Adelsperger v. Elkside Development LLC
Annotate this CaseElkside Development, LLC (Elkside) owned and operated the Osprey Point RV Resort in Lakeside, Oregon. Part of Elkside’s business model involved selling membership contracts that conferred free use of the campground, among other benefits. In April 2017, Barnett Resorts LLC, an Oregon limited liability company operated by member-managers Stefani and Chris Barnett, purchased Elkside. Shortly after the purchase, the Barnetts sent a letter to all campground members, identifying them as “owners” of the resort, and indicating that they would not honor Elkside’s membership contracts. Plaintiffs, a group of 71 people who, collectively, were party to 39 membership contracts with Elkside, brought suit alleging a variety of claims against Stefani and Chris Barnett individually, and against the company, Barnett Resorts LLC. On appeal, this case raised three issues relating to: (1) a breach of contract claim; (2) an intentional interference with contract claim; and (3) a statutory claim of elder abuse, based on the fact that the majority of the membership contracts had been held by plaintiffs over the age of 65. As to the claims against the Barnetts individually, the trial court granted summary judgment for defendants, relying on ORS 63.165 and Cortez v. Nacco Materials Handling Group, 337 P3d 111 (2014). Plaintiffs argued, in part, that whether ORS 63.165 shielded the Barnetts from liability required considering whether their actions were entirely in support of the LLC, or whether they were, instead, in furtherance of a non-LLC individual motive. The Court of Appeals affirmed without opinion. The Oregon Supreme Court allowed review and reversed in part the Court of Appeals and the trial court. Specifically, the Supreme Court reversed as to the elder abuse claim, affirmed as to the breach of contract claim, and affirmed the intentional interference claim by an equally divided court.
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