Black Water Management LLC v. Sprenkle et al

Filing 15

MEMORANDUM OPINION. Signed by District Judge James R. Spencer on 8/27/2015. (jsmi, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF VIRGINIA
RICHMOND DIVISION

BLACK WATER MANAGEMENT LLC,
Plaintiff,
Civil Action No. 3:15-CV-365

v.
MARK D. SPRENKLE, et al.,
Defendants.

MEMORANDUM OPINION
THIS MATTER is before the Court on a Motion to Dismiss for Lack of Subject Matter
Jurisdiction (“Motion”) (ECF No. 8), filed by Defendant Steve Vorlop (“Vorlop”). Plaintiff filed a
response in opposition on August 13, 2015 (“Opp’n Mem.”) (ECF No. 13). Vorlop subsequently
filed a reply on August 19, 2015 (“Reply Mem.”) (ECF No. 14). The parties have not requested a
hearing on this matter, and the Court finds that oral argument is unnecessary. See E.D. Va. Loc.
Civ. R. 7(J). For the reasons that follow, the Court DENIES the Motion.
I.

BACKGROUND
a. Factual Background
This action arises from an alleged agreement between Jacob A. Schur (“Schur”) and

Defendant Mark D. Sprenkle (“Sprenkle”) to establish Blackwater Management LLC (“BWM
LLC” or the “Company” or “Plaintiff”), a talent management company specializing in
representing musical talent. On June 19, 2008, Schur and Sprenkle signed1 the Operating
Agreement for BWM LLC (hereinafter, the “Operating Agreement”).2 To gain ownership rights
in BWM LLC, the agreement required Schur to invest $34,675.00 in cash and Sprenkle to assign
two management contracts, one with Jesse Harper and one with Colin Healy and the Jet Skis.

1
2

Schur allegedly drafted the Operating Agreement himself.
The Operating Agreement is attached to Plaintiff’s Complaint as Exhibit A.

1

(See Operating agreement, Ex. A.) Schur made an initial investment of $49,675.00. Sprenkle,
however, allegedly failed to assign any contracts to the Company. Contrary to what he told
Schur, Sprenkle had no artist management contracts to assign and he actively concealed the
nonexistence of these contracts from Schur.
Sprenkle allegedly did not care whether he had an ownership interest in BWM LLC, nor
was he concerned with the success of BWM LLC. Instead, he wanted BWM LLC to “bankroll” his
expenses. Sprenkle also allegedly planned to exploit for his benefit any business opportunities
made available through his affiliation with Schur and BWM LLC. Sprenkle convinced the other
defendants to aid him in his efforts.
Schur brought actions in state court in his personal capacity against Sprenkle and the
other defendants to discover the truth and recover the significant damages caused by the
conspirator’s acts and omissions. Schur learned through the testimony of the artists with whom
Sprenkle claimed to have management contracts that Sprenkle never possessed rights in any
artist management contract at the time he purported to assign those contracts to BWM LLC.
b. Procedural Background
Plaintiff filed the present action on June 16, 2015 “to vindicate its rights against these
Defendants who conspired and colluded to strip it of its assets and destroy its contractual
relationships and business expectancies.” (ECF No. 1, “Complaint,” at ¶ 6.) The seven-count
Complaint names the following nine defendants: Sprenkle; Colin Healy3; Kevin Healy; TBT
Network LLC d/b/a Tim Be Told, Timothy Ouyang (“Ouyang”)4, Luan Nguyen (“Nguyen”)5,
Jacob James “Jim” Carisma Barredo (“Barredo”)6, Andrew Daniel Chae (“Chae”)7 (individually
and collectively, “TBT”); and Vorlop8. The Complaint alleges: (1) Declaratory Judgment (Against

Colin Healy is a musician and was at one time the “front man” of the rock band Colin Healy & the
Jetskis.
4 Ouyang is a musician and the front man of the band TBT.
5 Nguyen was a guitarist with TBT.
6 Barredo was the drummer of TBT.
7 Chae is a guitarist with TBT.
8
Vorlop is a friend of TBT who was serving as their road manager.
3

