Whether Blake W. has law rights and privileges to the property located in Kauai Hawaii.
Going by the provisions of the SPDCMJ Holdings LLC operating agreement Blake W. is designated as a manager of the LLC. Under such designation, Blake is mandated to carry out the day to day activities of the LLC as dictated under article 5 of the agreement, with particular emphasis to sub-article 5.3.
Sub-article 5.3 states that “Managers shall manage and control the affairs of the Company and shall have the power and authority to do all things necessary or proper to carry out the purposes and objectives of the Company pursuant to the terms of this Agreement, except as otherwise provided for herein. Without limiting the generality of the foregoing, the Managers may make, execute, deliver and perform any and all contracts, commitments, undertakings, consents, restrictions, covenants, warranties, expressions of investment intent and other agreements or arrangements, and may engage in any and all activities and transactions, as may, in the opinion of the Managers, be necessary or appropriate to carry out such purposes and objectives.”
Considering Blake’s conduct towards acquisition of the property located in Kauai Hawaii i.e. engaging the seller, negotiating with the seller and entering into contractual agreements on behalf of the LLC, it is presumed that Blake did all things necessary or proper to carry out the purposes and objectives of the Company. Up to that extent, Blake has no claim whatsoever to the property.
However, there are exceptions to this presumption. “In an action to quiet title, the burden is on the plaintiff to prove title in and to the land in dispute, and, absent such proof, it is unnecessary for the defendant to make any showing. State v. Zimring, 58 Haw. 106, 110, 566 P.2d 725, 729 (1977). While it is not necessary for the plaintiff to have perfect title to establish a prima facie case, he must at least prove that he has a substantial interest in the property. If Blake can demonstrate that he contributed his personal finances towards purchase and acquisition of the property, then he may be able to claim an interest in the property. “A fact is material if proof of that fact would have the effect of establishing or refuting one of the essential elements of a cause of action or defense asserted by the parties.” Hulsman v. Hemmeter Dev. Corp., 65 Haw. 58, 61, 647 P.2d 713, 716 (1982). In other words, a material fact is one upon which the outcome of the litigation depends. Where the moving party is the plaintiff, who will ultimately bear the burden of proving plaintiff’s claim at trial, the plaintiff must establish, by the quantum of evidence required by the applicable substantive law, each element of its claim for relief.. Beamer v. Nishiki, 66 Haw. 572, 578, 670 P.2d 1264, 1270 (1983). That is, the plaintiff must establish as a matter of law each element of its claim for relief by the proper evidentiary standard applicable to that claim
Thus, aside from the documents provided by Blake, if further prove can be provided to demonstrate that Blake went above and beyond his mandate under article 5 of the LLC operating agreement, then a civil action may grant either (1) Declaration of an interest in the property or (2) compensation for Blake’s contribution towards purchase of the property (possibly with interest).
NOTE: Actions undertaken must exceed the scope of article 5 of the LLC. Also, such actions must be strictly supported with evidence.
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