “Standing generally refers to a party’s right to have a court decide the merits

of a dispute.” DiCesare, 2017 NCBC LEXIS 33, at *19. It is “a necessary prerequisite

to a court’s proper exercise of subject matter jurisdiction,” Aubin v. Susi, 149 N.C.

App. 320, 324, 560 S.E.2d 875, 878 (2002), and, therefore, “a threshold issue that

must be addressed and found to exist, before the merits of the case are judicially

resolved,” Byron v. SYNCO Props., 813 S.E.2d 455, 458 (N.C. Ct. App. 2018) (citation

and quotation marks omitted).

24. Here, Graham, Ann, and Jim argue that Bert III and Terry lack standing to

assert a direct claim for breach of fiduciary duty, relying on the general rule “that

shareholders cannot pursue individual causes of action against third parties for

wrongs or injuries to the corporation that result in the diminution or destruction of

the value of their stock.” Barger v. McCoy Hillard & Parks, 346 N.C. 650, 658, 488

S.E.2d 215, 219 (1997). The exception to this rule is that a shareholder may maintain

an individual action, “even if the corporation also has a cause of action arising from

the same wrong, if the shareholder can show that the wrongdoer owed him a special

duty or that the injury suffered by the shareholder is separate and distinct from the

injury sustained by the other shareholders or the corporation itself.” Id. at 659, 488
S.E.2d at 219. These rules apply “equally to LLCs” and their members because the

members are, for this purpose, functionally equivalent to corporate shareholders.

Levin v. Jacobson, 2015 NCBC LEXIS 111, at *15 n.4 (N.C. Super. Ct. Dec. 7, 2015).5

25. The alleged breaches of fiduciary duty here are extensive and overlapping.

They include allegations that Graham, Ann, and Jim improperly acquired and then

exercised managerial authority over Bennett Farm—for example, hiring counsel to

amend the Operating Agreement (which they then tricked their siblings into signing),

negotiating and exercising the right of first refusal as to John and Jeanne’s land, and

declaring and making capital calls. (See Compl. ¶¶ 88, 90, 92, 93.) The second

amended complaint further alleges that Graham, Ann, and Jim improperly induced

Terry into selling her membership interest and purchased Louise’s membership

interest in violation of the Operating Agreement. (See Compl. ¶¶ 90, 94.)

26. In each case, assuming the alleged facts to be true, the injuries incurred by

Bert III and Terry are “separate and distinct” from those of Bennett Farm as required

under the Barger framework. Barger, 346 N.C. at 659, 488 S.E.2d at 219. At root,

Bert III and Terry allege that Graham, Ann, and Jim seized managerial control

without authorization and took actions on behalf of Bennett Farm against the wishes

5 The Barger framework seems to be a poor fit here, yet both sides apply it, apparently on the

theory that the claim is based on alleged wrongs committed “against [Bennett Farm] and
alleged injuries suffered by [Bennett Farm].” (Br. in Supp. 6; see also Opp’n 15–18.) There
is no claim, though, that Graham, Ann, and Jim breached a fiduciary duty owed to Bennett
Farm. And many of the alleged wrongs were clearly directed toward Bennett Farm’s
members, not Bennett Farm, which would suggest the claim is, at least in part, a direct claim
on its face. Nevertheless, application of the Barger framework would lead to the same result,
and the Court elects to do so. See Atkinson v. Lackey, 2015 NCBC LEXIS 21, at *14 n.3 (N.C.
Super. Ct. Feb. 27, 2015) (applying Barger even though “claims arguably could be seen as
direct claims on their face and fall outside the Barger analysis altogether”).
of the majority of its members. If so, the effect was to deprive dissenting members of

their voting rights. This would include at least the right to elect managers, (see Op.

Agr. § 12.1(p)), and the residual right to vote on business affairs in the absence of

validly appointed managers, see N.C. Gen. Stat. § 57D-3-20(d) (“All members will be

managers for any period during which the LLC would otherwise not have any

managers or other company officials.”). As this Court recently held, the right to vote

on company matters is a right possessed by the individual member, and the

infringement of that right is an individual injury properly the subject of a direct

claim. See 759 Ventures, LLC v. GCP Apt. Investors, LLC, 2018 NCBC LEXIS 82, at

*10 (N.C. Super. Ct. Aug. 13, 2018); see also La Mack v. Obeid, 2015 NCBC LEXIS

24, at *12–14 (N.C. Super. Ct. Mar. 5, 2015) (applying Delaware law).