2

Sprenkle) (Count One); (2) Conspiracy to Tortiously Interfere With Contract and/or Business
Expectancies (All Defendants) (Count Two); (3) Conspiracy to Breach Fiduciary Duties (All
Defendants) (Count Three); (4) Conspiracy to Convert Assets of BMW LLC (All Defendants)
(Count Four); (5) Conversion (Against Sprenkle) (Count Five); (6) Breach of Contract (Against
TBT and Colin Healy) (Count Six); and (7) Accounting (Against TBT, Colin Healy, and Sprenkle)
(Count Seven).
Defendant Steve Vorlop (“Vorlop”) was served on July 9, 2015. (ECF No. 6). He then
timely filed the present Motion on July 30, 2015, seeking to dismiss the action for lack of subject
matter jurisdiction.9
II.

LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(1) allows a defendant to move for dismissal of a

claim when the court lacks subject matter jurisdiction over the action. The Court must dismiss
the action if it determines at any time that it lacks subject-matter jurisdiction. Fed. R. Civ. P.
12(h)(3). Under Rule 12(b)(1), the plaintiff bears the burden of proving that jurisdiction exists in
federal court. Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765,
768 (4th Cir. 1991). “In determining whether jurisdiction exists, the district court is to regard to
the pleadings’ allegations as mere evidence on the issue, and may consider evidence outside the
pleadings without converting the proceeding to one for summary judgment.” Id. (citations
omitted). The Court should apply the same standard as it does in a motion for summary
judgment: “the nonmoving party must set forth specific facts beyond the pleadings to show that
a genuine issue of material fact exists.” Id. (citations omitted). The district court must then
weigh the evidence to determine whether jurisdiction is proper. Adams v. Bain, 697 F.2d 1213,
1219 (4th Cir. 1982). A court should grant a Rule 12(b)(1) motion to dismiss if the material

The remaining Defendants, except Sprenkle, executed waivers of service. (ECF No. 11.) Their respective
responses to the Complaint are due on August 31, 2015. (Id.)

9

3

jurisdictional facts are known and the moving party is entitled to prevail as a matter of law.
Richmond, Fredericksburg & Potomac R.R. Co., 945 F.2d at 768.
III.

DISCUSSION

“Federal courts are courts of limited jurisdiction . . . [and] possess only that power
authorized by the Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
375, 377 (1994). For example, federal district courts have original jurisdiction pursuant to 28
U.S.C. § 1332 over civil actions where the amount in controversy exceeds $75,000 and the
matter is between citizens of different states, also known as “diversity jurisdiction.” In order to
maintain an action based upon diversity jurisdiction, complete diversity between the plaintiffs
and defendants must exist at the time the complaint is filed. Martinez v. Duke Energy Corp.,
130 F. App’x 629, 634 (4th Cir. 2005). “Complete diversity” means “that the citizenship of every
plaintiff must be different from the citizenship of every defendant.” Cent. W. Va. Energy Co.,
Inc. v. Mountain State Carbon, LLC, 636 F.3d 101, 103 (4th Cir. 2011) (citation omitted). For
purposes of determining citizenship, a natural person is deemed a citizen of the State in which
he or she is domiciled, see Axel Johnson, Inc. v. Carroll Carolina Oil Co., Inc., 145 F.3d 660, 663
(4th Cir. 1998), while the citizenship of a limited liability company is determined by the
citizenship of all of its members, Cent. W. Va. Energy Co., Inc., 636 F.3d at 103.
Here, Plaintiff brings this action pursuant to 28 U.S.C. § 1332, claiming there is complete
diversity between Plaintiff and Defendants, and the amount in controversy exceeds $75,000.
(Compl. at ¶ 9.) Plaintiff defines the citizenship of each of the parties as follows:


BWM LLC: “[A]n unincorporated entity organized under the laws of the
Commonwealth of Virginia.” (Id. at ¶ 11.)



