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Pietrangelo Cook defends hotel owner in dispute over oral agreement

On September 29, 2011, Pietrangelo Cook successfully defended its hotel client in a summary judgment motion brought by the client’s former attorney.  The former lawyer claimed in its lawsuit that Pietrangelo Cook’s client owed him distributions under an oral agreement between the parties.  The Shelby County Chancery Court agreed instead with Pietrangelo Cook that the oral agreement was barred under Tennessee law.

Pietrangelo Cook’s client, a limited liability company that owned and operated a hotel, had entered into an agreement giving its then lawyer an ownership interest in the LLC.  After receiving substantial distributions from the LLC, the former lawyer filed suit claiming that he was entitled to even more distributions beyond what was required under the LLC’s operating agreement.

The Chancellor rejected the former lawyer’s claim, which was based upon an alleged oral agreement with a former Chief Manager of the LLC.  According to the court, because the alleged oral agreement was not included in the Operating Agreement or in any other written agreement, the former lawyer’s claim was barred under  Tenn. Code Ann. § 48-206-101(a)(2) and (a)(5) which provide that an operating agreement must be in writing and shall include “a description and statement of the agreed value of any … services contributed for each membership interest” and “[a]ny right of a member to receive, or of the LLC to make, distributions to a member.”

For more information contact:
Anthony C. Pietrangelo
PH: 901-685-2662
FX: 901-685-6122