Corporate – Special-purpose LLCs

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Where a plaintiff has claim membership interests in special-purpose limited liability companies, his motion for summary judgment should be allowed in part and denied in part based on language in operating agreements.

“Scott A. Weymouth (‘plaintiff’), and brothers Gregory Botsivales (‘Greg’) and Harry Botsivales (‘Harry,’ and together with Greg, ‘the Botsivaleses’) worked together for many years as real estate developers at Arista Development, LLC (‘Arista’). Plaintiff left Arista in 2024. Soon after, he filed Civil No. 24-2426 against the Botsivaleses and others associated with Arista to recover distributions allegedly due on his membership interests in special-purpose LLCs formed during Arista’s development efforts. Three months later, he filed Civil No. 24-3204 for access to books and records. Plaintiff now seeks summary judgment regarding his membership in the special-purpose LLCs. For the following reasons, the motion must be allowed in part. …

“In 2006, the Botsivaleses and plaintiff signed a Memorandum of Understanding (the ‘2006 MOU’) that defined their business relationship. …

“As set out in the 2006 MOU, when an Arista project reached a certain stage, a single-purpose entity LLC (‘SPE LLC’) would be formed to hold title to the real estate. Typically, the Botsivaleses and plaintiff then executed an operating agreement reflecting their interests in the SPE LLC. The record includes operating agreements for the following SPE-LLCs: Arista BHR LLC, Arista Troutville LLC, Arista CB Foxboro LLC, Arista Gainesville LLC, Arista Hyannis LLC, Arista KDH LLC, Arista Charlotte LLC, Arista Middleboro LLC, Arista Sanford LLC; and Arista Spencer LLC (together, ‘the Operating Agreements’). …

“Schedule A to the operating agreement for Crugnale Arista Attleboro LLC (‘Crugnale Operating Agreement’) lists Weymouth as having a 10% membership interest in that LLC, which was formed for a development Arista undertook with another real estate development firm. …

“As noted, the sole issue before me is whether plaintiff is a member of the SPE LLCs. Upon review, and consistent with the unambiguous language of the Operating Agreements and the Crugnale Operating Agreement, I conclude that plaintiff is a member of these LLCs. As to the other Arista SPE LLCs, which either lack an operating agreement or for which no operating agreement was produced, material issues of disputed fact remain. …

“Here, each of the Operating Agreements unambiguously list plaintiff as a member and impose restrictions and requirements for membership transfer and withdrawal. There is no evidence (and defendants do not argue) that Arista or the Botsivaleses followed these provisions to remove or alter plaintiff’s membership in any SPE LLC; that the Operating Agreements are somehow void or unenforceable; or that the membership language is somehow invalid. Indeed, the evidence reflects the opposite. Plaintiff’s membership in each of these LLCs is consistent with the 2003 and 2006 MOUs, was expressly listed in the Consent Agreements, was relied upon by lending institutions, and was referenced on multiple tax forms. Plaintiff’s membership in these LLCs is established as a matter of law. …

“Plaintiff also argues that he is entitled to a declaration that he is a 25% member of Arista SPE LLCs that do not have operating agreements. In support, he cites the 2006 MOU, which he argues is a binding contract that indicates he is to have a 25% interest in the SPE LLCs to be formed. However, the 2006 MOU is about two decades old, contains no effective dates, and provides that it is ‘temporary.’ Even setting those issues aside and assuming it is binding, which I do not decide, the record contains no evidence about the formation of these other Arista SPE LLCs, why they lack operating agreements, or what plaintiff’s role was in their development. On this sparse record, there exist factual questions that prevent a ruling on summary judgment as to plaintiff’s interest in these SPE LLCs without an operating agreement. …

“Scott A. Weymouth’s Motion for Summary Judgment (Docket #49) is allowed in part insofar as it is hereby declared and adjudged that Scott A. Weymouth is a member with a 25% ownership interest in Arista BHR LLC, Arista Troutville LLC, Arista CB Foxboro LLC, Arista Gainesville LLC, Arista Hyannis LLC, Arista KDH LLC, Arista Charlotte LLC, Arista Middleboro LLC, Arista Sanford LLC, and Arista Spencer LLC; and is a member with a 10% ownership interest in Crugnale Arista Attleboro LLC. The motion is otherwise denied.”

Weymouth v. Pangakis, et al. (Lawyers Weekly No. 09-031-26) (13 pages) (Krupp, J.) (Suffolk Superior Court) (Civil No. 24-2426-BLS1) (March 6, 2026).

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