Schur: A resident of Colorado. (Id. at ¶ 12.)10



Sprenkle: A resident of the Commonwealth of Virginia. (Id. at ¶ 13.)

Vorlop notes that he contests Schur’s citizenship as a complaint filed in the Circuit Court of the City of
Richmond lists Schur’s address in Alexandria, Virginia, and he alleges he is a resident of Fairfax County,
Virginia. However, because Schur’s citizenship status is irrelevant to deciding the instant Motion, Vorlop
accepts Schur’s citizenship allegations. (See Mem. in Supp. of Mot. at 2.)

10

4



Colin Healy: A resident of the Commonwealth of Virginia. (Id. at ¶ 14.)



Kevin Healy: A resident of the Commonwealth of Virginia. (Id. at ¶ 15.)



Ouyang: A resident of California. (Id. at 16.)



Nguyen: A resident of the Commonwealth of Virginia. (Id. at ¶ 17.)



Barredo: A resident of Washington, D.C. (Id. at ¶ 18.)



Chae: A resident of California. (Id. at ¶ 19.)



Vorlop: A resident of the Commonwealth of Virginia. (Id. at ¶ 20.)

Plaintiff alleges that Schur is the sole member of BWM LLC. (Id. at ¶ 12.) If this
allegation is true, then complete diversity exists as BWM LLC will be deemed a citizen of
Colorado. See Cent. W. Va. Energy Co., Inc., 636 F.3d at 103. However, Vorlop argues that
Schur is not the only member of BWM LLC. Instead Vorlop contends that both Schur and
Sprenkle were and are members. If the evidence supports Vorlop’s allegations, and Sprenkle is a
member of BWM LLC, then BMW LLC will be considered a citizen of both Colorado and
Virginia, destroying complete diversity among the parties. Thus, the Court must determine if
Sprenkle is a member of BWM LLC.
(i)

Plain Language of the Operating Agreement

In making this determination, the Court will begin with the plain language of the
Operating Agreement. See Am. Spirit Ins. Co. v. Owens, 541 S.E.2d 553, 555 (Va. 2001) (citation
omitted) (“[W]here the terms of the contract are clear and unambiguous, we will construe those
terms according to their plain meaning.”). Specifically, the Court should first determine whether
the plain language conditions membership in BWM LLC upon making the contributions listed in
Exhibit A to the Operating Agreement. Plaintiff argues that the plain language of the Operating
Agreement (as well as Virginia precedent) command the conclusion that Sprenkle was required
to make a “mandatory initial contribution” in order to become a member of BWM LLC. (See
Opp’n Mem. at 5.) Because Sprenkle allegedly failed to make his contribution, he never acquired