27. So too for the other allegations. The loss of Terry’s membership interest, if

she was wrongfully induced into selling, is an injury unique to Terry. Similarly, the

allegedly improper purchase of Louise’s membership interest by Graham, Ann, and

Jim diluted the interest of Bert III relative to theirs—effectively increasing the

interest of the three managerial members at the expense of the remaining minority

member. Cf. Corwin, 821 S.E.2d at 735–36 (holding that shareholder had standing

to bring direct claim for voting power dilution in corporate context).

28. Graham, Ann, and Jim argue, perhaps correctly, that they became

managers through legitimate means and therefore properly exercised managerial

authority. (See Br. in Supp. 3, 19.) They also argue that Terry was not coerced into

selling her interest and that the purchase of Louise’s interest complied with the
requirements of the Amended Operating Agreement. (See Br. in Supp. 21.) But the

allegations of the second amended complaint say otherwise, and “[j]urisdiction of the

court over the subject matter is not defeated by the possibility that the allegations of

the complaint may fail to state a cause of action upon which the plaintiff may recover.”

Wilkie v. Stanley, 2011 NCBC LEXIS 11, at *7 (N.C. Super. Ct. Apr. 20, 2011)

(quoting Dale v. Lattimore, 12 N.C. App. 348, 352, 183 S.E.2d 417, 420 (1971)). For

purposes of standing, Bert III and Terry have alleged a concrete, individual injury,

sufficient “to justify the invocation of the judiciary’s remedial powers.” Id. at *8

(citation and quotation marks omitted).

29. On the merits, however, the claim falls short. An “essential element” of a

claim for breach of fiduciary duty “is the existence of a fiduciary relationship.” Azure

Dolphin, LLC v. Barton, 2017 NCBC LEXIS 90, at *23 (N.C. Super. Ct. Oct. 2, 2017)

(citing Dalton v. Camp, 353 N.C. 647, 651, 548 S.E.2d 704, 707 (2001)). As a general

rule, members of an LLC “do not owe a fiduciary duty to each other or to the

company.” Kaplan v. O.K. Techs., L.L.C., 196 N.C. App. 469, 473, 675 S.E.2d 133,

137 (2009). Rather, “[t]he rights and duties of LLC members are ordinarily governed

by the company’s operating agreement, not by general principles of fiduciary

relationships.” Strategic Mgmt. Decisions, LLC v. Sales Performance Int’l, LLC, 2017

NCBC LEXIS 69, at *10–11 (N.C. Super. Ct. Aug. 7, 2017); see also N.C. Gen. Stat.

§ 57D-2-30(a).

30. Bert III and Terry offer no persuasive reason to depart from these usual

rules. Although Bert III and Terry dispute the validity of the Amended Operating
Agreement, they do not contest the validity of the original Operating Agreement.

(See, e.g., Compl. ¶¶ 26, 82.) That agreement thoroughly addresses the duties,

powers, and potential liability of members. (See Op. Agr. §§ 4.2, 5.6, 6.3, 11.1.)

Several provisions expressly disclaim fiduciary or fiduciary-like duties on the part of

members or managers. (See Op. Agr. §§ 6.2, 11.1.) No provision is alleged to support

the existence of a fiduciary relationship between Bennett Farm’s members.

31. Rather, Bert III and Terry allege a fiduciary relationship based on other

factors, unrelated to the Operating Agreement or the organizational structure of

Bennett Farm. They point to their sibling relationship and the allegedly greater

business experience and financial resources of Graham, Ann, and Jim. (Compl.

¶¶ 86, 87.) It is debatable whether these factors, even if taken as true, could override

the Operating Agreement. “Especially when the members have bargained for

comprehensive terms to govern their relationship, the imprudent imposition of

fiduciary duties could undermine the contractual nature of an operating agreement.”

Strategic Mgmt. Decisions, 2017 NCBC LEXIS 69, at *11.

32. In any event, the allegations are facially insufficient to plead the existence

of a fiduciary relationship. “Only when one party figuratively holds all the cards—

all the financial power or technical information, for example—have North Carolina

courts found that the special circumstance of a fiduciary relationship has arisen.”

Highland Paving Co. v. First Bank, 227 N.C. App. 36, 42, 742 S.E.2d 287, 292 (2013)

(citation and quotation marks omitted). Here, no individual sibling held all the cards.

Each member affirmatively represented that he or she possessed “such expertise,
knowledge, and sophistication in financial and business matters generally, and in the

type of transactions in which [Bennett Farm] proposes to engage in particular,” to be

able to evaluate the merits and risks of membership in the company. (Op. Agr.

