## Facts

- C. Allison Defoe Reese and Nicole A. Newman co-owned ANR Construction Management, LLC, a District of Columbia LLC formed in 2006.
- After management disputes, Newman sent Reese a written notice of intent to withdraw, dissolve, and wind up the business (May 2012).
- Newman alleged that Reese then excluded her from company resources, including bank accounts and remote access to files and email, and ended her salary and health benefits.
- Newman sued in D.C. Superior Court asserting claims including breach of contract, breach of fiduciary duty, conversion, accounting, and judicial dissolution (later adding negligence and fraud).
- Reese counterclaimed, including seeking judicial dissociation of Newman from the LLC and damages based on related contract and tort theories.
- After trial, a jury awarded Newman $19,000 on conversion, found statutory grounds for both judicial dissolution of ANR and forced dissociation of Newman, and rejected the parties’ remaining claims.
- The trial judge selected judicial dissolution as the remedy and entered judgment.

## Issues

1. Whether the D.C. LLC statute requires a trial court to order forced dissociation once the fact-finder finds statutory grounds for dissociation, based on “shall be dissociated” language.
2. If the statute leaves remedial choice to the court, whether ordering judicial dissolution instead of dissociation was an abuse of discretion.

## Decision

- The District of Columbia Court of Appeals affirmed.
- The court held the LLC statute gives the trial court discretion to choose among dissolution, dissociation, and other remedies, even when grounds for dissociation are found.
- The court held the trial court did not abuse its discretion by ordering judicial dissolution given the jury’s findings and the evidence of breakdown in the owners’ relationship.

## Legal Principles

- “Shall be dissociated” in the LLC dissociation provision describes the legal status that follows if a judicial expulsion occurs; it does not mandate that a court must order expulsion whenever statutory grounds are proven.
- Statutory provisions should be read together to avoid conflict; the dissolution provision’s authorization of alternative remedies supports a discretionary remedial scheme rather than a mandatory dissociation rule.
- Where a statute provides equitable remedial options in LLC member disputes, appellate review of the trial court’s selected remedy is for abuse of discretion.

## Conclusion

The court held that, under the District’s LLC statute, proof of statutory grounds for forced dissociation does not compel dissociation; the trial court may instead order dissolution or another authorized remedy, and dissolution was within the court’s discretion on these facts.


Reese v. Newman, 131 A.3d 880 (D.C. 2016)