5

an ownership interest in BWM LLC. (See Compl. at ¶ 87) (citing Va. Code § 13.1-1038.111).
Vorlop, on the other hand, argues that there is no language in the Operating Agreement that
makes the promised contributions a “condition to membership.” (Mem. in Supp. of Mot. at 5.)
The Court will address each of the relevant provisions of the Operating Agreement that are
raised by the parties in their pleadings.
(1) Paragraph 2.1 of the Operating Agreement
Paragraph 2.1 of the Operating Agreement notes, “The initial capital and interest in
artists to be contributed by the Managing Members is evidenced by EXHIBIT ‘A’ and shall not
exceed that amount.” (Operating Agreement at ¶ 2.1.) Exhibit A lists Sprenkle and Schur as
Managing Members. (Id. at Ex. A.) Sprenkle’s contribution is listed as follows: Jesse Harper,
Colin Healy and the Jet Skis, 50.00% Management of Old School Freight Train. (Id.) Sprenkle’s
“percentage of membership interest” is listed as 50.00%. (Id.)
Plaintiff interprets paragraph 2.1 and Exhibit A of the Operating Agreement as meaning
that “the initial capital to be contributed by Sprenkle in exchange for his 50% interest were the
Artist Contracts he claimed to have prior to the execution of the Operating Agreement.” (Opp’n
Mem. at 6) (second emphasis added). “Thus, [Plaintiff argues,] the language of the Operating
Agreement expresses a mandatory requirement . . . that Sprenkle make an initial capital
contribution to obtain his stated 50% interest as a managing member.” (Id.) (emphasis added).
Plaintiff highlights the auxiliary verb “to be,” and argues that such verb establishes a mandatory
obligation upon Sprenkle. (Id. at 6–7.) However, the Court disagrees with Plaintiff’s
interpretation.
Contrary to Plaintiff’s argument, paragraph 2.1 does not “establish[] a mandatory
obligation that Sprenkle assign the Artist Contracts listed in Exhibit A as consideration for his
defined membership interest.” (Opp’n Mem. at 6–7) (emphasis added). In other words, while
Va. Code § 13.1-1038.1(A)(1) states: “[A] person may become a member in a limited liability company
. . . in the case of a person acquiring a membership interest directly from the limited liability company,
upon compliance with an operating agreement . . . .” (emphasis added).

11

6

the Operating Agreement may be read as requiring each Managing Member to make the
contributions listed in Exhibit A, the Operating Agreement does not condition the Managing
Members’ membership interest on such contributions.
If the parties wished to condition membership in BWM LLC upon the defined
contributions, the parties should have so stated in the Operating Agreement. See Chaudhary v.
Broad, 60 Va. Cir. 128, 2002 WL 1831990, at *2 (Va. Cir. Ct. July 25, 2002) (“The clear language
of the Operating Agreements require[d] as a condition of membership the payment of the
$50,000 . . . contribution.”)12; see also 1 RIBSTEIN AND KEATINGE ON LTD. LIAB. COS. § 5.7 (June
2015) (“One who fails to make an agreed contribution nevertheless is a member unless the
agreement provides otherwise.”). For example, in McDonald v. Miller, No. 00AP-994, 2001 WL
300736 (Ohio Ct. App. Mar. 29, 2001), the operating agreement for a limited liability company
provided that “[e]ach Member shall contribute $5,000 as the initial Capital Contribution.” Id. at
*1. Appellee claimed that the $5,000 capital contribution was a mandatory condition precedent
to membership. Id. at *2. Appellant admitted that he did not make the $5,000 capital
contribution. Id. Thus, the Court faced “[t]he narrow issue . . . [of] whether appellant was a
member of [the limited liability company].” Id. at *4. The Court first noted that appellant was
listed as a member of the limited liability company. Id. (“Article III, Section I states that ‘[t]he
names and addresses of the Members are as follows . . . .’”). The Court then stated:
The phrase ‘each Member shall contribute $5,000’ presupposes that the person
contributing the $5,000 is already a member. If the intent of this provision was
Plaintiff asserts that “[t]he reasoning of Chaudhary fits this case to a T” in part because “[t]he
Operating Agreement [like the one in Chaudhary] contains a mandatory term requiring an initial
contribution of Sprenkle’s ‘interest in artists.’” (Opp’n Mem. at 10.) However, the operating agreement in
Chaudhary explicitly conditioned membership upon payment of a capital contribution. See 2002 WL
1831990, at *1–2 (“Each member hereby acknowledges that he has irrevocably subscribed for the issuance
and sale of a Membership Interest . . . upon the terms and conditions and in consideration of the capital
contributions specified in this Agreement.”). No such explicit condition exists here.
In addition, Plaintiff cites Flores v. Murray, 2007 WL 3034512 (N.J. Super. Ct. App. Div. Oct. 19,
2007) in support of its argument that because Sprenkle failed to make the required contribution, he never
became a member of BWM LLC. (See Opp’n Mem. at 10.) However, the operating agreement in Flores
“personally obligate[d] defendant to ‘contribute the $200,000 investment within a six month period
ending in March of 2004 or forfeit his shares and ownership in [the limited liability company].’” Id. at
*10. No similar provision exists in the Operating Agreement presently at issue.
12