§ 11.2.)

33. Furthermore, the other allegations in the second amended complaint refute

the existence of a relationship of confidence or trust. Bert III and Terry deny ever

having given managerial authority to their siblings. (See Compl. ¶¶ 26, 27, 82(b).)

In addition, they repeatedly voted against the actions taken by Graham, Ann, and

Jim that form the basis of this lawsuit. (See Compl. ¶¶ 46, 47, 48.) They also refused

to satisfy capital calls. (See Compl. ¶ 78.) Simply put, even taking the allegations of

the second amended complaint as true, this is not the rare familial relationship that

gives rise to a fiduciary relationship. See White v. Hyde, 2016 NCBC LEXIS 74, at

*21 (N.C. Super. Ct. Oct. 4, 2016) (rejecting fiduciary relationship between sibling

co-owners of LLC).

34. In their briefing, Bert III and Terry make two additional, and much

narrower, arguments.6 First, they contend that Graham, Ann, and Jim collectively

own more than 50% of Bennett Farm and therefore owe a fiduciary duty as controlling

members. (See Opp’n 16.) This duty, if it existed, would have applied only after Terry

sold her membership interest in February 2016. (See Comp. ¶¶ 57, 58.)

6 The second amended complaint also makes reference to a family ledger, which apparently

records distributions from the Bennett parents to their children. (See Compl. ¶ 72.) The
Bennett parents delegated responsibility for maintaining the ledger to Graham at some point.
(See Compl. ¶ 74.) Bert III and Terry suggest this is another factor supporting the existence
of a fiduciary duty but give no reasoned explanation for why that would be so, and the Court
cannot discern one. No claim appears to arise out of mismanagement of the ledger.
35. Some recent cases have stated that “a holder of a majority interest who

exercises control over the LLC owes a fiduciary duty to minority interest members.”

Fiske v. Kieffer, 2016 NCBC LEXIS 22, at *9 (N.C. Super. Ct. Mar. 9, 2016). “The

scope of this exception, borrowed from precedents governing corporations, remains

unsettled,” and “[t]his Court has cautioned against a broad application because of the

fundamental differences between LLCs and corporations.” Strategic Mgmt.

Decisions, 2017 NCBC LEXIS 68, at *11. In the corporate context, for example, courts

have held that a controlling shareholder may include “a group of shareholders with

an aggregated majority interest acting in concert.” Brewster v. Powell Bail Bonding,

Inc., 2018 NCBC LEXIS 76, at *10 (N.C. Super. Ct. July 26, 2018). But this Court

has routinely refused to extend these precedents to LLCs because minority members

have much greater ability to negotiate for protections in the operating agreement.

See, e.g., HCW Ret. & Fin. Servs., LLC v. HCW Employee Benefit Servs., LLC, 2018

NCBC LEXIS 73, at *47 n.102 (N.C. Super. Ct. July 14, 2015); Fiske, 2016 NCBC

LEXIS 22, at *10; Blythe v. Bell, 2013 NCBC 18, at *13–14 (N.C. Super. Ct. Apr. 8,

2013).

36. The Court adheres to these decisions, which Bert III and Terry do not

address or distinguish. As alleged, Bennett Farm does not have and has never had a

single majority member. (See Compl. ¶¶ 24, 36, 68.) The allegation that Graham,

Ann, and Jim collectively own a majority interest does not give rise to a fiduciary duty

to minority members.
37. Second, Terry argues that Graham, Ann, and Jim owed her a fiduciary duty

of disclosure when purchasing her interest. (Compl. ¶¶ 51–58, 88.) The briefing does

little to explain this position, which apparently would apply only to Terry and only to

the purchase of her interest. Terry cites no law supporting the proposition that an

LLC member owes a fiduciary duty when negotiating a contract to purchase another’s

interest. Rather, Terry relies on another precedent from the law governing

corporations related to a director’s purchase of shares from a shareholder. See

Lazenby v. Godwin, 40 N.C. App. 487, 492, 253 S.E.2d 489, 491 (1979). To the extent

Terry intends to suggest that a manager of an LLC (akin to a corporate director) owes

a similar duty to a member (akin to a shareholder), the claim is contradicted by her

denial that Graham, Ann, and Jim are, in fact, the managers of Bennett Farm.

