Claude C. Blanch, Appellant,
Jan Farrell, Marilyn Royce, Donene Briscoe, and Barbara Stuart, Appellees.
District Court, Ogden Department The Honorable Mark R.
DeCaria No. 150907627
M. Yancey, Richard W. Jones, Taylor R. Jones, Bryce M.
Froerer, and Zane S. Froerer, Attorneys for Appellant
K. Bachman and Dana T. Farmer, Attorneys for Appellees
Jill M. Pohlman authored this Opinion, in which Judges Kate
A. Toomey and David N. Mortensen concurred.
Claude C. Blanch, Jan Farrell, Marilyn Royce, Donene Briscoe,
and Barbara Stuart are all equal members of a dissolved
member-managed limited liability company named Five Blanch
Property LLC (the Company). When four of the five members
agreed to list certain assets for sale as part of the
Company's winding up, Blanch objected, filing a petition
opposing the sale and seeking to partition one-fifth of the
assets for himself. The district court dismissed Blanch's
petition with prejudice. Blanch appeals, and we affirm.
The family of the parties-Blanch, Farrell, Royce, Briscoe,
and Stuart-historically owned certain assets, including real
property in Weber County, Utah, and a number of shares in an
irrigation company (collectively, the Assets). In 2005, the
Assets were conveyed to the Company, a then newly formed,
member-managed limited liability company.
Each party is an equal member of the Company. Though the
Company never executed an operating agreement, its articles
of organization stated that the Company would exist for three
years, during which time the members were to meet and
determine how to manage the Assets. The members held
meetings, but they never agreed on the management of the
In 2008, the Company expired with the Assets still titled in
its name. Since its dissolution, however, the Company has not
wound up its affairs or distributed the Assets. In October
2015, as part of its winding up, all of the Company's
members except Blanch voted to list the Assets for sale.
Shortly thereafter, Blanch filed suit against Farrell, Royce,
Briscoe, and Stuart (collectively, Appellees). Blanch
petitioned the court to stop the sale of the Assets and to
carve out his twenty-percent interest so that he could keep
that portion in his name. As an exhibit to his original
petition, Blanch attached a document titled, "Written
Consent of More Than 2/3 of the Members of [the
Company]" (the Written Consent).
The Written Consent was signed in October 2015 by Appellees,
who together held an eighty-percent interest in the Company.
In its recitals, the Written Consent stated that Appellees
desired "to wind up the affairs of the Company";
"to sell all of the [Assets] owned by the Company as
part of the winding-up of the Company, and thereafter
distribute the net proceeds of the sale to the members . . .
according to their interests"; and "to designate
Jan Farrell to negotiate and enter into any and all
agreements necessary to sell all of the [Assets]." The
Written Consent stated that Appellees adopted the resolutions
to, among other things, authorize Farrell to negotiate
agreements and take actions necessary to sell the Assets.
Blanch filed an amended petition in January 2016 in which he
noted that Appellees "have attempted to list all of the
[Assets] . . . for sale," explaining that they
"have proposed and are desirous of selling [the Assets]
and distributing the cash sales proceeds." Blanch
alleged that under the Utah Revised Uniform Limited Liability
Company Act, effective January 1, 2016 (the New Act), all
members of the Company had to unanimously agree to sell the
Assets and that because he did not consent, Appellees lacked
authority to approve the sale. See generally Utah
Code Ann. §§ 48-3a-101 to -1405 (LexisNexis 2015).
Blanch asked the court to enjoin the sale of the Assets and
to require that any sale be approved by the court or the
unanimous agreement of the Company's five members. He
also asked the court to order the settling of the
Company's capital accounts and the distribution of the
Assets in proportion to the members' respective
interests. Alternatively, Blanch asked the court to partition
the Assets, separating his twenty-percent share.
Appellees moved to dismiss Blanch's petition, asserting
that he had failed to state a claim upon which relief could
be granted. In support, Appellees attached the Written
Consent and asserted that they had authority to sell the
Assets and that the Written Consent, which resolved to sell
the Assets, was valid. According to Appellees, when they
signed the Written Consent in October 2015, the Utah Revised
Limited Liability Company Act (the Old Act) applied. See
generally id. §§ 48-2c-100 to -1902 (2010).
And rather than requiring the unanimous approval of members
to sell the Company's assets, the Old Act required only
two-thirds of its members to act. Id. §
48-2c-803(3). Accordingly, Appellees contended that because
they held eighty percent of the interest in the Company, the
Written Consent was properly executed and was not voided by
the New Act.
In so arguing, Appellees noted that the Written Consent
expressly stated that "the authority given [under the
Written Consent] shall be effective until revoked by
[Appellees] and shall continue notwithstanding the automatic
application of [the New Act] on January 1, 2016."
Although Appellees "fully acknowledge[d] that [the New
Act] now governs the wind-up of [the Company]," they
contended that "the Written Consent remains effective as
to the authorization of [the Company] to sell the Assets in
the wind-up" and that Blanch had ...