7

to make membership conditional upon the payment of $5,000, it is not apparent
from the plain language of the document. Additionally, there is no time
requirement designated in the agreement when a member is required to make the
capital contribution.
Id. The Court concluded that the plain language of the operating agreement established that
appellant was a member of the limited liability company at some point in time. Id.
Similar to the operating agreement in McDonald, the Operating Agreement in the
present case first lists Sprenkle and Schur as Managing Members of BWM LLC. (See Operating
Agreement at ¶ 1.1.) (“The Managing Members, as listed on EXIHIBIT ‘A’ attached hereto,
hereby form a limited liability company named Black Water Management LLC . . . under and
pursuant to the laws of the Commonwealth of Virginia.”). The Operating Agreement then
requires the Managing Members to provide the initial capital and interest in artists as defined in
Exhibit A. (Id. at ¶ 2.1.) The Operating Agreement thus “presupposes” that the person making
the initial contributions is already a member. Moreover, like McDonald, the Operating
Agreement here does not designate when a member is required to make these contributions.
Thus, paragraph 2.1 does not sustain Vorlop’s argument in support of his Motion to Dismiss. To
the contrary, this section of the Operating Agreement supports the conclusion that Sprenkle
was, at least at some point, a member of BWM LLC.
(2) Paragraph 2.4 of the Operating Agreement
Next, Vorlop highlights paragraph 2.4 of the Operating Agreement. To understand this
paragraph of the Operating Agreement, the Court must note the full context in which it lies.
Article II of the Operating Agreement notes, in part:
Contributions and Distributions
2.1
The initial capital and interest in artists to be contributed by the
Managing Members is evidenced by EXHIBIT ‘A’ and shall not exceed that
amount . . . .
2.2
Additional capital contributions may be required as determined by
the Managing Members from time to time.

8

2.3
A promise by a Member13 to make a contribution to the Company
must be set out in writing and signed by the Member.
2.4
A Member or a Member’s representative or successor is obligated
to make the contributions outlined above notwithstanding the Member’s death,
disability, or other changes in circumstances.
2.5
The membership interests in the Company shall be as listed on
EXHIBIT ‘A’ attached hereto.
Based on the language set forth in paragraph 2.4, Vorlop argues that “[i]f the alleged
failure of Sprenkle to make the contribution were [sic] ipso facto fatal to his membership status,
he could have no successor and there would be no reason to impose contribution liability on the
successor to his membership interest.” (Mem. in Supp of Mot. at 5.) In response, Plaintiff
contends that Vorlop’s “assertion lacks all merit because paragraph 2.4 does not speak to the
initial contributions of the Managing Members,” but rather “relates to ‘[a]dditional capital
contributions’ that ‘may be required [of all Members] by the Managing Members from time to
time.’” (Opp’n Mem. at 8) (citing Operating Agreement at ¶ 2.2).
Based on the Court’s reading, paragraph 2.4 is hopelessly vague. It simply refers to “the
contributions outlined above,” which could implicate either the initial contributions in
paragraph 2.1 or the additional capital contributions in paragraph 2.2. Thus, paragraph 2.4 fails
to provide the best support for either party’s argument.
(3) Paragraph 12.9 of the Operating Agreement
In its opposition, Plaintiff highlights paragraph 12.9 of the Operating Agreement, which
states: “A capital contribution by a Member in proportion to his membership interest will ensure
that the Member retains his proportion of ownership in the Company. In the event a Member
cannot or chooses not to contribute capital in proportion to his membership interest, his
proportional membership interest shall be reduced to reflect the amount of capital he actually
contributed.” (Operating Agreement at ¶ 12.9.) Plaintiff argues that the plain language of that
Paragraph 5.1 of the Operating Agreement notes that there shall be two classes of Members in BWM
LLC: (1) Managing Members, and (2) Non-Managing Members. The term “Members” as used throughout
the Operating Agreement “shall include both Non-Managing Members and Managing Members.”
(Operating Agreement at ¶ 5.1)