38. At bottom, the members of Bennett Farm decided to organize their

relationship through an LLC. Their rights and duties, as members, are and should

be governed by the Operating Agreement, not general principles of fiduciary

relationships. Bert III and Terry have not pleaded facts sufficient to show the

existence of such a relationship between them, on the one hand, and Graham, Ann,

and Jim, on the other.7

39. Accordingly, the Court grants the motion to dismiss the claim for breach of

fiduciary duty as to the actions of Graham, Ann, and Jim on behalf of Bennett Farm.

The Court need not and does not address alternative arguments made in support of

the motion.

7 This excludes Ann’s role as trustee for Terry, which is the subject of a separate claim and

addressed below.
2. Breach of Fiduciary Duty Based on Ann’s Actions as Trustee

40. The second claim for breach of fiduciary duty relates to Ann’s role as trustee

for Terry. There is no dispute that Ann, as trustee, owes a fiduciary duty to Terry,

as beneficiary of the trust. See Wachovia Bank & Tr. Co. v. Johnston, 269 N.C. 701,

711, 153 S.E.2d 449, 457 (1967) (observing “that one of the most fundamental duties

of the trustee throughout the trust relationship is to maintain complete loyalty to the

interests of” the beneficiary).

41. Ann argues that the claim should be dismissed for two other reasons. She

argues, first, that Terry failed to join all necessary parties because Ann’s co-trustee

was not named as a party. (See Br. in Supp. 22–23.) She also argues that the second

amended complaint fails to allege a breach of her duty or any injury resulting from

it. (See Br. in Supp. 23.) Neither argument is persuasive.

42. Whether a trustee is a necessary party depends on the nature of the asserted

claims. See, e.g., Wash. Mut. Bank v. Hargrove, 2007 N.C. App. LEXIS 12, at *7 (2007)

(unpublished) (concluding that trustee was not a necessary party); Tart v. Byrne, 243

N.C. 409, 411, 90 S.E.2d 692, 694 (1956) (concluding that trustee was a necessary

party as to some but not all claims). Ann points to the general rule that all trustees

(and all beneficiaries) are necessary parties “in suits, respecting the trust property,

brought either by or against the trustees.” Dunn v. Cook, 204 N.C. App. 332, 337, 693

S.E.2d 752, 756 (2010) (citation and quotation marks omitted). It is a rule that stems

from the broader requirement that “all parties claiming an interest in contested

assets must be a party to a suit affecting those assets.” Window World of St. Louis,
Inc. v. Window World, Inc., 2015 NCBC LEXIS 79, at *24 (N.C. Super. Ct. Aug. 10,

2015).

43. Neither the rule nor its underlying rationale applies here. As alleged,

Terry’s claim does not create a dispute over the property in her trust. It is instead a

claim for money damages against Ann based on Ann’s actions as trustee. See In re

Jacobs, 91 N.C. App. 138, 145, 370 S.E.2d 860, 865 (1988) (“General common law

principles hold that a trustee’s breach of trust subjects him to personal liability.”).

This claim can be decided without affecting the trust property or infringing the

property rights possessed by the trustees or beneficiary. It was therefore not

necessary to name Ann’s co-trustee as a party.

44. Terry’s allegations are also sufficient to state a claim for relief. Taken as

true, the second amended complaint shows that Ann joined with Graham and Jim in

an effort “to get Terry to sell out of the entire property now.” (Compl. ¶ 52.) Ann

proposed telling Terry that she would need to “pony up” a sum of money, apparently

to permit Bennett Farm to buy John and Jeanne’s property, in the hopes that Terry

would instead sell her membership interest. (Compl. ¶ 52.) Graham did just that by

presenting Terry with the prospect of contributing her share in a capital call or taking

a sizeable loan. (Compl. ¶ 56.) Ann then refused to make trust assets available to

Terry to meet a capital call, prompting Terry to sell her membership interest as

planned. (Compl. ¶ 57.) Construed liberally, these allegations are sufficient to allege

that Ann did not act in Terry’s interests but instead used her status as trustee as

leverage in Bennett Farm’s internal feud, all to Terry’s detriment.
45. Accordingly, the Court denies the motion to dismiss Terry’s claim for breach

of fiduciary duty against Ann in her role as trustee.

3. Constructive Fraud

46. The claim for constructive fraud is premised on the same facts that underlie

the two fiduciary-duty claims. (See Compl. ¶¶ 115–19.) The dismissal of the first

claim for breach of fiduciary duty—the Bennett Farm-centered claim—also requires

dismissal of the claim for constructive fraud to the extent it is based on the same

facts. Bert III and Terry have standing to bring the claim individually, for the reasons

explained above. But they have not sufficiently alleged the existence of a fiduciary

relationship, which is a necessary element for constructive fraud just as it is for

breach of fiduciary duty. See White v. Consol. Planning, Inc., 166 N.C. App. 283, 293,

603 S.E.2d 147, 155 (2004); see also Brown v. Secor, 2017 NCBC LEXIS 65, at *18

(N.C. Super. Ct. July 28, 2017).

