[No. 58825-7-I. Division One. June 18, 2007.]
[1] Appeal — Discretionary Review — Scope — Determination by Appellate Court. In a case before an appellate court on a motion for discretionary review, the appellate court determines the scope of review. [2] Partnership — Limited Liability Company — Action Against — Dissolution of Company — Survival of Action — Statutory Provisions — Retroactivity — Member Dissolved Company. Laws of 2006, ch. 325, § 1, which amended RCW 25.15.303 to allow for the survival of claims against a limited liability company up to three years after the company is dissolved, may be applied retroactively to permit an action to proceed against a limited liability company that its members have dissolved and for which a certificate of cancellation has been issued before May 6, 2006, the effective date of the amendment. [3] Partnership — Limited Liability Company — Action Against — Dissolution of Company — Personal Liability of Members and Managers. RCW 25.15.300(2) protects members and managers of a dissolved limited liability company from liability for claims against the company only if they have carried out a proper dissolution in winding up the company's affairs. While cancellation of a limited liability company's certificate of formation marks the end of the company as a separate legal entity, it does not necessarily follow that claims against the company managers or members also abate; a member or manager winding up the company affairs upon dissolution who has not complied with RCW 25.15.300 may be personally liable to claimants. [4] Appeal — Discretionary Review — Scope — Issues Retained by Trial Court. In a case before an appellate court on a motion for discretionary review, the court will not consider issues that were retained by the trial court. Nature of Action: A homeowners association sought damages from a limited liability company and individual company members and managers. The action was filed several months after the company was dissolved and cancelled by its members. Superior Court: The Superior Court for King County, No. 05-2-23589-6, Theresa Doyle, J., on August 17, 2006, entered a summary judgment dismissing the claims against the individual members of the limited liability company and ruled that the action against the limited liability company could proceed even though it was dissolved. Court of Appeals: Holding that a statutory amendment applied retroactively to permit the action to proceed against the dissolved limited liability company and that the members and managers may be personally liable for company liabilities if they did not properly wind up the company's affairs as required by statute, the court affirms the ruling allowing the action to proceed against the dissolved limited liability company, reverses the summary judgment, and remands the case for further proceedings. Eileen I. McKillop- (of Oles Morrison Rinker & Baker, LLP), for petitioner. Leonard D. Flanagan- and Justin D. Sudweeks- (of Levin & Stein), for respondents. Bryan P. Harnetiaux- on behalf of Washington State Trial Lawyers Association Foundation, amicus curiae. Paul H. Beattie, Jr.-, and Robert D. Welden- on behalf of Washington State Bar Association, amicus curiae. ¶1 GROSSE, J. — A 2006 amendment to the statutory framework of the Washington Limited Liability Company Act (LLCA) ¶2 While the statute provides that no LLC member or manager will be personally liable solely by reason of being a member or manager, the use of the word solely indicates that a member or manager may be personally liable for LLC liabilities where such member's acts cause damages. FACTS ¶3 This case was certified for discretionary review by the trial court because it involved a controlling question of law: whether the 2006 amendment providing for a three-year survival period within which to commence actions against a member dissolved LLC is retroactive and applicable to a member dissolved LLC that has thereafter cancelled itself. This court has answered that question affirmatively in a case linked to this one, Chadwick Farms Owners Ass'n v. FHC, LLC. ¶5 Colonial Development, LLC (Colonial), dissolved itself in December 2004 and two weeks later filed a certificate of cancellation. While there are factual disputes about who knew what when, it is undisputed that Emily Lane filed suit on July 19, 2005, seven months after Colonial filed a cancellation certificate and eight months after Colonial dissolved itself. ¶6 Emily Lane cross-appeals the trial court's summary judgment dismissal of its claims against individual members of the LLC. ANALYSIS Summary Judgment Dismissal of Claims ¶8 The trial court granted Colonial summary judgment dismissing claims against individual members and managers of the LLC. Although the trial court did not state the basis for its dismissal of Emily Lane's claims against the individual members, Colonial advanced the argument that the members were immune from liability as individuals. ¶10 The possibility of piercing the veil of an LLC (thus permitting personal liability of its members) was envisioned at the time the statute was enacted. Perceiving such an eventuality, the Washington State Trial Lawyers Association was instrumental in requiring that the LLCA provide a statutory vehicle for piercing the LLC veil. Because case law did not create such a vehicle, a section was added to the legislation that permitted courts to consider factors and policies set forth in established case law with regard to piercing the corporate veil in the context of an LLC. ¶11 Emily Lane alleges a litany of questionable activities upon the part of the members of Colonial, including whether or not members of Colonial appointed to the Emily Lane Homeowners Association Board failed to act in a timely manner to address the numerous warranty claims Emily Lane now asserts. In June 2005, Colonial's bookkeeper notified the insurance carrier of a possible claim against the LLC: The Notice of Claim to the insurance company may be a moot point. The LLC was dissolved effective 1/21/05 and therefore there is nothing to sue! We did not receive the Notice of Claim prior to the dissolution so we should be clear according to our attorney. Rejoice! Pat Emily Lane argues that Colonial's aggressive pursuit of litigation after it was cancelled precludes Colonial from cloaking itself in the limited liability cloak afforded to it by the LLCA. Emily Lane provided this court with examples of letters, discovery, and affirmative defenses that Colonial pursued even while it was rejoicing over being clear of liability. ¶12 The record before us is complex. To the extent that the trial court denied Emily Lane's claims on the grounds that the individual members were necessarily immune from liability, the dismissal was in error. ¶14 We hold the 2006 amendment to the LLCA is retroactive and permits the claims against Colonial to go forward. We remand for action consistent with this opinion and the holdings found in the linked cases of Chadwick and Roosevelt. BAKER and ELLINGTON, JJ., concur.