13

9

paragraph makes “a Member’s interest . . . contingent upon and in direct proportion to the
capital contributed by the LLC’s Members.” (Opp’n Mem. at 9.) While the Court agrees that a
member’s interest will be in direct proportion to his contribution, the Court does not believe that
the plain language of the Operating Agreement conditions membership upon the noted
contributions. Rather, again, this paragraph appears to presuppose that such person is already a
member of BWM LLC.
This conclusion is bolstered by Virginia law. Virginia Code § 13.1-1023.1 mirrors the
intent of paragraph 12.9 of the Operating Agreement. The Code provides that “[a] member or
manager who fails to perform in accordance with, or to comply with terms and conditions of, the
operating agreement shall be subject to specified penalties or specified consequences . . . set
forth in subsection D of § 13.1-1027.” Va. Code § 13.1-1023.1(A)(1). Virginia Code § 13.1-1027(D)
states in turn that “an operating agreement may provide in writing that the interest of any
member who fails to make any contribution that he is obligated to make shall be subject to
specific penalties for, or specified consequences of, such failure,” including “reducing or
eliminating the defaulting member’s proportionate interest in a limited liability company.” Va.
Code § 13.1-1027(D) (emphasis added). Thus, paragraph 12.9 of the operating agreement sets
forth a potential remedy for breach of an operating agreement–not a condition precedent to
obtaining membership.
Based on the foregoing three provisions, the plain language of the Operating Agreement
establishes that both Schur and Sprenkle were, at some point, members of BWM LLC. See
McDonald, 2001 WL 300736, at *4. However, that being said, Plaintiff alleges that Sprenkle
contributed absolutely no capital to the Company. (See Compl. at ¶ 37; Opp’n Mem. at 9.)
Assuming arguendo that Plaintiff’s allegation is true, then Sprenkle’s proportional membership
interest could be reduced to zero percent to reflect the amount of capital he actually contributed.
(See Operating Agreement at ¶ 12.9; Opp’n Mem. at 9.) Vorlop, as a “non-member” of BWM
LLC, recognizes that he “lacks the knowledge of whether either Mr. Sprenkle or Mr. Schur
10

performed their capital obligations to the Company.” (Reply Mem. at 7–8.) Thus, the Court lacks
sufficient evidence to know whether Sprenkle ever contributed as required by the Operating
Agreement. The Court, therefore, is left guessing at whether Sprenkle was a member of BWM
LLC at the time the Complaint was filed. See Rowland v. Patterson, 852 F.2d 108, 112 (4th Cir.
1988) (citing cases) (“[D]iversity of citizenship is determined with reference to the date on
which a complaint is filed in federal court.”). Because material jurisdictional facts are unknown
at this point in time, the Court must deny Vorlop’s Motion. See Richmond, Fredericksburg &
Potomac R.R. Co., 945 F.2d at 768.
(ii)

Extrinsic Evidence

Besides the plain language of the Operating Agreement, Vorlop also presents extrinsic
evidence in support of his argument. (Mem. in Supp. of Mot. at 5–9.) But Plaintiff argues that all
Vorlop’s “proof” is irrelevant. (Opp’n Mem. at 11.)
(1) Registered Agent
First, Vorlop notes that the Operating Agreement makes Sprenkle a registered agent of
the Company. And “even as of [the date of the Motion’s] filing, Mr. Sprenkle remains registered
agent of record for the company.” (Mem. in Supp. of Mot. at 7, Ex. H.) Vorlop argues that under
Virginia law, Sprenkle could not have held that capacity if he were not a member of BWM LLC.
(Id. at 5.) But Plaintiff contends that “[a] representation in a document that one is a registered
agent does not grant one the necessary qualifications to hold validly the position of registered
agent.” (Opp’n Mem. at 12.)
Virginia Code § 13.1-1015 requires that each limited liability company continuously
maintain a registered agent, who is either “a member or manager of the limited liability
company.” Va. Code § 13.1-1015(A)(2)(a) (emphasis added). The Code defines a manager as “a
person . . . designated by the members of a limited liability company to manage the limited
liability company as provided in the . . . operating agreement.” Va. Code § 13.1-1002. The Code
then separately defines a “member” as “a person that has been admitted to membership in a
11