47. Terry’s claim against Ann in her role as trustee, on the other hand, may

proceed. As noted, Ann does not challenge the existence of a fiduciary relationship.

(See Br. in Supp. 23.) Constructive fraud also requires a showing that the defendant

took advantage of the fiduciary relationship “to benefit himself” or herself. White,

166 N.C. App. at 294, 603 S.E.2d at 156. Although Graham, Ann, and Jim’s brief

argues that this element is absent as it relates to their actions on behalf of Bennett

Farm, they do not make the same argument about Ann’s alleged actions as trustee.

(See Br. in Supp. 17–18.) Accordingly, the Court finds no persuasive basis to dismiss

Terry’s claim against Ann for constructive fraud.
48. The Court therefore grants the motion to dismiss the claim for constructive

fraud against Graham and Jim but denies the motion as to the claim against Ann to

the extent it is based on her role as Terry’s trustee.

C. Contract Claims

49. Bert III and Terry allege that the transfer of Louise’s interest in Bennett

Farm to Graham, Ann, and Jim was improper under sections 9.1 and 9.2 of the

Operating Agreement or, alternatively, the same sections of the Amended Operating

Agreement. (See Compl. ¶ 104.) They assert claims for breach of contract and breach

of the implied covenant of good faith and fair dealing. The parties’ briefs treat the

two claims as one, and the Court therefore does as well.

50. To state a claim for breach of contract, a party must allege that there is a

valid contract and that a term of the contract was breached. See Poor v. Hill, 138

N.C. App. 19, 26, 530 S.E.2d 838, 843 (2000). In every contract, including LLC

operating agreements, there is an implied covenant “that neither party will do

anything which injures the right of the other to receive the benefits of the agreement.”

Pro-Tech Energy Solutions, LLC v. Cooper, 2015 NCBC LEXIS 76, at *21 (N.C. Super.

Ct. July 30, 2015) (quoting Bicycle Transit Auth., Inc. v. Bell, 314 N.C. 219, 228, 333

S.E.2d 299, 305 (1985)).

51. According to Graham, Ann, and Jim, the Amended Operating Agreement is

a valid contract, but the second amended complaint does not adequately allege that

it was breached. They contend that section 9.2, by its terms, permitted Louise to sell
her membership interest to some of her siblings without first offering it to all. (See

Br. in Supp. 21.)

52. As Bert III and Terry correctly note, though, section 9.2 of the Amended

Operating Agreement permits transfers by one sibling to another “for estate and gift

tax planning purposes.” (Am. Op. Agr. § 9.2.) Transfers to family members for other

purposes (or to non-family members for any reason) are permitted only if a number

of conditions are satisfied, including first offering the interest to Bennett Farm. (See

Am. Op. Agr. § 9.2(a)–(d).) The second amended complaint alleges that Louise

admitted to selling “her interest primarily to get away from family disharmony and

avoid paying legal fees,” not to plan for any estate or gift tax considerations. (Compl.

¶ 69.) At the Rule 12 stage, this allegation is sufficient to plead that the transfer was

improper and, therefore, a breach of section 9.2.

53. The original Operating Agreement is structured differently. It has no

provision permitting transfers to siblings for estate or gift tax purposes. For any

proposed transfer, a member must offer his or her interest first to Bennett Farm. (See

Op. Agr. § 9.2(a)–(d).) Thus, in the event the original Operating Agreement remains

operative, as Bert III and Terry contend, the allegations relating to Louise’s transfer

of her membership would also state a claim for its breach.

54. The Court therefore denies the motion to dismiss the claims for breach of

contract and the implied covenant of good faith and fair dealing.
D. Conspiracy

55. There is no “separate civil action for civil conspiracy in North Carolina.”

Dove v. Harvey, 168 N.C. App. 687, 690, 608 S.E.2d 798, 800 (2005). Rather, “[t]he

action is for damages caused by acts committed pursuant to a formed conspiracy,

rather than by the conspiracy itself.” Reid v. Holden, 242 N.C. 408, 414–15, 88 S.E.2d

125, 130 (1955). Thus, a claim for civil conspiracy requires “(1) an agreement between

two or more individuals; (2) to do an unlawful act or to do a lawful act in an unlawful

way; (3) resulting in injury to the plaintiff inflicted by one or more of the conspirators;

and (4) pursuant to a common scheme.” Lendingtree, LLC v. Intercontinental Capital

Grp., 2017 NCBC LEXIS 54, at *14–15 (N.C. Super. Ct. June 23, 2017) (quoting

Piraino Bros., LLC v. Atl. Fin. Grp., Inc., 211 N.C. App. 343, 350, 712 S.E.2d 328, 333

(2011)).

