In a recent motion, we asserted on behalf of a client that although the Operating Agreement did not contain express language creating a fiduciary duty that such a fiduciary duty was created by the standards set for exculpation and indemnification.  That standard required that manager refrain from actions that are done in bad faith, with gross negligence, with willful misconduct or in violation of law.  In reliance on the TM 2008 case the court ruled that there was no express fiduciary duties and therefore the standard we attempted to establish through the exculpation and indemnity clause did not establish a fiduciary duty.

This is the second Superior Court judge to deny fiduciary duty if such duty is not expressed.  In my view, this Operating Agreement clearly set the standards expected of managers but because the standards were not in the right place in the Operating Agreement or added into a specific fiduciary duty section, the judge was not convinced.