limited liability company as provided in § 13.1-1038.1 and that has not ceased to be a member.”
Id. Thus, as Plaintiff argues, Sprenkle could validly qualify to serve as a registered agent if he
established himself as a “manager” of the Company, without necessarily being a member of the
Company. (See Opp’n Mem. at 12 n.3.) Therefore, the fact that Sprenkle is noted as BWM LLC’s
registered agent is of no consequence in the present Motion.
(2) Organizer
Next, Vorlop highlights that Sprenkle is listed as the organizer of the Company per the
records of the Virginia State Corporation Commission. (Mem. in Supp. of Mot. at 6, Ex. E.) The
Virginia Code provides that “[o]ne or more persons may act as organizers of a limited liability
company by signing and filing articles of organization with the Commission. Such person or
persons need not be members of the limited liability company after formation has occurred.”
Va. Code § 13.1-1010 (emphasis added). Thus, Sprenkle’s status as an organizer clearly fails to
resolve the present issue.
(3) Additional Documents
Vorlop further attaches a limited liability company resolution for First Market Bank,
which was jointly executed by Sprenkle and Schur. (Mem. in Supp. of Mot. at 6, Ex. F.) He also
attaches the 2008 Blackwater Management U.S. Return of Partnership Income, Form 1065,
which notes that Sprenkle and Schur each own 50% of BWM LLC. (See id. at 6, Ex. G at p.2.)
But, again, this extrinsic evidence does not answer the question of whether Sprenkle was a
member of the Company at the time the Complaint was filed. See Rowland, 852 F.2d at 112.
(4) State Court Litigation
Finally, the parties ardently contest the relevance of prior state court litigation. As
background, Schur, proceeding pro se, filed suit in Richmond Circuit Court against Sprenkle,
TBT, and others to discover the truth and recover damages allegedly caused by the conspirator’s
acts and omissions. (See Compl. at ¶ 4; Opp’n Mem. at 3.) Sprenkle later countersued Schur in
Henrico Circuit Court. (Opp’n Mem. at 3.)
12

In his present Motion, Vorlop highlights the fact that Schur previously claimed he was
never a member of BWM LLC. (See Mem. in Supp. of Mot. at Ex. D, at ¶ 11.)14 But, as Plaintiff
notes, “the positions Schur took in earlier litigation regarding his membership interest in BWM
[LLC] have no bearing in this action brought by BWM [LLC] because Vorlop admits that Schur
is a member of BWM [LLC].” (Opp’n Mem. at 14) (citing Mem. in Supp. of Mot. at 9). The Court
finds Vorlop’s argument regarding the prior state court litigation entirely irrelevant in deciding
whether Sprenkle is a member of the Company.
IV.

CONCLUSION
For the foregoing reasons, Vorlop’s Motion is DENIED.
Let the Clerk send a copy of this Memorandum Opinion to all counsel of record.
An appropriate Order will issue.

________________/s/_____________
James R. Spencer
Senior U. S. District Judge

ENTERED this 27th___ day of August 2015.

The Richmond Circuit Court, however, concluded that “[t]here is no question that [Schur] and
[Sprenkle] were legally associated; the Operating Agreement signed by both parties show[s] their legal
association.” (Opp’n Mem. at Ex. 7.)

14

13