56. Bert III and Terry base their conspiracy claim on the wrongful acts

underlying the claims for breach of fiduciary duty and breach of contract. The second

amended complaint alleges, for example, that Graham, Ann, and Terry conspired to

take control of Bennett Farm, to exercise that control without the other members’

consent, to deprive Terry of access to her trust funds, and to acquire Louise’s

membership interest for themselves. (See Compl. ¶¶ 111(d), 111(g), 112.)

57. Graham, Ann, and Jim argue that the conspiracy claim must be dismissed

if the underlying claims are dismissed. (See Br. in Supp. 18–19.) As to the Bennett

Farm-centered claim for breach of fiduciary duty, the Court agrees. Having dismissed

that underlying claim, the Court also dismisses the conspiracy claim to the extent
based on the same acts. See Azure Dolphin, 2017 NCBC LEXIS 90, at *28–29

(dismissing conspiracy claim). The allegations specific to Ann’s actions in her role as

trustee and to the purchase of Louise’s membership interest, however, are sufficient

to plead an unlawful act for purposes of the conspiracy claim.8 See Brewster, 2018

NCBC LEXIS 76, at *15 (denying motion to dismiss conspiracy claim when

underlying claim survived).

58. Graham, Ann, and Jim also argue that “Plaintiffs have not alleged any facts

to establish the existence of an agreement” between them to perform any unlawful

acts. (Br. in Supp. 19.) This short, undeveloped argument is unconvincing. The

second amended complaint identifies several communications between Graham, Ann,

and Jim that tend to support the existence of such an agreement. (See, e.g., Compl.

¶¶ 52, 55.)

59. The Court therefore denies the motion to dismiss the claim for conspiracy to

the extent that claim is based on Ann’s alleged breach of fiduciary duty in her role as

trustee and on Defendants’ alleged breach of contract and the implied covenant of

good faith and fair dealing.

E. Declaratory Judgment

60. The declaratory-judgment claim is better viewed as nine requests for

distinct, but often overlapping, declarations: (1) that the Amended Operating

Agreement is invalid; (2) that Bennett Farm has no validly elected managers; (3) that

8 There is an open question in North Carolina as to whether a breach of contract may support

a claim for conspiracy. Some courts in other jurisdictions have held that it may not. See, e.g.,
Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 7 Cal. 4th 503, 522 (1994). Bert III and
Terry have not raised this issue, however, and the Court therefore does not address it.
Graham, Ann, and Jim have no managerial authority over Bennett Farm; (4) that

capital calls require member consent; (5) that Bennett Farm’s acquisition of the right

of first refusal on John’s property was not validly authorized; (6) that Bennett Farm

also had no authority to exercise or enforce the right of first refusal; (7) that the

purchase of Terry’s membership interest was improper or fraudulent; (8) that Bert

may access Bennett Farm’s property; and (9) that Bert, Graham, Ann, Jim, and

Louise held an equal membership interest in Bennett Farm as of April 13, 2018. (See

Compl. ¶¶ 82, 83.) Most, if not all, of the requested declarations turn on the authority

of Graham, Ann, and Jim to act as managers of Bennett Farm.9 The effect, if Bert III

and Terry are successful, would be to unravel years of activity by Bennett Farm,

including changes to its assets and ownership structure.

61. Our appellate courts have stressed that “[a] motion to dismiss for failure to

state a claim is seldom appropriate ‘in actions for declaratory judgments, and will not

be allowed simply because the plaintiff may not be able to prevail.’” Morris v. Plyler

Paper Stock Co., 89 N.C. App. 555, 557, 366 S.E.2d 556, 558 (1988) (quoting N.C.

