Burnham Brown Obtains Summary Judgment In International Commercial Dispute
Burnham Brown partners Gregory Brown, Derek Lim and Rohit Sabnis obtained summary judgment in favor of a member of a Limited Liability Company ("LLC") in litigation involving damages alleged to exceed $10,000,000. The plaintiff, a Chinese manufacturer, claimed that the defendant LLC, a designer and supplier of lighting products, was liable to it for Breach of Contract and Goods Sold and Delivered. In response, the LLC filed a counter-claim generally asserting that the products provided to it by the Chinese manufacturer were inadequate. In addition to making claims against the LLC, the Chinese manufacturer's complaint asserted that the Court should pierce the corporate veil such that the LLC's individual members could be held personally liable for the actions of the LLC. In attempting to support this theory of "alter ego" liability, plaintiff argued, primarily, that the LLC was undercapitalized due to the bad faith actions of its members. Burnham Brown's motion for summary judgment, brought on behalf of one of the LLC's members, presented evidence demonstrating that the LLC was formed and conducted its business for legitimate purposes well in advance of the parties' dispute, that it was adequately capitalized and that its members properly complied with all corporate formalities required of a California LLC. Plaintiff opposed the motion by submitting evidence that allegedly showed the LLC's members put their own interests ahead of the LLC in conducting the company's business. In response, Burnham Brown's attorneys successfully persuaded the Court to exclude certain of plaintiff's evidence as inadmissible and demonstrated that the remainder was not sufficient to create a disputed issue of fact. The Court granted judgment in favor of the LLC's member thus rendering his personal assets unavailable to satisfy any claim of the Chinese manufacturer.