Consumers Power, Inc. v. Duke Power Co., 285 N.C. 434, 439, 206 S.E.2d 178, 182

(1974)). Rather, a motion to dismiss a declaratory-judgment claim is appropriate only

“‘when the complaint does not allege an actual, genuine existing controversy,’” which

9 Graham, Ann, and Jim contend that Bert III and Terry lack standing to seek these
declarations for the same reasons asserted as to the claim for breach of fiduciary duty. As
noted, the Court concludes that Bert III and Terry have sufficiently alleged a concrete,
individual injury. It is also unclear how the Barger framework, with its focus on diminution
of stock value, applies in the context of declaratory relief.
prevents a court from entering a “purely advisory opinion.” Legalzoom.com, Inc. v.

N.C. State Bar, 2012 NCBC LEXIS 49, at *9 (N.C. Super. Ct. Aug. 27, 2012).

62. Graham, Ann, and Jim argue that nearly all of the requested declarations

are improper efforts to nullify contracts—Bennett Farm’s Operating Agreement, the

right of first refusal, and other contracts transferring membership interests. (See Br.

in Supp. 19–20.) They point to cases stating that the Declaratory Judgment Act “is

not a vehicle for the nullification of [written] instruments.” Farthing v. Farthing, 235

N.C. 634, 635, 70 S.E.2d 664, 665 (1952). The North Carolina Court of Appeals,

however, has rejected this argument. Farthing held only that “the validity of a will

is a probate matter” and cannot be held void through a declaratory-judgment action.

Bueltel v. Lumber Mut. Ins. Co., 134 N.C. App. 626, 630, 518 S.E.2d 205, 208 (1999).

“The validity of a contract, however, is a different matter,” and this Court “certainly

may determine the validity and enforceability of a contract under the Declaratory

Judgment Act.” Id.; see also, e.g., Allen v. Ferrera, 141 N.C. App. 284, 292, 540 S.E.2d

761, 767 (2000) (following Bueltel); Tumlin v. Tuggle Duggins P.A., 2018 NCBC

LEXIS 217, at *40 (N.C. Super. Ct. Dec. 18, 2018) (same); Haigh v. Superior Ins.

Mgmt. Grp., 2017 NCBC LEXIS 100, at *20–21 (N.C. Super. Ct. Oct. 24, 2017) (same).

63. The other arguments go toward the merits of the requested declarations. In

their opening brief, Graham, Ann, and Jim contend that Bert III has not alleged that

he ever possessed the right to access Bennett Farm’s property and that, in any event,

it was reasonable for them to deny access to the property for members who fail to

satisfy capital calls. (See Br. in Supp. 20–21.) In their reply brief, Graham, Ann, and
Jim argue more comprehensively that, as a matter of law, they are Bennett Farm’s

managers and that Bert III and Terry are bound by the Amended Operating

Agreement. (See Reply Br. Supp. Mot. Dismiss 1–3, ECF No. 39.)

64. The question, though, is not whether Bert III and Terry will prevail on their

claim. It is only whether they have identified an actual, genuine controversy. See

Johnson’s Landing Homeowners Ass’n, Inc. v. Hotwire Communs., LLC, 2018 NCBC

LEXIS 113, at *11 (N.C. Super. Ct. Oct. 29, 2018); see also Gvest Real Estate, LLC v.

JS Real Estate Invs., LLC, 2017 NCBC LEXIS 32, at *10 (N.C. Super. Ct. Apr. 6,

2017) (declining to address “arguments more appropriately made in the context of a

motion for judgment on the pleadings under Rule 12(c) or a motion for summary

judgment under Rule 56”). The parties’ views about which members are entitled to

exercise managerial authority over Bennett Farm are irreconcilable, giving rise to a

definite, concrete controversy. As a result, “[t]he parties are entitled to a declaration

of their rights and liabilities and the action should be disposed of only by a judgment

declaring them.” Nationwide Mut. Ins. Co. v. Roberts, 261 N.C. 285, 288, 134 S.E.2d

654, 657 (1964).

65. The Court therefore denies the motion to dismiss the declaratory-judgment

claim.

F. Judicial Dissolution

66. In their final claim, Bert III and Terry seek a decree judicially dissolving

Bennett Farm. By statute, a member of an LLC may seek dissolution if “(i) it is not

practicable to conduct the LLC’s business in conformance with the operating
agreement and [governing statutes] or (ii) liquidation of the LLC is necessary to

protect the rights and interests of the member.” N.C. Gen. Stat. § 57D-6-02(2). Bert

III and Terry invoke both grounds. (See Compl. ¶ 121.)

67. Graham, Ann, and Jim begin by arguing that Terry lacks standing to seek

dissolution because she is no longer a member of Bennett Farm. (See Br. in Supp.

22.) The Court agrees. Although Terry hopes to invalidate or revoke the transfer of

her membership through this action, she is currently not a member of Bennett Farm.

(See Compl. ¶ 2.) Section 57D-6-02(2) does not authorize courts to dissolve limited

liability companies in proceedings brought by former members. As a result, Terry

lacks standing to seek judicial dissolution. See Slaughter v. Winner Enters. of

Carolina Beach, LLC, 2019 NCBC LEXIS 1, at *25–26 (N.C. Super. Ct. Jan. 7, 2019)

(granting motion to dismiss); Finkel v. Palm Park, Inc., 2018 NCBC LEXIS 112, at *9

(N.C. Super. Ct. Oct. 24, 2018) (same); Azure Dolphin, 2017 NCBC LEXIS 90, at *17

(same).

68. There is no dispute, however, that Bert III is a member of Bennett Farm

and has standing. Graham, Ann, and Jim contend that his claim fails because he has

not alleged that it is impracticable to operate Bennett Farm or that liquidation is

necessary to protect his interests. The management disagreements identified in the

complaint, they contend, are insufficient to warrant dissolution. (See Br. in Supp.

22.)

69. Bert III responds that his siblings have exercised illegitimate authority over

Bennett Farm for nearly a decade. He believes that, if his claims are successful, it
would be impossible to unwind all of their actions during that time, leaving

dissolution as the only meaningful path forward. (See Opp’n 25.) Bert III also looks

to dissolution case law in the corporate context, which permits minority shareholders

in closely held corporations to seek liquidation when their reasonable expectations

have been frustrated. See Meiselman v. Meiselman, 309 N.C. 279, 299, S.E.2d 551,

563 (1983).

70. After careful consideration, the Court concludes that it would be premature

to dismiss Bert III’s claim for judicial dissolution. The second amended complaint

alleges that virtually every action taken by Bennett Farm since its inception is

tainted by his siblings’ usurpation of managerial authority. If Bert III is able to

support those allegations after discovery and establish his claims to the satisfaction

of a jury, it would raise thorny questions about Bennett Farm’s ability to bring itself

into compliance with its governing operating agreement, as well as whether nearly a

decade of unlawful management has left liquidation as the only way to protect Bert

III’s rights. In addition, our courts have not yet decided whether and to what extent

the principles of Meiselman apply to actions under section 57D-6-02(2). See Brady v.

Van Vlaanderen, 2017 NCBC LEXIS 61, at *31–32 (N.C. Super. Ct. July 19, 2017).

As this Court has observed, it is prudent to address such questions on a more fully

developed record. See Pure Body Studios Charlotte, LLC v. Crnalic, 2017 NCBC

LEXIS 98, at *13 (N.C. Super. Ct. Oct. 18, 2017).
71. Accordingly, the Court concludes that Terry lacks standing to seek judicial

dissolution and grants the motion to dismiss her claim. The Court denies the motion

to dismiss Bert III’s claim for dissolution.

III.
CONCLUSION

72. For the reasons discussed above, the Court ORDERS as follows:

a. The motion to dismiss the claim for breach of fiduciary duty based on the

actions of Graham, Ann, and Jim on behalf of Bennett Farm is GRANTED. The

claim is DISMISSED with prejudice.

b. The motion to dismiss the claim for breach of fiduciary duty against Ann

in her role as trustee is DENIED.

c. The motion to dismiss the claim for constructive fraud is DENIED to the

extent based on Ann’s actions in her role as trustee and GRANTED to the extent

based on the actions of Graham, Ann, and Jim on behalf of Bennett Farm.

d. The motion to dismiss the claims for breach of contract and breach of

good faith and fair dealing is DENIED.

e. The motion to dismiss the claim for civil conspiracy is DENIED to the

extent based on Ann’s actions in her role as trustee and on the claims for breach

of contract and the implied covenant of good faith and fair dealing. It is

GRANTED to the extent based on the actions of Graham, Ann, and Jim on behalf

of Bennett Farm.

f. The motion to dismiss the claim for declaratory judgment is DENIED.
g. The motion to dismiss Terry’s claim for judicial dissolution is

GRANTED, and the claim is DISMISSED without prejudice. The motion to

dismiss Bert III’s claim for judicial dissolution is DENIED.

73. The Court further ORDERS the parties to file their case management

report and a proposed case management order within fourteen days of the date of this

Order and Opinion. See Business Court Rule 9.2.

SO ORDERED, this the 15th day of March, 2019.

/s/ Adam M. Conrad
Adam M. Conrad
Special Superior Court Judge
for Complex Business Cases